An Approach for Portfolio Selection in Multi-Vendor IT Outsourcing

Companies increasingly extend their outsourcing strategies from single-sourcing to multisourcing combining best-of-breed vendors. This paper includes an analytical model to evaluate a company’s multisourcing strategy. The model can be applied for decision support to answer the questions, how many and which outsourcing vendors to integrate in the implementation of an IT project. We identify an optimal vendor portfolio considering monetary benefits and risk diversification as well as transaction costs arising from the integration and coordination of outsourcing vendors. Based upon a simulation, we find that it makes good economic sense to include a risk evaluation into the multisourcing decision process even if it is subject to misestimation. Therewith, companies are able to avoid unnecessary high risk and consequently a possible high damage. Furthermore, we find that it is better to be too cautious in risk assessment than to be too negligent

Optimizing company cash : a guide for financial professionals

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Towards a Design Theory for Customer Satisfaction-Oriented IT Vendor Management

IT vendor management (ITVM) plays an increasingly relevant role for IT organizations; many companies already spend more than half their IT budgets on services from external providers. These providers are often in direct contact with internal IT and business staff, thus significantly impacting their satisfaction. Although recent studies reveal that companies are often dissatisfied with external IT suppliers, the ITVM literature does not propose practices that directly address customer satisfaction. We extend the ITVM literature by developing a design theory for customer satisfaction-oriented ITVM. To answer our research question, we have been conducting an action research study at a professional service company. Our work makes a twofold contribution. First, we present generalized design principles (DP) for implementing customer satisfaction-oriented ITVM. Second, we explain why these DPs should be considered by organizations seeking to enhance customer satisfaction and how these DPs should be implemented

Supply Chain Management and Management Science: A Successful Marriage

The last century has witnessed extant studies on the applications of Management Science (MS) to a diverse set of Supply Chain Management (SCM) issues. This paper provides an overview of the contribution of MS within SCM. A framework is developed in this paper with a sampling of MS contributions to major SCM dimensions. Future research directions are presented

Performance Measurement Model for the Supplier Selection Based on AHP

The performance of the supplier is a crucial factor for the success or failure of any company. Rational and effective decision making in terms of the supplier selection process can help the organization to optimize cost and quality functions. The nature of supplier selection processes is generally complex, especially when the company has a large variety of products and vendors. Over the years, several solutions and methods have emerged for addressing the supplier selection problem (SSP). Experience and studies have shown that there is no best way for evaluating and selecting a specific supplier process, but that it varies from one organization to another. The aim of this research is to demonstrate how a multiple attribute decision making approach can be effectively applied for the supplier selection process

Deriving a Research Agenda for the Management of Multisourcing Relationships Based on a Literature Review

There has been considerable development in Information Technology (IT) outsourcing during the last two decades. Nowadays, practitioner-related as well as scholarly literature have identified multisourcing as an emerging key strategy. Multisourcing is described as the blending of services from multiple internal and external vendors. Especially in the case of multisourcing the management of relationships is complex. For a certain field of research it is important to have an overview of the existing literature and a common understanding of basic terms. In this article we identify and analyze the body of knowledge in the area of managing multisourcing relationships. We hence conduct a structured literature review based upon an established literature review framework. It can be observed that the current literature lacks depth in terms of management of multisourcing relationships and that only a few articles cover the aspects of multisourcing in detail. Particularly regarding performance management, governance and knowledge management of multisourcing relationships we propose further research. We subsequently deduce a detailed research agenda for future research options

Multi-object decision making for supplier selection in outsourcing

A supply chain is the system of organizations, people, technology, activities, information, and resources involved in moving a product or service from supplier to customer. The main and basic challenges in the supply chain are to plan a strategy to manage the resources and meet the demands, to select the suppliers that will deliver the goods and services that are required to build the product, to manufacture the product, to deliver the product to the customers and to make an arrangement for return of the products through customers if there is any fault in the product for servicing. This thesis study concentrates on supplier selection problem. Recently, outsourcing has become the prime part of the company. The activities which are not core to the business or not feasible to manufacture in-house are being outsourced to suitable suppliers. The major hurdle in outsourcing is to select a suitable supplier. The right supplier will lead to the fulfillment of the company’s needs and will help increase the financial stability as well as the reputation of the company in the market. The selection of suppliers depends on number of criteria and it is possible that one supplier satisfies some of the selected criteria, a company is looking in to, but not the remaining others and the other supplier may satisfy the other ones but not the first ones. The challenge is to optimize selection process based on critical criteria and select the best supplier(s). The supplier selection problems are multi-objective problems and no single methodology appears to be dominant in solving supplier selection problem. This thesis study has attempted to advance the art of supply chain management by developing a heuristic methodology “Integrated Evolutionary Goal Trade-off (IEGT) Method” which simplifies the task of supplier selection and reduces the tediousness as well as the degree of error by directly involving the Decision Maker into the selection process. The “IEGT” method is highly efficient and it implements the procedure or steps of the Posteriori Articulation method in which after the solutions are presented to the Decision Maker, it incorporates combination of different methods like Evolutionary Algorithm Method, Goal Programming Method and STEM Method to reach the final optimal supplier(s)