A CAPABILITY MATURITY MODEL OF INFORMATION TECHNOLOGY OUTSOURCING RELATIONSHIPS: A VENDOR PERSPECTIVE

Information technology outsourcing relationships between clients and suppliers are generally embedded into formal contracts. The empirical literature on contracting usually assumes that contractual completeness is difficult to achieve due to the transaction costs of describing—or of even foreseeing—the possible states of nature in advance. Little research has been done on the on-going set of processes during the life of the client/supplier relationship in the post phase of the contract where unforeseen contingencies and events emerge. Hence, a process improvement framework for studying IT outsourcing relationships is needed to provide more detailed metrics for assessing and managing the maturity level of IT outsourcing relationships. The purpose of this paper is to develop and validate an evolutionary process improvement model to manage relationships between clients and suppliers in the context of information technology outsourcing. We call this model the Capability Maturity Model of Information Technology Outsourcing Relationships (CMMITOR). The model presents the key elements of maturity in IT outsourcing relationships from an ad hoc stage, immature relationship management processes to highly mature and disciplined ones. The preliminary results show that the process-view of IT relationships is suited for this purpose. Key process areas were identified and refined through a card sorting procedure. The validation of the resultant model is underway through a field study of ten IT outsourcing relationships. Implications for research and practice are discussed

An empirical evaluation of client-vendor relationships in high maturity Indian software outsourcing companies

The study presented in this thesis investigates offshore software outsourcing relationships. Offshore software outsourcing has been increasing continuously for the last decade. More and more software vendor companies from different countries such as India, Russia, Brazil and China are joining the offshore `bandwagon'. Indian software companies especially have managed to secure a leading position as offshore software outsourcing vendors. However, with more client companies outsourcing their software operations offshore, issues associated with the establishment and management of offshore outsourcing relationships have become more important. With the growing volume of offshore outsourcing, the number of failures is also increasing. A review of the literature suggests that success or failure is mainly dependent on the management of relationships between client and vendor. Subsequently, it is imperative to identify critical factors that can help to better manage offshore software outsourcing relationships. Furthermore, it is also important to identify the difficulties faced in managing offshore relationships and also how clients and vendors develop mutual trust. Trust is important to understand in the offshore software outsourcing context as it has been reported as the most significant contributor to the management of any human relationship. Nonetheless, different advantages that motivate clients to outsource are also important in understanding offshore software outsourcing. In this study, motivators, difficulties, critical relationship management factors and trust building factors are studied by means of empirical investigation into eighteen high maturity Indian software companies and six of their clients based in the USA and Europe. Multiple case studies with grounded theory analysis techniques are used to conduct the empirical investigation. Grounded theory, which is a part of qualitative research, helps to develop emergent model from empirical data. Furthermore, multiple case studies are used as objects to collect qualitative data and organise overall investigation. The research methods used were piloted with two Indian software companies before conducting the full empirical investigation. The results of this investigation suggest that client companies are motivated to outsource their software offshore by cost savings, quality, flexibility, core competence, skills availability, higher productivity, faster development, technical expertise and high maturity of vendor. The results also uncovered difficulties faced by clients and vendors in managing relationships. Difficulties include managing cultural differences, expectation mismatch, language differences, loss of control, distance, time zone differences, workforce reshuffling and post-contractual matters. This investigation further identifies critical factors to managing offshore outsourcing relationships such as effective communication, a process driven approach, commitment to the project, transparency in actions, consistency in performance, value addition and allocating resources effectively in the project. Furthermore, results from this study suggest that previous work reference, experience and reputation in the offshore outsourcing business, background of the key vendor employees, investments, prototyping and personal visits from the client are important for achieving trust. This study also identifies that to maintain trust in the relationship both clients and vendors perceive critical factors such as commitment, process driven approach, communication, confidentiality, performance, honesty, transparency, demonstrability, personal relationships and working together in outsourcing project. Based on the results of the empirical results and their discussions, this study presents an emergent model and practical guidelines for managing offshore software outsourcing relationships. The uniqueness of this investigation is in its large scale empirical investigation into high maturity software companies. Furthermore, most previous studies have investigated either clients or vendors, whereas this study investigates vendors and their corresponding clients. An investigation into trust in offshore software outsourcing relationships is also a significant addition to the existing literature relevant to software outsourcing. The empirical investigation gave rise to proposals for discussions and to an emergent empirical model. Thus the current body of knowledge in offshore software outsourcing is enhanced by this work. Moreover, practical guidelines, based on empirical results are proposed for client and vendors to help them manage their offshore software outsourcing relationships

A framework and tool to manage Cloud Computing service quality

Cloud Computing has generated considerable interest in both companies specialized in Information and Communication Technology and business context in general. The Sourcing Capability Maturity Model for service (e-SCM) is a capability model for offshore outsourcing services between clients and providers that offers appropriate strategies to enhance Cloud Computing implementation. It intends to achieve the required quality of service and develop an effective working relationship between clients and providers. Moreover, quality evaluation framework is a framework to control the quality of any product and/or process. It offers a tool support that can generate software artifacts to manage any type of product and service efficiently and effectively. Thus, the aim of this paper was to make this framework and tool support available to manage Cloud Computing service quality between clients and providers by means of e-SCM.Ministerio de Ciencia e Innovación TIN2013-46928-C3-3-RJunta de Andalucía TIC-578

Transmission losses cost allocation in restructed electricity market environment

During these recent decades, the restructuring system of electricity market has been taken places around the whole world. Due to the restructuring (deregulation), the electrical power system has been divided into three separates categories according to the function. First stage of power system is the generation companies (GENCOs), followed by transmission companies (TRANSCOs) and distribution companies (DISCOs). The competitive environment will be handling by a non-profit entity, independent system operator (ISO) that functioning as the system securities that have to make sure that the power system continues to operate in a stable and economical manner. However, restructuring system can give effect during the energy transmission. One of the transmission issues is regarding the power losses. To overcome the losses, generators must generate more power. The issue regarding the transmission losses in deregulated system is how to allocate it to the user and charge them in fair ways as in for instance the pool trading model, it is hard to trace the power contribution and losses of each user in transmission line. In addition, the users didn’t want to pay the losses, it means that the ISO have to responsible for the losses and it will be unfair to put the responsible to ISO alone. Therefore, in this project, the allocation of transmission losses and loss cost methods which are the pro-rata and proportional sharing method will be investigated. Comparison between those methods will be done in order to identify which types of method that reflect an efficient and fair way to distribute the cost of the transmission losses to the user. These chosen methods will be tested on IEEE bus system

Validating adequacy and suitability of business-IT alignment criteria in an inter-enterprise maturity model

Aligning requirements of a business with its information technology is currently a major issue in enterprise computing. Existing literature indicates important criteria to judge the level of alignment between business and IT within a single enterprise. However, identifying such criteria in an inter-enterprise setting – or re-thinking the existing ones – is hardly addressed at all. Business-IT alignment in such settings poses new challenges, as in inter-enterprise collaborations, alignment is driven by economic processes instead of centralized decision-making processes. In our research, we develop a maturity model for business-IT alignment in inter-enterprise settings that takes this difference into account. In this paper, we report on a multi-method approach we devised to confront the validation of the business-IT alignment criteria that we included in the maturity model. As independent feedback is critical for our validation, we used a focus group session and a case study as instruments to take the first step in validating the business-IT alignment criteria. We present how we applied our approach, what we learnt, and what the implications were for our model

Make or Buy in a mature industry? Models of client-supplier relationships under TCT and RBV perspectives

In this paper, we use the transaction cost theory (TCT) and the resource-based view (RBV) to discuss three propositions on the models of client-supplier relationships in mature industries. The two theories seem to advance different organizational forms of the client-supplier relationships, and in some instances contradictory. How should firms organize to prosper and grow, namely in the international markets? Through the case study of three Portuguese packaging firms, with primary (interviews) and secondary data, we discuss how the three firms deploy three distinct strategic organization models in a mature industry. One firm utilizes market-based governance mechanisms, and concentrates its production in a few selected locations. Another firm vertically integrates almost the entire value chain of the product to provide full service to its clients. The third firm operates in a model of integrated outsourcing, with the installation "wall to wall" to its clients. The models client-supplier assumed by these firms are based on efficient, stable, and trustworthy relationships, that permit the focus on their core competences and the reduction of the transaction costs. Firms? superior performance requires a proper alignment of hierarchical and relational governance taking in consideration the dimensions of the transactions.Client-supplier relationship models; Outsourcing; TCT; RBV; Strategic Governance

Collaborative improvement as an inspiration for supply chain collaboration

The battlefield of competition is today moving from the level of\ud individual firms to the one of the extended enterprises, that is, networks of customers and their suppliers. This paper discusses how learning and continuous improvement today take place in processes based on daily collaboration at intercompany level, i.e. Extended Manufacturing Enterprises (EMEs). The purpose of the paper is to present a preliminary theory on Collaborative Improvement (CoI), i.e. continuous improvement at the EME level. Based on a literature review on Supply Networks, and Continuous Improvement and on evidence from two explorative case studies, the paper proposes a model for Collaborative Improvement in EMEs and discusses a research approach based on Action Research and Action Learning to further develop preliminary theory and actionable knowledge on how to foster and sustain CoI in EMEs

A Systematic Approach to Optimise Management in Global Sourcing Relationships

Despite a large number of studies, global IT sourcing projects are, in practice, performed ad-hoc and rely mostly on the manager’s experience. Outsourcing software development presents extra challenges because development is performed in an inter-organisational network. Although organisations collaborate by transferring knowledge from the customer to the vendor (e.g., requirements) and from the vendor to the client (e.g., product and status reports), each has its own interests and needs; which often conflict. Tacit requirements, conflicting interests and knowledge-domain gaps contribute to generate final solutions that cost more in terms of resources than what was originally planned or that do not help customers to meet their ambitions. In this work we propose eStudio, our semi-automatic quantitative-data based framework to provide guidance to reason about obstacles in, for instance, knowledge co-ordination

Governance of Offshore IT Outsourcing at Shell Global Functions IT-BAM Development and Application of a Governance Framework to Improve Outsourcing Relationships

The lack of effective IT governance is widely recognized as a key inhibitor to successful global IT outsourcing relationships. In this study we present the development and application of a governance framework to improve outsourcing relationships. The approach used to developing an IT governance framework includes a meta model and a customization process to fit the framework to the target organization. The IT governance framework consists of four different elements (1) organisational structures, (2) joint processes between in- and outsourcer, (3) responsibilities that link roles to processes and (4) a diverse set of control indicators to measure the success of the relationship. The IT governance framework is put in practice in Shell GFIT BAM, a part of Shell that concluded to have a lack of management control over at least one of their outsourcing relationships. In a workshop the governance framework was used to perform a gap analysis between the current and desired governance. Several gaps were identified in the way roles and responsibilities are assigned and joint processes are set-up. Moreover, this workshop also showed the usefulness and usability of the IT governance framework in structuring, providing input and managing stakeholders in the discussions around IT governance