Comparing the Operational Integration of a Core Information System in Insourcing and Outsourcing Firms

IT business alignment is widely acknowledged as an important driver for effectively applying information systems in a business context and for increasing the performance of the supported business process. But how does this structural integration of enterprise systems and business processes change when firms outsource the provision of their IT? We empirically compare how the value impact of structural IT business alignment on core financial processes in banks with an internal IT is different from banks that have their enterprise systems outsourced. It turns out that outsourcing substantially changes the ways operational alignment influences business process performance

The Outsourcing-to-Insourcing Relocation Shift: A Response of U.S. Manufacturers to the Outsourcing Paradigm

Outsourcing has been utilized as a corporate strategy by U.S. manufacturers for over three decades to minimize manufacturing and production costs, focus on core competencies and achieve sustained competitive advantages in the global market. In recent years, manufacturers have begun evaluating nearshoring, reshoring and insourcing strategies as near-term responses to trigger events such as increased labor costs and decreased product quality. The United States Air Force also established outsourcing as its primary strategy for achieving cost-saving objectives associated with the design, engineering, manufacturing, production and sustainment of its fourth, fifth and sixth generation weapon systems. In order to decrease weapon system costs and consistently achieve congressionally mandated core and 50/50 requirements, the United States Air Force is evaluating opportunities to bring outsourced workload into the depot infrastructure. This research applies grounded theory and case study methodologies to examine the antecedents and barriers of the U.S. manufacturing outsourcing-to-insourcing relocation shift. A structured framework is presented to assist the United States Air Force as a guide for evaluating insourcing opportunities. The framework addresses contract duration, access to critical information, and the factors influencing the insourcing decision

OFFSHORING AND OUTSOURCING UNDER DEMAND UNCERTAINTY - A SUPPLY CHAIN MANAGEMENT ANALYSIS

siirretty Doriast

Strategic Alignment In Mergers And Acquisitions: Theorizing IS Integration Decision making.

This paper focuses on IS integration decisions made during mergers and acquisitions from a strategic-alignment lens. The objectives of this study are to: (1) examine business-IS alignment as reflected in IS integration decisions in a merger context and (2) identify factors that shape IS integration decisions in a merger context. We study these issues in three oil and gas mergers from pre-merger announcement to three to four years after merger announcement. Our contributions are three-fold. We show that firms are somewhat misaligned in the early post-merger period, and come into alignment only two to three years after the merger. We find that business-IS alignment was a minor concern for the new organizations in pre-merger and early post-merger phases. Other factors such as acquirer-target power struggles, prior merger experience, and overarching synergy goals drove much of the initial integration decision making. Only late in the post-merger do the merged organizations revisit their systems to bring them into alignment with the business needs

The Trade-Off Between Make or Buy Strategy and Their Relationship With Firm Performance

Purpose: The question of whether to make or acquire something is a crucial conundrum that many companies must solve. A crucial step in the operation of a business is determining whether it is more cost effective to develop and manufacture components or services in-house or to purchase them from outside vendors. In order to provide managers in the General Company for Electrical and Electronic industries (GCEEI) in Iraq with assistance in evaluating sourcing choices, the purpose of this study is to address this subject by bringing the conventional make-or-buy literature up to date by adding fresh academic insights.   Theoretical framework: the most prominent ideas and methods for deciding whether to produce something oneself or purchase it are explored, along with a literature analysis of relevant material. The phrases "make-or-buy" and "insourcing" and "outsourcing" were used to search for relevant articles in scholarly databases.   Design/methodology/approach: We analyzed the data for the year (2022) that is collected through visits and meetings with the Managers, in the (GCEEI) by using two approaches: a. economic analysis and b. break-even analysis to help managers evaluate sourcing decisions.   Findings: According break-even analysis for this case, the quantity should be manufactured is more than 4000 Unit so that the manufacturing costs are more than the purchase costs, then the company should go for buy if less than 4000 Unit. According to the results of the economic analysis, the manufacturing decision is the best in the three models because manufacturing costs are lower than purchasing cost.   Research, Practical & Social implications: The findings recommend forming interdisciplinary teams consisting of professionals from many fields (buyers, R&D staff, quality representatives, etc.) to prevent making make-or-buy judgments under circumstances of faulty and inadequate data.   Originality/value: Both professional and unskilled workers contribute to the company's success, and when decision-making and procurement become routine, a company's long-tenured employees may ease the burden of these recurring tasks.

Sourcing motives behind sourcing decisions exposed through the Sourcing Decision Framework

There is no doubt that information systems (IS) are the backbone of today’s organizations. Having an initial inspection on sourcing motives in the financial sector it can be stated that resources used in development of information systems (IS) are seen as an important factor for sustained competitive advantage. However, it can be claimed that it depends to a high extent on the application of different sourcing modes. This leads us to a closer inspection on sourcing motives through selected case studies and the following research question: How can motives for sourcing options of IS-development be explained? The empirical investigation on sourcing decisions and the motives behind, in addition to a literature review on sourcing decisions and sourcing options ends in four propositions. These propositions are then used in tandem with the findings from the empirical data for initial development of the Sourcing Decision Framework (SDF). Ultimately, what is at stake here is our framework (SDF) that from the initial development and the first test has shown to be purposive and could be further developed to a useful framework for analyzing sourcing decisions and as a guiding tool for decision-makers when deciding on sourcing options for IS-development

Integrated decision support model for global sourcing

Thesis (M.B.A.)--Massachusetts Institute of Technology, Sloan School of Management; and, (S.M.)--Massachusetts Institute of Technology, Dept. of Mechanical Engineering; in conjunction with the Leaders for Manufacturing Program at MIT, 2008.Includes bibliographical references (p. 103-109).Over the last decade, the U.S. aircraft industry has experienced increasing levels of international integration as companies seek to access global talent and resources, cut production costs, spread financial risk, and secure access to airplane markets throughout the world. In an increasingly complex environment, decision makers seek an effective framework to evaluate the true benefits, costs and risks of sourcing alternatives-both relating to the short-term effects of selecting particular suppliers or groups of suppliers, as well as the long-term effects of redrawing their firm boundary and developing a more vertically disintegrated supply chain. This thesis is an examination of strategic sourcing decision practices at Boeing Commercial Airplanes, based on a six-month internship study with the Future Airplane Production group in Seattle, Washington. In this thesis we will discuss the application of strategic analysis, lean operational analysis, managerial accounting, and Failure Mode and Effects Analysis (FMEA) to improve existing sourcing analysis practices. An integrated decision support model is introduced to represent key sourcing decision factors, their relative importance, and the expected benefits, costs and risks to stakeholders related to each factor (comparing two sourcing alternatives). Using a weighted average, the model expressly indicates the relative value of each alternative. The model is applied to two case studies involving local insourcing and offshore outsourcing, respectively. This study demonstrates the need for incorporating explicit valuation of 'softer' strategic, operational and risk components along with the 'hard' financial analysis when making sourcing decisions.by Victor A. Mroczkowski.S.M.M.B.A

Reshoring paths: italian cases from the apparel industry

ope

The performance impact of core component outsourcing: insights from the LCD TV industry

Firms in technology markets often outsource the manufacture of core components—components that are central to product performance and comprise a substantial portion of product costs. Despite the strategic importance of core-component outsourcing, there is little empirical evidence (and many conflicting opinions) about its impact on consumer demand. The authors address this gap with an examination of panel data from the flat panel TV industry, across key regions globally. Results from their estimation indicate that core-component outsourcing reduces the firm’s ability to be on the technological frontier; this hurts demand, because the authors’ estimates suggest that consumers care about firms being on the frontier. However, such outsourcing also reduces costs. Finally, the authors find that outsourcing increases the intensity of competition in the marketplace. They assess these (often opposing) effects and conduct thought experiments to quantify the performance impact of core-component outsourcing

Global Operations and Supply Chain Configurations: Reshoring Dynamics in Europe

In recent years, the growing tensions in trade and investment between major developed countries (e.g., US) and leading developing countries (e.g., China), the thinning of location advantages in some low-cost countries, and the growing awareness of the \u201ctotal cost\u201d of offshoring have driven many companies to re-think the location of their international value chains. Previously offshored operations have been relocated to countries closer to the companies\u2019 headquarters or even to the domestic context. This phenomenon is referred to as \u201creshoring\u201d. Extant literature on reshoring has provided rich insights into why companies reshore by identifying an array of motivations. It has also enlightened us that reshoring is complex and dynamic. Despite the fact that the dialogue has shifted gradually from why aspect towards a wider scope involving how companies reshore and what the outcomes are, the nuanced understanding of reshoring dynamics is still lacking. Prior studies fall far short in addressing questions concerning reshoring trends and features, the determinants of key strategic decisions, country effects, and reshoring impact. The purpose of this thesis is to probe the dynamics of reshoring with a particular focus on reshoring or repatriation of manufacturing production in Europe. More in detail, we have set five objectives: (1) provide a systematic understanding of the reshoring literature, (2) analyse the dynamics and evolution of reshoring in Europe, (3) investigate the determinants of reshoring entry modes, (4) compare reshoring practices and analyse how the home country matters, and (5) articulate frontier issues and propose future research directions. This thesis is based on the large-scale data of reshoring projects recorded in the European Reshoring Monitor (ERM) database whose goal is to identify, analyse and summarise evidence on the reshoring of manufacturing and other value-chain activities to the EU. ERM project, as part of a multi-annual research (2015-18) project on the \u201cFuture of Manufacturing in Europe\u201d, is based on a collaboration between Eurofound and a consortium of Italian universities with an active interest in tracking reshoring activities. The lead university in the consortium is the University of Udine. The writer of this thesis has been deeply involved in this project since its inception and has undertaken database creation and management tasks. In general, the key empirical findings reflect the dynamism and evolutionary trajectories of reshoring practices and the complexity of reshoring countries that themselves differ in terms of institutional environment, industrial conditions, and culture. These empirical findings, together with future research directions proposed, have many theoretical and practical implications