The 24-Hour Knowledge Factory Paradigm: The Evolving Model for Offshoring based on Strategic, Economic, Legal, Health, Technical, and Other Considerations

The 24-Hour Knowledge Factory paradigm involves 3 (or more) collaborating centers, each located in a different continent. Individuals at each center work from 9 am to 5 pm in that country, and then pass the work-in-progress to the next collaborating center to enable round-theclock performance in a manner somewhat akin to the deployment of three shifts in the manufacturing sector. The 24-Hour Knowledge Factory is relevant for structured and semi-structured applications in many knowledge-based industries including accounting, legal, design, and development. There is a growing array of examples from healthcare and other domains where off-site professionals have been able to provide better results than on-site professionals, thereby validating that many tasks can be more effectively performed using the 24-Hour Knowledge Factory approach. The gradual adoption of this paradigm is motivated by several considerations. In 2007, the World Health Organization concluded that working at night is a probable cause of breast cancer in women and prostate cancer in men. Attempts by US state governments and even the federal government to discourage outsourcing are unlikely to succeed for multiple reasons, and the notion of “hybrid outsourcing” will gain momentum over time. Plus there are the advantages of developing products and services in a shorter timeframe; furthermore, these products and services can command broader appeal in the global marketplace. A detailed study was conducted at IBM to compare the performance of a co-located team and a distributed team, and the performance of the latter team exceeded initial expectations. The key results from this study will be discussed in this session

Public and Private Sector Legal Process Outsourcing: Moving Toward a Global Model of Legal Expertise Deliverance

Legal process outsourcing (“LPO”) involves the use of foreign lawyers to conduct, perform and apply domestic law, most often for cost-saving purposes. Large, global firms have already begun to embrace the concept of LPO, and small firms and sole practitioners are increasingly reaching out to foreign firms, seeking more efficient, lower-cost providers. Ethical considerations, liability limiting agreements, ERISA compliance, certification and oversight models are all part of the LPO landscape. This paper discusses these aspects, as well as issues related to outsourcing in non-traditional areas such as the public sector and the judiciary

Global Strategies in the Legal Services Market: Institutional Impacts on Value Chain Dynamics

What alternative strategies are being pursued by firms to capture profit in global value chains? In what ways are the sources of competitive advantage changing as they move up the value chain from low end to high end work, potentially changing the structure and boundary of the existing industry? This paper examines these questions by focusing on the outsourcing and offshoring of legal services, known as Legal Process Outsourcing (LPO). Legal services were chosen for study in order to highlight the relevance of both technological and institutional factors that influence value chain dynamics. In particular, the study examines how the nature of professions impact on make-or-buy decisions and industry structure. The legal services value chain is conceptualized as consisting of three blocks, namely knowledge and information management (KIM), consultative advice and representation (CAR), and client relationship management (CRM). The study shows that legal services are being unbundled, with the KIM component being separated by ownership and geography from CAR and CRM components. To assess the actual extent of disintegration, the study identifies the conditions under which demand and supply for LPO services is generated. Those conditions on the demand side include the corporatization of law firms and pressures on global corporations to cut legal costs. From the supply perspective, the study identified three distinctive strategies for LPO providers to capture profit, depending on their mode of entry influencing their initial capability mix, and whether or not the value chain is driven by a corporation or a law firm

Professional and trade associations in a nascent and formative sector of a developing economy: A case study of the NASSCOM effect on the Indian offshoring industry

As important sources that shape institutional structures in an economy, professional and trade associations play significant roles in bringing and legitimating institutional changes. This paper examines the roles of professional and trade associations' impacts on institutions associated with a nascent and formative sector of a developing economy. In empirical terms, the paper offers an in-depth case study of India's National Association of Software and Services Companies (NASSCOM) on institutional changes related to the offshoring industry. The NASSCOM case shows that under appropriate conditions, professional and trade associations represent an alternative to the state in shaping the industry landscape

Professional and Trade Associations in a Nascent and Formative Sector of a Developing Economy: A Case Study of the NASSCOM Effect on the Indian Offshoring Industry

As important sources that shape institutional structures in an economy, professional and trade associations play significant roles in bringing and legitimating institutional changes. This paper examines the roles of professional and trade associations\u27 impacts on institutions associated with a nascent and formative sector of a developing economy. In empirical terms, the paper offers an in-depth case study of India\u27s National Association of Software and Services Companies (NASSCOM) on institutional changes related to the offshoring industry. The NASSCOM case shows that under appropriate conditions, professional and trade associations represent an alternative to the state in shaping the industry landscape

Organizational Responsiveness to Anti-offshoring Institutional Pressures

This study explores the extent to which organizations are responsive to pressures from institutional constituents against offshoring of information technology and business processes. Drawing on a theoretical framework that integrates institutional and strategic explanations, it proposes that organizational responsiveness to anti-offshoring institutional pressures is a function of both the characteristics of such pressures as well as organizations’ prior success with offshoring. Results based on moderated hierarchical multiple regression analyses on survey data from 84 offshoring client organizations indicate the following. First, both greater organizational expectations of enhanced social legitimacy obtained from compliance and mimetic influences from other organizations led to greater organizational responsiveness. Second, despite the strong precedent, organizational dependence on a key pressuring constituent had no effect. Third, both conflict of institutional expectations with organizational goals and greater regulatory environment uncertainty reduced responsiveness. Fourth, surprisingly, organizational success with offshoring had no direct effect on responsiveness. However, it attenuated the otherwise strong positive effect of social legitimacy and exacerbated the negative effect of regulatory environment uncertainty. Implications of these findings for research and practice are discussed

Exploring political risk in offshoring engagements

This research focuses on the analysis of political risk in the context of offshoring decisions. The study uses the Repertory Grid Technique, which entails a series of semi-structured interviews exploring key political risk experiences across offshoring engagements. The research extends the spectrum of political risk analysis in the context of offshoring engagements, and explores the varied impact of political risk across business activity types. The research identifies five key political risks affecting offshoring engagements and highlights the moderating effect of specific offshoring activity types Business Process Outsourcing, Information Technology Outsourcing or Knowledge Process Outsourcing on political risk implications. The research explores the conditioning effect of activity specific exposure to political risk and enhances the explanatory ability of the Transaction Cost Economics constructs, offering a novel operationalisation of the political risk component of external uncertainty. From a practical perspective, the research highlights the need for developing managerial tools to improve monitoring and identification of risks. The key practical contribution is the development of differentiated political risk typologies that can capture the nuances of external risks in offshoring, allowing for more accurate risk assessment of offshoring decisions

Innovation Offshoring:Asia's Emerging Role in Global Innovation Networks

Most analysts agree that critical ingredients for economic growth, competitiveness, and welfare in the United States have been policies that encourage strong investment in research and development (R&D) and innovation. In addition, there is a general perception that technological innovation must be based in the United States to remain a pillar of the American economy. Over the past decade, however, the rise of Asia as an important location for "innovation offshoring" has begun to challenge these familiar notions. Based on original research, this report demonstrates that innovation offshoring is driven by profound changes in corporate innovation management as well as by the globalization of markets for technology and knowledge workers. U.S. companies are at the forefront of this trend, but Asian governments and firms are playing an increasingly active role as promoters and new sources of innovation. Innovation offshoring has created a competitive challenge of historic proportions for the United States, requiring the nation to respond with a new national strategy. This report recommends that such a strategy include the following elements: output forecasting techniques ... Improve access to and collection of innovation-related data to inform the national policy debate; Address "home-made" causes of innovation offshoring by sustaining and building upon existing strengths of the U.S. innovation system; Support corporate innovation by (1) providing tax incentives to spur early-state investments in innovation start-ups and (2) reforming the U.S. patent system so it is more accessible to smaller inventors and innovators; and Upgrade the U.S. talent pool of knowledge workers by (1) providing incentives to study science and engineering, (2) encouraging the development of management, interpretive, cross-cultural, and other "soft" capabilities, and (3) encouraging immigration of highly skilled workers.Innovation Networks, Innovation Offshoring, Asia