Managing Flexibility in Outsourcing

In recent years, outsourcing has gained considerable management attention. However, the benefits of outsourcing are not without concessions. One major risk is losing the flexibility to change the extent, nature, or scope of the outsourced business services, and such flexibility is strategically imperative in today\u27s dynamic business environment. This paper seeks to clarify the multi-dimensional notion of flexibility in outsourcing by examining robustness, modifiability, new capability, and ease of exit. Adapting from Evans (1991), we also develop a framework to classify existing practices in managing outsourcing flexibility. We go beyond contractual provision to surface a portfolio of pre-emptive, protective, exploitive, and corrective maneuvers. These strategic maneuvers map well to traditional notions in coordination theory, both in advanced structuring through loose coupling and dependency diversification, and in dynamic adjustment through proactive sensing and reactive adapting. We put forward a set of propositions hypothesizing the relationships between the various strategic maneuvers and the different dimensions of outsourcing flexibility, and discuss the moderating impact of such maneuvers on outsourcing success. We hope the greater conceptual clarity will not only contribute to the effectiveness of outsourcing management but also spawn a new research agenda on outsourcing flexibility

Effective Strategies for Managing the Outsourcing of Information Technology

More than half of information technology (IT) outsourced projects fail, primarily due to a lack of effective management practices surrounding the outsourcing end-to-end process. Ineffective management of the IT outsourcing (ITO) process affects organizations in the form of higher than expected project costs, including greater vendor switching or reintegration costs, poor quality, and loss of profits. These effects indicate that some business leaders lack the strategies to effectively manage the ITO process. The purpose of this single-case study was to apply the transaction cost economics (TCE) theory to explore strategies 5 business professionals use to manage an ITO project in a financial services organization located in the Midwestern region of the United States. Participant selection was purposeful and was based on the integral role the participants play on the ITO project. Data collection occurred via face-to-face semistructured interviews with the participants and the review of company documents. Data were analyzed using inductive coding of phrases, word frequency searches, and theme interpretation. Three themes emerged: vendor governance and oversight, collaborative strategic partnership, and risk management strategies enabled effective management of ITO. Identifying and executing appropriate outsourcing strategies may contribute to social change by improving outsourcing infrastructure, which might support job creation; increasing standards of living, especially within emerging markets; and heightening awareness of different cultures, norms, and languages among people living in different regions around the world to establish commonalities and gain alignment with business practices

Strategic governance and risk-management of the outsourcing ecosystem:developing dynamic capabilities and addressing implementation challenges

As outsourcing continues to grow in large global organisations, governance and risk management of the related outsourcing ecosystem is evolving as a strategic Board-level activity, driving competitive advantage and value-creation, in addition to value-protection. Amidst this growth and evolution, the outsourcing of Information Technology (IT) and IT-enabled Business Process Outsourcing (BPO) continues to mature into a broader category referred to by contemporary researchers as “business services” including almost every service that can be delivered by third parties, often enabled by digitisation and technology. Through such strategic initiatives, focused on creating inimitable competitive advantage and organisational value, organisations have increased their levels of dependence on outsourcing, exposing themselves to newer risks amid shifting business environments. But despite these developments, there has been limited research on the ability of organisations to manage risks around outsourcing with a dynamic mind-set to create and protect value for organisations. Instead, most research continues to focus exclusively on preventing “bad things happening”. The first part of the research establishes the context by providing a forward-looking multi-disciplinary view on strategic risk and governance related to outsourcing. This is followed by gaining an understanding of how and why large global organisations are broadening their perspective and enhancing maturity over governance and risk-management around their outsourcing ecosystem, including capabilities that they must develop to emerge as astute decision-makers, using industry-specific case studies. The second part of the research uses primary data to capture the overall progress made in achieving this transformation and implementation challenges. This thesis contributes to the growing body of outsourcing literature by focusing on governance from a novel “outsourcing ecosystem” perspective. It also makes practical contributions by identifying and addressing implementation challenges relevant to this transformational thinking, together with a 2x2 framework, which hold relevance for organisations operating with a significant outsourcing ecosystem and their leadership

The effects of outsourcing practices conducted by organisations in Nairobi

The purpose of this study is to investigate the relationship between outsourcing and development in Nairobi. The key research question for this study is what are the impacts of outsourcing practices conducted by organisations in Nairobi? Data were obtained from questionnaires distributed in December 2010. A total of 85 profit-making firms in Nairobi with a sample of 165 management employees were selected for this study. The empirical findings obtained relate to four outsourcing theories. Transaction Cost Analysis (TCA) Theory focuses on the cost savings that result from outsourcing. Agency Outsourcing Theory centres on outsourcing firms hiring agents to achieve productivity. Hiring agents may result in permanent staff being retrenched and additional outsourcing personnel being contracted and job creation and/or job loss results. Expectation Confirmation Theory (ECT) emphasises the importance of an outsourcing provider conforming to quality management principles. Resource Based Theory (RBT) proposes that organisations need a collection of resources and capabilities to execute outsourcing successfully. Findings further suggested that outsourcing can yield positive and/or negative outcomes depending on risks encountered, the business environment, company policies, function/s to be outsourced, and the competence and commitment of an outsourcing vendor. To further enhance the positive impact of outsourcing three improvements need to be executed: formulation of standard policies, price regulations, and commitment of outsourcing firms in adhering to set contract deadlines. It is suggested that the following would allow organisations to gain more from outsourcing in the future: the adoption of international/offshore outsourcing practices, more commitment by outsourcing consultants, the standardisation of charges for outsourcing contracts, and the use of new technology that would improve how outsourcing is conducted. It is concluded that the positive impacts of outsourcing would foster development to some extent while the possible negative impact of outsourcing would impede development

Power Dependence in the Governance of Public-Private e- Government Infrastructures

National electronic identification systems (e-IDs) are key e-government infrastructures that form the backbone of e-government services. When developed via public-private partnerships (PPP), such e-government infrastructures require appropriate governance arrangements to sustain a delicate balance between governments and the private actors involved. Using the lens of power dependence theory, we investigate the ongoing tender process of the third-generation e-ID in Denmark. The key actors are public agencies and the financial sector. Early findings illustrate how contextual factors related to market, technology, regulations, and social norms affect the distribution of power dependence between the actors; such distribution will eventually shape the governance arrangement resulting from the tender. Through this study, we expect to contribute to research on governance of public-private e-government infrastructures, to research on large scale infrastructure procurement processes and e-ID, and to the theoretical development of power-dependence theory

Supply chain strategies in an era of natural resource scarcity

Purpose: The purpose of this paper is to explore the implications of natural resource scarcity (NRS) for companies’ supply chain strategies. Design/methodology/approach: Drawing on the resource dependence theory (RDT), a conceptual model is developed and validated through the means of exploratory research. The empirical work includes the assessment of qualitative data collected via 22 interviews representing six large multinational companies from the manufacturing sector. Findings: When the resources are scarce and vitally important, companies use buffering strategies. Buffering and bridging strategies are preferred when there are a few alternative suppliers for the specific resource and when there is limited access to scarce natural resources. Research limitations/implications: The research focuses on large multinational manufacturing companies so results may not be generalised to other sectors and to small- and medium-sized firms. Future research needs to examine the implications of NRS for organisational performance. Practical implications: This research provides direction to manufacturing companies for adopting the best supply chain strategy to cope with NRS. Originality/value: This paper adds to the body of knowledge by providing new data and empirical insights into the issue of NRS in supply chains. The RDT has not been previously employed in this context. Past studies are mainly conceptual and, thus, the value of this paper comes from using a qualitative approach on gaining in-depth insights into supply chain-related NRS strategies and its antecedents

The Impact of COVID-19 on Supply Chains and E-commerce Logistics

As a result of the COVID-19 pandemic, supply, demand, and logistics have all been affected. Due to its unpredictable severity, the pandemic has highlighted the need to modify the existing supply chain model, the consumer structure model, and the digitization of markets. At the same time, the situation under COVID-19 offers increasing opportunities for e-commerce, including new business models and online commercial activities. This master's thesis aims to analyze how COVID-19 will affect global supply chains and e-commerce. Moreover, it will try to analyze the practices of major e-commerce platforms during the pandemic to determine whether there are opportunities for innovation and development in the future. The study will examine how retailers adapted to supply chain disruptions caused by the pandemic from a practical perspective and highlight the critical role of technology in these processes. The research provides insights into how companies are coping with long-term disruptions. The study we conducted used a qualitative approach, which included a case study and a SWOT analysis. In addition, we analyzed quantitative operational data from public financial reports released by JD.com.Our study examines the effects of a pandemic on supply chains. It also summarises the challenges faced by the retail sector and the strategies used by JD.com during the challenging period. During the pandemic, JD.com was able to handle the various aspects of its supply chain management through an integrated supply chain and intelligence platform. This study presents a supply chain resilience analysis by using actual operational data. Moreover, It suggests that companies should consider operational flexibility and collaboration outside the supply chain to adapt to significant supply chain disruptions like COVID-19

Offshore Business Processing Outsourcing by Australian Enterprises to Service Providers Located in India

The primary research question for this PhD was: “What are the key factors that contribute to the success of offshore business process outsourcing (OBPO) by Australian and international organisations to service providers located in India and the Philippines?” A qualitative research design in the positivist paradigm was adopted, involving longitudinal case studies of five client companies. A primary contribution was identification of critical success factors for management of OBPO at the individual company level

Interplay between network configurations and network governance mechanisms in supply networks a systematic literature review

Purpose: This work systematically reviews the extant academic management literature on supply networks. It specifically examines how network configurations and network governance mechanisms influence each other in supply networks. Design: 125 analytical and empirical studies were identified using an evidence-based approach to review the literature mainly published between 1985 and 2012. Synthesis: Drawing on a multi-disciplinary theoretical foundation, this work develops an integrative framework to identify three distinct yet interdependent themes that characterize the study of supply networks: a) Network Configurations (structures and relationships); b) Network Governance Mechanisms (formal and informal); and c) The Interplay between Network Configurations and Network Governance Mechanisms. Findings: Network configurations and network governance mechanisms mutually influence each other and cannot be considered in isolation. Formal and informal governance mechanisms provide better control when used as complements rather than as substitutes. The choice of governance mechanism depends on the nature of exchange; role of management; desired level of control; level of flexibility in formal contracts; and complementary role of formal and informal governance mechanism. Research implications: This nascent field has thematic and methodological research opportunities for academics. Comparative network analysis using longitudinal case studies offers a rich area for further study. Practical Implications: The complexity surrounding the conflicting roles of managers at the organisation and network levels poses a significant challenge during the development and implementation stage of strategic network policies. Originality/value: This review reveals that formal and informal governance mechanisms provide better control when used as complements rather than as substitutes

Understanding the Phenomenon of Cloud Computing Adoption within Organizations

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