A Three-Level Process Framework for Contract-Based Dynamic Service Outsourcing

Service outsourcing is the business paradigm, in which an organization has part of its business process performed by a service provider. In dynamic markets, service providers are selected on the fly during process enactment. The cooperation between the parties is\ud specified in a dynamically made electronic contract. This contract includes a process specification that is tailored towards service matchmaking and crossorganizational process enactment and hence has to conform to specific market and specification standards. Process enactment, however, relies on intraorganizational process specifications that have to comply with the infrastructure available in an organization. In this position paper, we present a three-level process specification framework for dynamic contract-based\ud service outsourcing. This framework relates the two process specification levels through a third, conceptual level. This approached is inspired by the well-known ANSI-SPARC model for data management. We show how the framework can be placed in the context of infrastructures for cross-organizational process support

Selecting Outsourcing Strategies in Single Level Bidirectional Service Supply Chain: A Proposed Approach

The purpose of this paper is to propose an approach for selecting outsourcing strategies in single level bidirectional service supply chain. For this purpose, analytic hierarchy process (AHP) technique has been used for selecting two factors that have maximum influence on service outsourcing decisions. Selected factors have been integrated with quadrant analysis for selecting outsourcing strategies. Two questionnaires have been developed to indicate the importance and correlation of objectives of outsourcing and choosing factors that have influence on service outsourcing decisions in the selected service supply chain of a hospital in Isfahan, Iran. Questionnaires have been fulfilled by senior managers and supervisors the hospital. The results indicate that customer contact and relative capability position in the process have maximum affect on service outsourcing decisions in the selected service supply chain and when relative capability position in the process is high, it is better for the decision makers to keep process internal, i.e. in-sourcing since it provides more competitive advantages.Key words: Outsourcing; Service Supply Chain Management (SSCM); Health care; AHP; Quadrant Analysi

CrossFlow: Cross-Organizational Workflow Management for Service Outsourcing in Dynamic Virtual Enterprises

In this report, we present the approach to cross-organizational workflow management of the CrossFlow project. CrossFlow is a European research project aiming at the support of cross-organizational workflows in dynamic virtual enterprises. The cooperation in these virtual enterprises is based on dynamic service outsourcing specified in electronic contracts. Service enactment is performed by dynamically linking the workflow management infrastructures of the involved organizations. Extended service enactment support is provided in the form of cross-organizational transaction management and process control, advanced quality of service monitoring, and support for high-level flexibility in service enactment. CrossFlow technology is realized on top of a commercial workflow management platform and applied in two real-world scenarios in the contexts of a logistics and an insurance company

Developing Dynamic Outsourcing - Bringing continuous added value to the ABB Full Service partnership

Executive summary This master thesis was originally based on a specific assignment given to the authors from ABB Full Service, a unit specializing in providing maintenance outsourcing: “How can ABB Full Service expand its offering of providing fundamental maintenance by seamlessly incorporating the business concept with competencies and solutions from other ABB divisions?” The academic issue was developed throughout the thesis, resulting in the following formulation: “From an organizational perspective; how can service providers bring continuous added value to intra-organizational outsourcing partnerships?” Many of the key findings of this thesis are reflected in the issue. The term intra-organizational outsourcing is a proposed addition to the terminology in the academic discourse on outsourcing. The definition of the term is: • Where an organization outsources a business process interlinked with the physical operations, requiring the service provider to take over a preexisting unit and its employees. This is an accurate description of the form of outsourcing that ABB Full Service is engaged in. The authors note that this kind of outsourcing relationship is not sufficiently described in the current theoretical landscape, justifying the addition and definition of a new term. A subset of intra-organizational outsourcing is also added; dynamic outsourcing. This term that is central to this thesis. It describes what ABB Full Service should aim for in their client partnerships. Dynamic outsourcing is defined as: - Where the service provider provides a continuous stream of extended services by incorporating resources and solutions from a broad array of expertise areas through the intra-organizational outsourcing partnership, ensuring a permanent value differential thus eliminating the risk of backsourcing. Insights and propositions in the thesis concern how to achieve dynamic outsourcing. Solutions are provided through two main themes; competence development and nurturingthe client relationship. Competence development for achieving dynamic outsourcing Service providers that work with intra-organizational outsourcing must be prepared to handle the cultural integration of the transferred personnel into the service organization. Properly handled, fast benefits can be achieved but it is also important to realize that the complete integrating process takes both time and effort. For an organization to achieve dynamic outsourcing, focus on the management of the organization’s knowledge and competencies is imperative. Expertise and experience needs to be developed and transferred between personnel and units within the organization, and knowledge must also be injected from external sources. By working with these aspects of the organization, service providers can improve the quality and cost effectiveness of their offering and maintain a necessary value differential to show clients the benefits of remaining in the partnership. A key insight is that educational initiatives aimed at relationship building, communication, trust, commitment, and shared benefits is more important than technical competence development in achieving a higher level of service quality. All hierarchical levels of the organization must be involved in these processes, laterally as well as vertically. Vertical learning initiatives are knowledge sharing between different hierarchical levels. These initiatives are mainly targeted at down-streams benefits, where more experienced and competent staff shares insights with personnel on a lower hierarchical level. However it is noteworthy that important information is relayed upwards in the hierarchy as well through such initiatives; this can be information such as improvement suggestions and identification of potential problem areas. Lateral learning initiatives should be formed between different client sites, exchanging knowledge between staff on all levels, from site manageme

CrossFlow: Cross-Organizational Workflow Management in Dynamic Virtual Enterprises

In this report, we present the approach to cross-organizational workflow\ud management of the CrossFlow project. CrossFlow is a European research\ud project aiming at the support of cross-organizational workflows in dynamic\ud virtual enterprises. The cooperation in these virtual enterprises is based on\ud dynamic service outsourcing specified in electronic contracts. Service enactment\ud is performed by dynamically linking the workflow management infrastructures\ud of the involved organizations. Extended service enactment support is provided in the form of cross-organizational transaction management and process control, advanced quality of service monitoring, and support for high-level flexibility in service enactment. CrossFlow technology is realized on top of a commercial workflow management platform and applied in two real-world scenarios in the contexts of a logistics and an insurance company

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

The impact of business process outsourcing on firm performance and the influence of governance : a long term study in the German banking industry

Does BPO pay off at the firm-level? Although there are several studies which analyze the potential benefits of BPO, there is a virtual absence of research papers on BPO outcomes. Based on an analysis of 137 Business process outsourcing (BPO) ventures at 254 German banks in a period between 1994 and 2005, we found that the outsourcer's financial performance in terms of profitability and cost efficiency was increased significantly compared to industry peers without BPO. The increase stems not from workforce reductions but rather from increased employee productivity. Further, we show how BPO governance ensures BPO success: individually negotiated outsourcing contracts help to improve cost efficiency and profitability measures. Relational governance based on trust has only positive effects on profitability. Keywords: Business Process Outsourcing, firm performance, firm characteristics, banking, German banks, governance JEL Classifications: G21, L14, L21, L2

IT Outsourcing Adoption by Small and Medium Enterprises: A Diffusion of Innovation Approach

The study investigates factors contributing to the adoption of IT services outsourcing (ITO) by small and medium enterprises (SMEs) in western countries. The focus is on the process of diffusion and adoption of ITO as a management innovation. The paper is written from the perspective of ITO vendors from developing countries and seeks to identify steps that will help these vendors sell ITO services to SMEs in first world countries. The model is motivated by two research streams: diffusion of innovation theory and institutional theory. The model posits that vendors should exploit the fit among three factors (as it is this fit that determines the adoption rate of ITO services): (1) innovation profile, including features such as relative advantage and complexity of service offered; (2) innovator profile, including features such as prestige level of the firm, educational level, and firm size; and (3) field-level characteristics such as intensity of competition, density of inter-firm connections, service professionalization, knowledge codification in the field, and effort level by intermediaries in promoting legitimacy of ITO

Web Services Support for Dynamic Business Process Outsourcing

Outsourcing of business processes is crucial for organizations to be effective, efficient and flexible. To meet fast-changing market conditions, dynamic outsourcing is required, in which business relationships are established and enacted on-the-fly in an adaptive, fine-grained way unrestricted by geographic distance. This requires automated means for both the establishment of outsourcing relationships and for the enactment of services performed in these relationships over electronic channels. Due to wide industry support and the underlying model of loose coupling of services, Web services increasingly become the mechanism of choice to connect organizations across organizational boundaries. This paper analyzes to which extent Web services support the dynamic process outsourcing paradigm. We discuss contract -based dynamic business process outsourcing to define requirements and then introduce the Web services framework. Based on this, we investigate the match between the two. We observe that the Web services framework requires further support for cross - organizational business processes and mechanisms for contracting, QoS management and process-based transaction support and suggest ways to fill those gaps