Challenges of Client-Vendor Relationships in Information Technology Outsourcing Engagements: An Interpretive Structural Modelling Approach

The client-vendor relationship is a key success factor for information technology outsourcing projects. Although many studies have been published about this concept, many of them have focused on a set of particular elements and have not investigated the relationship and dependencies between them. This research paper provides an overview about existing challenges for client-vendor relationships and discovers relationships between them by applying the ISM methodology. We conducted a literature research to gather and analyze relevant articles and identified 11 relevant challenges. Based on the literature research and 20 questionnaire responses we gathered from experts, we used interpretive structural modelling to discover the relevance and the contextual relationships among the identified challenges. The findings of this study reveal that three challenges, namely (1) lack of experience, (2) lack of good management practices and processes, and (3) lack of contractual objects can be treated as key elements for establishing a client-vendor relationship. We discuss further research directions and explain why all other identified challenges have high dependencies on each other

The Viability of Outsourcing in Organisational Performance: Benefits and Risks

Outsourcing is part of a system, as it includes products and services integrated in a value chain and which are performed by an external (contracted) firm, aiming to establish an interdependent, collaborative and trusting relationship between the contracting and contracted firms. Like any dimension of business in organisations, changes in organisational structures and in how the service is produced/provided, outsourcing brings benefits and risks. Therefore, from literature review method, this chapter aims to explore the concept of outsourcing as a differentiating tool in organisations’ performance, emphasising the benefits and risks. The results showed the dimensions to consider in the decision to implement outsourcing, which are: (1) transaction costs, (2) use of resources, and (3) collaboration between the parties. The contribution of the study is to present a synopsis of the outsourcing topic, specifically the theories that support it, its benefits and risks. Additionally, a decision-making model is presented, in the certainty of its usefulness for the organizations’ managers

Innovation Through IT and Business Process Outsourcing – Literature Review

Innovation is increasingly expected in today’s ongoing outsourcing relationships. While prior studies made considerable strides to examine innovation through outsourcing, the research landscape remains highly fragmented. In this review, we bring together and analyse prior research examining this emerging phenomenon in the contexts of IT outsourcing (ITO) and business process outsourcing (BPO). We focus on articles published between 1997 and 2018 in the top outlets across information systems (IS), management, and related disciplines. Our contribution is threefold: First, we present an overview of the key literature on this topic. Second, we identify and document three different scopes of achievable innovation through outsourcing, associated firm-specific intentions and capabilities, and relationship governance structures conducive to such value creating activities. Third, we put forward propositions for future research on innovation through outsourcing

Opening the Black Box of Advisors in Information Technology Outsourcing: An Advisory Activity Model

Information technology outsourcing (ITO) is an important market phenomenon and research topic. Recently, research has identified advisors as a key driver for successful ITO engagements. In this paper, we investigate the activities of third-party advisors in ITO engagements for the first time. We used an exploratory qualitative research approach and conducted 14 expert interviews with experienced industry practitioners. In analyzing the data, we identified 104 activities that serve as the basis for a novel IT advisory activity model for ITO. We also identified common viewpoints among the practitioners and matched them with findings from other research studies based on a literature review. Our model provides interesting insights into ITO and the role that advisors play in client-vendor relationships. This study delivers a basis for further research about advisors’ influence on clients and vendors in the ITO context

Exploring the effect of familiarity and advisory services on innovation outcomes in outsourcing settings

Innovation through outsourcing can be hindered as a result of opportunistic behaviour. As a remedy, the extant literature encourages firms to enhance familiarity between the parties and/or consider using advisory services. In this paper, we seek to examine the effect of knowledge familiarity (client-supplier and supplier-client) and relational familiarity on innovation outcomes. Further, we also examine whether the presence of advisors improves innovation outcomes. Our results suggest that a higher degree of relational familiarity and client-supplier knowledge familiarity are associated with better innovation outcomes. We also reveal that client-supplier knowledge familiarity mediates the effect of supplier-client knowledge familiarity on innovation outcomes. We did not find support for the direct effect of advisors on innovation outcomes. Instead, the presence of advisors moderates the effect of supplier-client and relational familiarity on innovation outcomes. We consider the implications for the IS outsourcing literature and practice

Strategies for Mitigating the Costs of Evolving U.S. Governmental Regulations in the Financial Investment Industry

Financial investment leaders who lack strategies to respond to U.S. government financial policy changes’ risk decreasing organizational profitability resulting in customer and employee attrition. Grounded in Porter’s theory of competitive advantage, Barney’s resource-based view (RBV) theory and Pigou’s public interest theory, the purpose of this qualitative multicase study was to explore strategies financial investment leaders use to respond to U.S. governmental policy changes. The participants comprised three financial investment leaders at three Jacksonville, Florida organizations. Data were collected using semistructured interviews conducted face to face and by telephone along with documents obtained from the company websites. Through thematic analysis four themes emerged: computer technology improvements, outsourcing of functions, an enhanced specialization of client selection, and financial literacy training. A key recommendation is for financial investment leaders to invest in computer technology to expand client access to resources while remaining in governmental compliance. The implications for positive social change include the potential to generate cost savings that can be used to promote macroeconomic stability through financial literacy training, which can benefit clients, families, and local communities through better investing

Strategies for Mitigating the Costs of Evolving U.S. Governmental Regulations in the Financial Investment Industry

Financial investment leaders who lack strategies to respond to U.S. government financial policy changes’ risk decreasing organizational profitability resulting in customer and employee attrition. Grounded in Porter’s theory of competitive advantage, Barney’s resource-based view (RBV) theory and Pigou’s public interest theory, the purpose of this qualitative multicase study was to explore strategies financial investment leaders use to respond to U.S. governmental policy changes. The participants comprised three financial investment leaders at three Jacksonville, Florida organizations. Data were collected using semistructured interviews conducted face to face and by telephone along with documents obtained from the company websites. Through thematic analysis four themes emerged: computer technology improvements, outsourcing of functions, an enhanced specialization of client selection, and financial literacy training. A key recommendation is for financial investment leaders to invest in computer technology to expand client access to resources while remaining in governmental compliance. The implications for positive social change include the potential to generate cost savings that can be used to promote macroeconomic stability through financial literacy training, which can benefit clients, families, and local communities through better investing

Exploring Strategic Innovation in a Business Services Outsourcing Context: Client and Provider Perspectives

Business services outsourcing engagements, typically comprising the transfer of information technology and other supporting business functions, are traditionally leveraged for cost savings. Recently, there has been a shift in demands towards strategic innovations that may substantially improve a client’s competitive position. Two research questions are addressed: (1) How has existing research conceptualised the strategic innovation through outsourcing process and how have reference theories been applied?, and (2) how can high degrees of organisational readiness be created for strategic innovation initiatives in outsourcing from a (a) client perspective and (b) provider perspective? A conceptual study in form of a theoretical literature review is developed to respond to the first research question. The fragmented research landscape is consolidated by capturing insights from 95 papers, published between 1998 and 2020. Thematic analysis findings are integrated in a four-phase framework. Based on the review, the gap tied to the second research question is carved out. Specifically, virtually no research has yet explored the formation of organisational readiness for strategic innovation initiatives in an outsourcing context. Responding to the second research question requires the exploration of notable factors in the outsourcing project, organisational and market environment, that influence the readiness of organisational members to support the implementation of strategic innovation initiatives. Two qualitative case studies are conducted, one involving a care hospital, the other involving a service provider. Organisational change readiness theory is used as theoretical lens. A framework is developed that accommodates identified readiness-influencing factors. Findings further indicate that readiness levels evolve and may decline during an initiative’s implementation due to unforeseen disturbances. Corrective measures are then required. This thesis offers two major contributions to the Information Systems sourcing research stream, namely a comprehensive theoretical review of existing innovation through outsourcing literature, and the identification of readiness-influencing factors from a client and provider perspective