Buyer Commitment and Opportunism in the Online Market for IT Services

Companies increasingly outsource IT-related tasks using reverse auction mechanisms embedded into online marketplaces. However, a considerable proportion of auctions at these marketplaces do not result in a contract between buyer and supplier. Extant literature mostly refers to costly bidding and bid evaluation to explain this phenomenon. Another possible explanation is that because of the low entry barriers, buyers with a low commitment to exchange can use the marketplace solely for information gath-ering purposes such as price benchmarking and obtaining free consultations, having little or no intention to contract a supplier. We test this explanation by looking at how different types of costs incurred by the buyer during the sourcing process, are related to the outcome of reverse auctions in terms of contract award. We argue that higher levels of search, preparation and negotiation costs are associated with higher commitment to exchange and find that opportunistic behaviour does indeed play a part in the non-contracted projects, while committed buyers are more likely to enter into a contract with a supplier. The hypotheses are tested on a sample of 2,574 reverse auctions at a leading online marketplace for IT services and further verified across projects of different value and different levels of buyer experience. On the practical side, we recommend setting up entry barriers for buyers with a low level of commitment.IT Outsourcing;Online Markets;Opportunism;Reverse Auctions;Transaction Costs

'Red flags of corruption'in world bank projects : an analysis of infrastructure contracts

"Red flags"are indicators of potential issues regarding governance failure, collusion or corruption in projects. While some specific red flags can be powerful indicators of issues to be addressed, the hypothesis of this paper is that many proposed red flags are potentially too ubiquitous and randomly distributed to be useful as indicators of significant governance failure. The paper examines project documentation from a small sample of World Bank water and sanitation projects in an attempt to collect data on the presence or absence of 13 commonly accepted red flags. This paper finds that: (i) almost every contract reviewed raised at least one of 13 red flags analyzed; (ii) potentially tainted contracts did not exhibit notably more red flags than control contracts; and (iii) the occurrence of multiple red flags in the same contract was rare enough to suggest that joint occurrence was largely by chance, not as a result of a strongly causal inter-relationship between flags. The ubiquity and apparent randomness of these red flags suggests that their roll-out as a monitoring tool requires additional thought as to interpretation, context and use. The paper examines an alternate tool for uncovering potential problem projects -- supplier concentration. Across a very small sample, there does appear to be a relationship between such concentration and potential problem projects.Post Conflict Reconstruction,Debt Markets,Government Procurement,Investment and Investment Climate,Literature&Folklore

The legal and contractual aspects of networked cooperation for the building and construction industry

The construction industry is a project-based business bringing together many different organisations to complete a desired goal. The strategic use of Information and Communication Technologies (ICT) has enabled the goal to be completed more effectively. Two issues require addressing, the technology itself and the implementation factors of the technology. Such implementation factors should consider, among other factors, the legal and contractual issues associated with the use of ICT, training requirements and its effects on the organisational culture. To date the legal and contractual issues have not been extensively covered, and it is recognised that the technologies have not been properly covered by any recognised legal and contractual practices. This in turn is threatening to inhibit the growth and prosperity of the use of the technology on construction projects. This paper discusses these legal and contractual issues and describes methods and tools that can be used to enable the growth of technology to be used in a legal and contractually valid environment

Planning research and educational partnerships with Indigenous communities : practice, realities and lessons

Increasingly planning practice and research are having to engage with Indigenous communities in Australia to empower and position their knowledge in planning strategies and arguments. But also to act as articulators of their cultural knowledge, landscape aspirations and responsibilities and the need to ensure that they are directly consulted in projects that impact upon their &lsquo;country&rsquo; generally and specifically. This need has changed rapidly over the last 25 years because of land title claim legal precedents, state and Commonwealth legislative changes, and policy shifts to address reconciliation and the consequences of the fore-going precedents and enactments. While planning instruments and their policies have shifted, as well as research grant expectations and obligations, many of these Western protocols do not recognise and sympathetically deal with the cultural and practical realities of Indigenous community management dynamics, consultation practices and procedures, and cultural events much of which are placing considerable strain upon communities who do not have the human and financial resources to manage, respond, co-operate and inform in the same manner expected of non-Indigenous communities in Australia. This paper reviews several planning formal research, contract research and educational engagements and case studies between the authors and various Indigenous communities, and highlights key issues, myths and flaws in the way Western planning and research expectations are imposed upon Indigenous communities that often thwart the quality and uncertainty of planning outcomes for which the clients, research agencies, and government entities were seeking to create.<br /

Outsourcing and acquisition models comparison related to IT supplier selection decision analysis

This paper presents a comparison of acquisition models related to decision analysis of IT supplier selection. The main standards are: Capability Maturity Model Integration for Acquisition (CMMI-ACQ), ISO / IEC 12207 Information Technology / Software Life Cycle Processes, IEEE 1062 Recommended Practice for Software Acquisition, the IT Infrastructure Library (ITIL) and the Project Management Body of Knowledge (PMBOK) guide. The objective of this paper is to compare the previous models to find the advantages and disadvantages of them for the future development of a decision model for IT supplier selection

Market Information and Price Instability : An Insight into Vegetable Markets in Senegal

Market gardening has been increasing fast in Senegal. But farmers face high marketing risks: daily price fluctuations exceed an average 20% for some products, seasonality is strong, anticipation based on prices leads to cyclic movements. Farmers and market operators have found various forms of coordination to manage uncertainty. “Coxers” are specifically dedicated to information gathering, either in rural or wholesale urban markets or to transport negotiation. Paid per unit handled, they limit their own risk, whereas they reduce uncertainty for their partners. In other cases, interlinked transactions permit to provide inputs to producers despite the deficient credit market; meanwhile, it secures merchants access to product. As it is the case in many other countries, information provided by MIS is of little help to Senegalese market gardeners. The updated and more targeted access to information through MANOBI services allows producers to improve their negotiation capacity. But it does not modify the existing coordination features, given that they are not only determined by needs in information (but also by social links, access to credit, payment modalities, transport facilities…).Horticulture, Price analysis, Market instability, Information, Transaction costs

The Dag-Brucken ASRS Case Study

In 1996 an agreement was made between a well-known beverage manufacturer, Super-Cola Taiwan, (SCT) and a small Australian electrical engineering company, Dag-Brücken ASRS Pty Ltd, (DB), to provide an automated storage and retrieval system (ASRS) facility as part of SCT’s production facilities in Asia. Recognising the potential of their innovative and technically advanced design, DB was awarded a State Premiers Export Award and was a finalist in that year’s National Export Awards. The case tracks the development and subsequent implementation of the SCT ASRS project, setting out to highlight how the lack of appropriate IT development processes contributed to the ultimate failure of the project and the subsequent winding up of DB only one year after being honoured with these prestigious awards. The case provides compelling evidence of the types of project management incompetency that, from the literature, appears to contribute to the high failure rate in IT projects. For confidentiality reasons, the names of the principal parties are changed, but the case covers actual events documented by one of the project team members as part of his postgraduate studies, providing an example of the special mode of evidence collection that Yin (1994) calls ‘participant-observation’