Leveraging Offshore IT Outsourcing by SMEs through Online Marketplaces

Following their larger counterparts, an increasing number of small firms outsource their IT tasks to lower cost offshore destinations. For small firms, however, offshore outsourcing is a difficult undertaking as it involves high transaction costs. Online marketplaces for IT services, which have recently become available to small firms, make offshore IT outsourcing more accessible and manageable, although differences in the marketplace design result in varying outcomes across the marketplaces. This has consequences for SME’s decision as to which online marketplace to use, because different markets may have different types of benefits and costs. This paper sets to analyze some of the similarities and differences between online marketplaces for IT services and their effects for small firms. First, we analyze if and how online marketplaces reduce small firms’ transaction costs in offshore IT outsourcing. Second, we examine the effects of market entry barriers on outcomes of online marketplaces and their implications for small firms. The results indicate that online marketplaces for IT services do reduce transaction costs for small firms in offshore outsourcing across ten specific market processes. More surprising, however, is the finding that the lower market entry barriers for suppliers result in lower prices for buyers without compromising other aspects of market performance.Offshore IT Outsourcing;Online Market;Process-Stakeholder Analysis;Reverse Auction

E-commerce and its impact in logistic management: A state of art

Logistics management is defined as that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers' requirements. Traditional logistical issues may be amplified by an e-commerce venture. Adopting e-commerce may greatly expand the marketplace. The organization needs to be concerned with its ability to deliver its product to potential customers. Realizing the importance of E-commerce in logistic management, an attempt has been made in this paper to review the existing literature with the objective to gain insights into the impact of E-commerce in logistic management. The advantages of the E-commerce in logistic management are offered. Finally, summary of findings and calculations are presented

Profile information and business outcomes of providers in electronic service marketplaces : an empirical investigation

Electronic service marketplaces (ESMs) have become major exchange platforms for the online outsourcing of different services &ndash; especially software development &ndash; to providers. Provider profiles on ESMs encompass extensive information regarding the activities and transactions of providers and they are a main source of information for customers. Such profile information significantly facilitates the relationship development between customers and providers. The existing literature has focused on the impact of the ratings of providers, but so far has not investigated the impact of the other available profile information. Building on the integrated information response model, this study investigates how information presented by providers as well as information provided by the ESM influences the business outcomes of the providers. Based on data collected from one of the major ESMs, we found that profile information indeed has a significant impact on the business outcomes of providers.<br /

Prioritizing Offshore Vendor Selection Criteria for the North American Geospatial Industry

The U.S. market for geospatial services totaled US $2.2 billion in 2010, representing 50% of the global market. Data-processing firms subcontract labor-intensive portions of data services to offshore providers in South and East Asia and Eastern Europe. In general, half of all offshore contracts fail within the first 5 years because one or more parties consider the relationship unsuccessful. Despite the high failure rates, no study has examined the offshore vendor selection process in the geospatial industry. The purpose of this study was to determine the list of key offshore vendor selection criteria and the efficacy of the analytic hierarchy process (AHP) for ranking the criteria that North American geospatial companies consider in the offshore vendor selection process. After the selection of the initial list of factors from the literature and their validation in a pilot study, a final survey instrument was developed and administered to 15 subject matter experts (SMEs) in North America. The SMEs expressed their preferences for one criterion over another by pairwise comparisons, which served as input to the AHP procedure. The results showed that the quality of deliverables was the top ranked (out of 26) factors, instead of the price, which ranked third. Similarly, SMEs considered social and environmental consciousness on the vendor side as irrelevant. More importantly, the findings indicated that the structured AHP process provides a useful and effective methodology whose application may considerably improve the quality of the overall vendor selection process. Last, improved and stabilized business relationships leading to predictable budgets might catalyze social change, supporting stable employment. Consumers could benefit from derivative improvements in product quality and pricing

Leveraging Offshore IT Outsourcing by SMEs through Online Marketplaces

Following their larger counterparts, an increasing number of small firms outsource their IT tasks to lower cost offshore destinations. For small firms, however, offshore outsourcing is a difficult undertaking as it involves high transaction costs. Online marketplaces for IT services, which have recently become available to small firms, make offshore IT outsourcing more accessible and manageable, although differences in the marketplace design result in varying outcomes across the marketplaces. This has consequences for SME’s decision as to which online marketplace to use, because different markets may have different types of benefits and costs. This paper sets to analyze some of the similarities and differences between online marketplaces for IT services and their effects for small firms. First, we analyze if and how online marketplaces reduce small firms’ transaction costs in offshore IT outsourcing. Second, we examine the effects of market entry barriers on outcomes of online marketplaces and their implications for small firms. The results indicate that online marketplaces for IT services do reduce transaction costs for small firms in offshore outsourcing across ten specific market processes. More surprising, however, is the finding that the lower market entry barriers for suppliers result in lower prices for buyers without compromising other aspects of market performance

Who Gets the Job? Synthesis of Literature Findings on Provider Success in Crowdsourcing Marketplaces

Background: Over the past decade, crowdsourcing marketplaces — online exchange platforms which facilitate commercial outsourcing of services — have witnessed a dramatic growth in the number of participants (service providers and customers) and the value of outsourced services. Deciding about the most appropriate provider is a key challenge for customers in crowdsourcing marketplaces because available information about providers may be incomplete and sometimes irrelevant for customer decisions. Ineffective information impedes many service providers to develop long-term relationships with customers, obtain projects on a regular basis and survive on crowdsourcing marketplaces. Previous studies have investigated the impact of a range of factors on customers’ choice decisions and providers’ success, given the important role of customer–provider relationship development for long-term success on crowdsourcing marketplaces. Method: This paper reviews the literature of crowdsourcing marketplaces with the aim of developing a comprehensive list of factors that influence customers’ choice decisions and providers’ success. Results: We found 31 conceptually distinct profile information components/factors that determine customers’ choices and providers’ business outcomes on crowdsourcing marketplaces. Conclusion: We classified these 31 factors into five major categories: 1) prior relationship between a customer and a provider or a customer’s invitation, 2) providers’ bidding behavior, 3) crowdsourcing marketplace or auction characteristics, 4) providers’ profile information, and 5) customer characteristics. The main factors in each category, associated considerations, related literature gaps and avenues for future research are discussed in detail

Portfolios of Exchange Relationships: An Empirical Investigation of an Online Marketplace for IT Services

Small firms face distinct problems and opportunities when procuring IT resources. Whereas previous work focused at the level of firm or buyer-supplier dyad, we address portfolios of buyer-supplier relationships at an online marketplace for IT services. Using the portfolio approach, we develop a buyers taxonomy and analyze properties of resulting clusters.Our investigation reveals four clusters of buyers with distinct mixes of long-term and short-term supplier relationships. Although reverse auctions are found to be associated with short-term relationships and negotiations support long-term relationships, buyers in different clusters use the two mechanisms in combination to a different extent.Performance;Buyer-supplier relationships;IT services;Online markets;Outsourcing;Reverse auctions

Impacts of Live Chat on Refund Intention: Evidence from an Online Labor Market

Live chat plays a significant role in online labor markets, which mitigates the information asymmetry caused by the highly customized nature of service products. This study examines the impacts of live chat on refund intention in online labor markets and how these impacts are moderated by business familiarity. We collect unique archived data from a leading online labor market in Asia and hypothesize that reply speed has a negative effect on refund intention while both politeness intensity and sentiment intensity have a U-shaped effect on refund intention. In addition, these effects are proposed to be weakened by business familiarity formed by previous transaction experience. The study not only offers theoretical contributions to the online labor market literature by providing empirical insights on the impact of live chat on refund intention but also yields managerial implications for service providers and platform operators

Inferring Supplier Quality in the Gig Economy: The Effectiveness of Signals in Freelance Job Markets

Inferring quality of labor suppliers is a challenge in the gig economy. Many online freelance job markets address this challenge by incorporating signals. We test effectiveness of two kinds of information signals as indicators of supplier quality: skill signal (which reflects suppliers’ skill and potential), and achievement signal (which reflects suppliers’ past achievement). We theorize that two job characteristics in cross-national labor demand settings strengthen effectiveness of these signals: job duration, and cultural distance. Econometric analysis on a dataset from a leading online freelance job marketplace containing information on jobs posted by buyers and completed by suppliers located across several countries supports our hypotheses. We find that both skill and achievement signals are more effective at inferring supplier quality in jobs involving longer duration, and in jobs involving greater cultural distance between buyers and suppliers

Buying bundles: the effects of bundle attributes on the value of bundling

We consider the situation in which a buyer has to find the optimal degree of bundling for buying goods and services. From a review of the literature we develop attributes associated with bundling. Each of these attributes has an effect on the value of a bundle. Combined, the attributes determine the value of a bundle. We describe how the various attributes of a bundle contribute to the value of a bundle given the context of the buying situation. Based on interviews, a further analysis of bundle attributes and their effects on the bundle value is provided. The results of this analysis can be used to assist in finding the optimal degree of bundling