Global IT Outsourcing Management: Key Influence Factors and Strategies

The key focus of this article is to provide an understanding about the complexities involved in global IT outsourcing and the management initiatives needed for the successful implementation of a global IT outsourcing partnership. Technological advances combined with increased globalization and competitive pressures have forced many firms to consider alternatives that will reduce organizational cost, and at the same time create and/or maintain their competitive advantage in the global market. Increasingly, the phenomenon of global outsourcing is being considered by many firms as a solution to their IT needs and problems. With increasing recognition and confidence in the programming competencies of IT workers in India and other countries, offshore outsourcing has gained increasing acceptance among U.S firms across all industries.Even though there has been a plethora of studies on domestic outsourcing of information systems, the research on outsourcing outside national borders (global outsourcing) has been scarce. One of the areas which lacks depth in the literature is in how to manage a global outsourcing partnership. Anecdotal evidence points to the fact that even the best outsourcing deals can go sour if not managed properly. In the context of global IT outsourcing, the management of the outsourcing relationship becomes even more complex because of the geographical distance and the difference in the national and organizational cultures of the client and vendor firms. This article identifies the key elements that should be considered while managing an outsourcing relationship with a foreign’ vendor and the role the manager should play in a global outsourcing context

Supply Chains and Porous Boundaries: The Disaggregation of Legal Services

The economic downturn has had significant effects on law firms, and is causing many of them to rethink some basic assumptions about how they operate. In important respects, however, the downturn has simply intensified the effects of some deeper trends that preceded it, which are likely to continue after any recovery that may occur. This paper explores one of these trends, which is corporate client insistence that law firms “disaggregate” their services into discrete tasks that can be delegated to the least costly providers who can perform them. With advances in communications technology, there is increasing likelihood that some of these persons may be located outside the formal boundaries of the firm. This means that law firms may need increasingly to confront the make or buy decision that their corporate clients have regularly confronted for some time. The potential for vertical disintegration is a relatively recent development for legal services, but is well-established in other sectors of the global economy. Empirical work in several disciplines has identified a number of issues that arise for organizations as the make or buy decision becomes a potentially more salient feature of their operations. Much of this work has focused in particular on the implications of relying on outsourcing as an integral part of the production process. This paper discusses research on: (1) the challenges of ensuring that work performed outside the firm is fully integrated into the production process; (2) coordinating projects for which networks of organizations are responsible; (3) managing the transfer of knowledge inside and outside of firms that are participants in a supply chain; and (4) addressing the impact of using contingent workers on an organization’s workforce, structure, and culture. A review of this research suggests considerations that law firms will need to assess if they begin significantly to extend the process of providing services beyond their formal boundaries. Discussing the research also is intended to introduce concepts that may become increasingly relevant to law firms, but which currently are not commonly used to analyze their operations. Considering how these concepts are applicable to law firms may prompt us to rethink how to conceptualize these firms and what they do. This paper therefore is a preliminary attempt to explore: (1) the extent to which law firms may come to resemble the vertically disintegrated organizations that populate many other economic sectors and (2) the potential implications of this trend for the provision of legal services,the trajectory of legal careers, and lawyers’ sense of themselves as members of a distinct profession

FM contract relationships: from mobilisation to sustainable partnership

Purpose / theory Outsourcing is a fundamental business model for the Facilities Management (FM) industry. To enable sustained mutual success the parties involved must seek to understand the unique, socially constructed, and often highly complex situational realities of the organisational ecologies they are engaged in. The FM industry can unlock improved performance and strategic credibility through an appreciation of the need for different conversations. Design / methodology / approach Findings from two recent cases are considered. Data from two different client-contractor relationship situations was collected utilising a critical ethnographic research methodology; a phenomenological paradigm that acknowledges knowledge as socially constructed through language. A variant on Scott-Morgan‟s unwritten-rules coding method was used to analyse the data and justify the prevalent themes and issues presented. Findings Findings include the role of perceptions and assertions in the construction of social realities, change management implications, and how these impact on the traditional view of the client/contractor relationship. Ethnographic findings are typically context specific, therefore generalisations must be carefully considered. The key findings are however substantiated by existing FM outsourcing literature. Originality / value Highlights the practical importance of seeking to understand socially embedded realities for improved FM contract performance. Considers the human resource element of change via FM outsourcing. Takes a social constructivist approach to organisational sense-making. Uses examples from focused, critical ethnographies to explore existing FM contracting dynamics. Qualitative investigations into related organisational circumstances are encouraged to further develop an evidence base

A2THOS: Availability Analysis and Optimisation in SLAs

IT service availability is at the core of customer satisfaction and business success for today’s organisations. Many medium-large size organisations outsource part of their IT services to external providers, with Service Level Agreements describing the agreed availability of outsourced service components. Availability management of partially outsourced IT services is a non trivial task since classic approaches for calculating availability are not applicable, and IT managers can only rely on their expertise to fulfil it. This often leads to the adoption of non optimal solutions. In this paper we present A2THOS, a framework to calculate the availability of partially outsourced IT services in the presence of SLAs and to achieve a cost-optimal choice of availability levels for outsourced IT components while guaranteeing a target availability level for the service

Options for Human Capital Acquisition

An \u27options\u27 view of human capital acquisition explains value creation through timedeferred, sequential, path-dependent investment choices and addresses gaps in the resourcebased theory explanation of the relationship between human resources and competitive advantage. Firms will invest in options for human capital, using alternative employment arrangements like temporary/contractual/part-time workers and internships, or by outsourcing the work, when uncertainty associated with human capital is high and investments in human capital are largely irreversible. We discuss various options for skills and employees, two interrelated components of human capital. These are flexibility options, options to wait or defer, options to abandon, learning options, and switching options. The opportunity cost of not having options is quantifiable, which makes the real options approach valuable for strategic HRM decisions

Information systems offshore outsourcing: a descriptive analysis

Purpose - The present paper has as its aim to deepen in the study of Information Systems Offshore Outsourcing, proposing three essential steps to make this decision: weighing up the advantages and risks of Offshore Outsourcing; analysing the taxonomy of this phenomenon; and determining its current geography. Design/Methodology/Approach - With that objective in mind, it was decided to base the research work on the literature about this topic and the review of reports and statistics coming from different sources (consultants, the press, public institutions, etc.). Findings - Offshore Outsourcing has grown vertiginously in recent years. Its advantages exceed even those of onshore outsourcing, though it also involves greater risks derived from the (cultural and physical) distance existing between customer and provider. Various types of services and customer-provider relationships hide under the umbrella of Offshore Outsourcing; i.e. it is not a homogeneous phenomenon. The main Offshore Outsourcing customers can be found in the USA and Europe, mainly in the UK but also in other countries such as Germany and France. As for provider firms, most of them are located in Asia −outstandingly in India but also in China and Russia. At present, there are important providers scattered in other continents as well. Originality/Value - The conclusions suggest that the range of potential Offshore Outsourcing destinations must be widened and that the search for a provider cannot be based exclusively on cost savings; other considerations such as quality, security and proximity of the provider must also be taken into consideration. That is precisely the reason why the study of new countries like Spain as Offshore Outsourcing destinations is proposed

Outsourcing and financial performance: A negative curvilinear effect

This study asks how a firm's degree of outsourcing across all activities influences financial performance. We argue there is an optimal degree of outsourcing, where firms outsource some activities yet integrate others, and that deviations lower performance in a negatively curvilinear fashion. We find empirical support, using 1995 and 1998 data on a sample of manufacturing businesses in the Netherlands, and show that the steepness of the curve increases under conditions of high uncertainty. We show the magnitude of the uncertainty effect on performance outcomes through a post hoc scenario analysis. Thus we provide a specific, theoretically and empirically grounded prediction of how outsourcing affects performance with implications for theory and practice