Outsourcing the Business Services

The nowadays international market of outsourcing services is relatively mature and with age comes wisdom ... Thus, on a grown market, choosing to outsource services can not only be justified by the strive to reduce costs but it aims to meeting more advanced objectives as accurate alignment with business strategies of the enterprise. As a result, outsourcing has reached new forms of expression that can help the enterprises to gain competitive advantage. In the context of a grown market, a new concept appears, namely the multisourcing which it refers to the outsourcing model of the future [1] that businesses must prepare to accept and use. This concept or model of the future refers to working with several suppliers, which are competitors in a spirit of trust and teamwork, in a collaborative process to maximize the benefits associated with outsourcing process.Business Outsourcing, Audit, Economic and Financial Analysis, Information Technology Outsourcing

A Survey and Analysis of Outsourcing in East China

The aim of this study is to investigate whether outsourcing activities in east china are associated with a theoretical framework derived from the literature. By the methodology of Statistics Package for the Social Science (SPSS), the results of survey indicate that outsourcing will more extensively practiced in the future, the principal outsourcing motivation are to reduce costs and focus on core businesses. The purchasing outsourcing has the largest correlation coefficients with short-term contract, the total outsourcing has a significant correlation coefficient with long-term contract at the level of =0.05. The findings indicate that high service quality and mutual trust are the main criteria for selecting outsourcing vendors. However, it is found that outsourcing satisfaction is generally low. The main benefits of outsourcing are to reduce cost, concentrate on core businesses and improve the service quality, while the main problems with outsourcing are legal disputes, disclosure of commercial secrets and conflicts with vendors.Outsourcing; strategy; contract; survey

Offshore outsourcing - A global shift in the present IT industry

The paper analyses the offshore outsourcing of IT services (OOIT), which have become increasingly important for the global IT industry. Through this rapid process of firm relocation, a new terminology has emerged, which forms the starting point for our paper. We compare wage cost differentials of IT workers in key offshore locations like India to those in the US and Europe, incorporating the hidden costs of offshoring - including long-term risks and opportunities - in order to determine the total cost of offshore outsourcing activities. The debate on the potential future negative employment impacts in the major OECD countries recently became a point of political contention in the US presidential election campaign, reflecting widespread fears in the US and elsewhere that outsourcing will lead to decreased income and job loss. In Europe, policy makers are searching for instruments to guide these developments so that major social disruptions do not lead to disproportionately negative welfare impacts in the short term. The future costs and benefits of outsourcing can currently be assessed only in broad terms due to the lack of adequate data and representative statistics. However, the theory of comparative advantages suggests that overall, offshoring and inshoring countries will gain from the new international division of labour in the long run. --offshore outsourcing of IT,international factor movements and labour markets,international business,multinational firms

Offshore Outsourcing and Organizational Learning: A Model of Cultural Occlusions

Offshore outsourcing of information technology services is a recent global trend. Organizations may not have considered the impact of outsourcing on their learning capabilities for future competitive competencies. The impact on learning may depend on the national cultures of the client organization and of the offshore outsourcing vendor. A conceptual model of cultural occlusions to organizational learning in IT outsourcing relationships is developed in this paper. Suggested solutions include employing boundary spanners to mitigate of any unfavourable impacts. The cultural occlusions model may inform IT practitioners in an offshore outsourcing relationship, and the IT industry strategy of developing countries offering offshore outsourcing services

International Outsourcing Hurdles in Value-added Services

Purpose: International Outsourcing has been traditionally looked upon as a low end cost effective servicing option to take advantage of the cost arbitrage that exists across countries. Of late, many outsourcing vendors have realized that the advantages of cost differentials that spurred a lot of the global outsourcing business in the past 20 years will disappear in the medium term. This paper provides a perspective about how much value addition, besides cost, traditional outsourcing vendors can provide and what may be the facilitator/ inhibitors of such activities. Approach: To substantiate the claim, a brief case describing the setting up of an offshore analytics operation is presented which gives a back drop to the challenges faced in relatively high end value creation processes in a remote outsourced environment. Findings/Claim: The author uses the case to develop a conceptual model of off shoring value –added services. The key dimensions that will determine the extent to which international outsourcing of high end services will take place are: 1) Expertise of the vendor, 2) Environmental Stability of the Outsourcing Domain, 3) Physical Barriers to outsourcing complex business processes such as, Communication Problems and Proximity issues, 4) Possibility of Knowledge Leakage from Outsourcing Domain and, 5) Cost Benefits of Outsourcing. Practical Implications: The author contends that conventional outsourcing vendors may find it difficult to acquire “Expert Power” and, set aside negative perceptions of “Environmental Stability” of their domain, in the pursuit to climb up the value chain in their client organizations. The validation of the proposed model is an opportunity for future research. Originality: This paper is one of the first to present a model that will govern the growth of international outsourcing opportunities in high end value-added processes.

Influence Factors and Control in International IT Outsourcing Management: A Contingency Perspective

Rapid advances in technology and increased globalization and competitive pressures have forced many firms to search for alternatives that will reduce organizational cost, and at the same time create and/or maintain their competitive advantage in the global market. In this respect, many firms are turning to global outsourcing as a means of leveraging information technology (IT) for competitive advantage without having to worry about factors like technological obsolescence and skyrocketing IT expenditures. Of course, jumping onto an outsourcing deal without prior analysis of the situation and the vendor could make the organization worse off than before. Recent studies and anecdotal evidence point to the fact that even though a ‘watertight’ contract can absolve the client from many would be problems, the success and outcome of the outsourcing partnership ultimately depends on the management of the relationship. The management of the outsourcing contract becomes more complicated in cases where the vendor is based in a foreign country (International Outsourcing). The focus of this article is to present a contingency perspective of global IT outsourcing management (vis-a-vis control mechanisms) under various scenarios of the outsourcing context. Additionally, this study identifies a number of future research areas and proposes a direction for future research in the area of global IT outsourcing management

Achieving Value Co-creation in IT Outsourcing

Over the past few decades, information technology outsourcing has become a widely used and researched means for enterprises to enhance their performance. As future collaboration is the most desirable outcome between enterprises and IT outsourcing vendors, the purpose of this study is to construct a new model to examine: 1) whether information technology outsourcing satisfaction impact future collaboration, 2) whether value co-creation impact outsourcing satisfaction, 3)which factors influence value co-creation, and 4) whether trust influence enterprises’ commitments. This research assumes that: 1) trust predicts enterprises’ commitments; 2) customer orientation and participation, service quality, communication culture, and enterprises’ commitment predicts value co-creation; 3) value co-creation predicts information technology outsourcing satisfaction, 4) information technology outsourcing satisfaction predicts future collaboration. This model will allow enterprises and information technology outsourcing vendors to identify factors that can increase the chances for future collaboration. To achieve this goal, this research applied structural equation modelling, using Smart Partial Least Square (SmartPLS) software, as a method to empirically validate the model through a survey analysis containing 213 CEO or senior managers’ opinions obtained through valid measurements. The actual sampling yielded 207 useful questionnaires with a valid response rate of 97%. The results of this article show that trust strongly positively influences normative commitment, continuance commitment, and affective commitment; seven factors of customer behaviours and beliefs (such as: customer orientation and participation, service quality, communication culture, normative commitment, continuance commitment, and affective commitment) positively influence value co-creation; value co-creation strongly positively influences information technology outsourcing satisfaction; and information technology outsourcing satisfaction strongly positively affects future collaboration. The implications of this study and future work are also presented

Outsourcing: More Harm than Good

Outsourcing is a highly effective strategy, widely used in various types of business to gain a competitive edge. The tremendous growth of outsourcing first started in the manufacturing and information technology industries. It has also spread into the accounting industry as well. However, in accounting the major problems and benefits caused by outsourcing are different from those identified in the manufacturing and IT industries. This leads to the question of whether or not outsourcing in accounting would create more advantages than disadvantages. This paper analyzes the question through four steps: (1) how accounting outsourcing is done, (2) which accounting tasks (both private and public) are fit for outsourcing, (3) what are the benefits and challenges of accounting outsourcing, and (4) what are the effects that outsourcing, including accounting outsourcing, have on the U.S economy. The author argues that accounting outsourcing generates more risks and harmful effects than benefits for companies and their stakeholders. Therefore, accounting outsourcing should be discouraged. This research provides a comprehensive view on the topic of outsourcing in accounting, including rewards and problems caused by accounting outsourcing, effects of outsourcing on business stakeholders, effects of outsourcing on the U.S economy, and future outsourcing trends and regulations

Back to normal? The future of global production networks.

It is neither likely nor desirable for central banks to exit from unconventional monetary policies in the near future. However, it is important that central banks develop an exit strategy, evaluate the merits of new and old monetary policy tools and communicate with the public so as to maintain financial stability, support economic growth and minimize future inflationary risks. Central bank communication policy will turn out to be crucial and more challenging than it was before the crisis.Wertschöpfung; Outsourcing; Business Network; Offshoring; Globalisierung; Wirtschaftskrise;

A Research Framework for the Impact of Cultural Differences on IT Outsourcing

Contracting Global Virtual Teams as part of global IT outsourcing is currently en vogue. As might be expected when virtual team members are from different countries, cultural factors play an important role in the success of outsourcing. However, there have been very few studies that assess the effect of culture on IT outsourcing and virtual teams. This conceptual paper addresses this oversight by looking at the effect of cultural differences on IT outsourcing and virtual teams\u27 performance. The applicable literature on outsourcing, virtual teams and culture is analyzed and a framework of offshore outsourcing success is developed. This framework includes the concept of psychic distance to better understand the phenomenon of virtual teams and outsourcing success. Adding this as a key research component provides a more realistic way of researching global virtual teams. Future directions for research based on the developed framework are also provided. By assessing the cultural differences of virtual teams in IT outsourcing, our research framework will help academics pursue this growing business phenomenon