The Role of Client-internal Social Linkages for Outsourcing Success – An SNA Approach

What is the role of a firm’s internal social relations between business departments and IT unit for the success of its IT outsourcing relationship? In this paper, we propose that the relationship between business and IT of a firm is crucial for achieving effective outsourcing management and for enabling the vendor to deliver the services as demanded. Since the business side of the client firm represents the users of the information systems but the IT unit represents the interface to the outsourcing vendor firm, interaction between both units is proposed to be required for maintaining a good outsourcing relationship. Based on a survey in the German Banking Industry and by adopting a Social Network Analysis Approach which captures the interaction structure within the client firm and thus represents an innovative scale to outsourcing research, we show that tight social linkages within the client firm lead to higher service quality achieved by the vendor firm

Outsourcing of Information Systems as a Strategy for Organizational Alignment and Transformation

Outsourcing of services is usually viewed as a way to increase or decrease capacity at the margin. By outsourcing a firm can vary its ability to provide goods or services such as information technology (IT) processing capacity or applications development, without taking on the long term commitment of permanent staff or equipment Today, outsourcing provides new options for managers to provide information technology infrastructures and services to a firm. In this paper we identify ways in which outsourcing may be used tactically to better align business and information technology strategies. Specifically, we consider how selective outsourcing enables alignment of incentives, business revenues and IT infrastructure costs, and how organizational intent can be made more consistent with a firm' s capabilities. We propose that outsourcing as an information systems management strategy can enable better control and lower agency costs as managers benefit from better information through external benchmarking. We also consider the role of outsourcing as a vehicle to support major organizational transformation, and as a device for enabling new models of organization. Based on our analysis we propose a series of testable propositions about outsourcing. The contributions of this paper include extension of business strategy and information technology alignment concepts to incorporate the interdependence between projects, product life cycles, and technology transfer. Most importantly, the paper highlights new directions for outsourcing research, focusing on the effects of outsourcing on the IT organization, the processes of internal technology development and the transfer of technologies between organizations.Information Systems Working Papers Serie

Success factors of selective information technology outsourcing in enterprise resource planning projects in Israel

IT Outsourcing (contracting-out of Information Technology services) has become a pivotal economic trend in recent decades. This study traces the interlacing of IT Outsourcing with Enterprise Resource Planning (ERP) software systems. Little research has considered the reciprocal relations between these two phenomena. This was the gap in knowledge addressed by the research. More specifically, the research investigated: why organisations turn to IT Outsourcing providers to implement and maintain ERP systems and what are the success factors for selective IT Outsourcing within ERP projects in Israel. Field research was conducted in organisations during 2006-2008, employing IT Outsourcing for ERP systems in two stages: Stage One used qualitative data-collection tools: five semi-structured interviews and fifteen open-ended questionnaires. Inductive content and thematic analysis conducted on data from these tools produced themes that formed the basis for a closed-ended questionnaire used in the next stage. Stage Two employed seventy two closed-ended questionnaires. Quantitative data from this questionnaire underwent deductive statistical analysis to test and confirm findings from Stage One. Results indicated that significant differences between ERP package-based centralised cross-organisational systems and the out-dated self-developed legacy IT systems produced different organisational requirements for IT Outsourcing services. Respondents thought it essential to employ IT Outsourcing for ERP projects, noting different motivations for this strategy. Respondents identified four success factor groups for IT Outsourcing in ERP projects, grading the factors according to relative importance. Management commitment and support was the most important success factor group. The research showed that organisations that implement ERP systems regard it as essential to employ the IT Outsourcing services since they provide experienced updated experts. Organisations stress that they need these services to ensure effective, operable systems, understanding that initially there is little cost reduction. Management commitment, wise choice of vendors and intelligent contracting can establish successful vendor-organisation collaboration. Contribution to knowledge is made by offering a better understanding of the unique phenomenon of IT Outsourcing within ERP projects in Israel, motivations to use and success factorsEThOS - Electronic Theses Online ServiceGBUnited Kingdo

Exploring The Balance Between Trust And Formal Controls In Information Systems Outsourcing Relationships

Trust and formal controls are critical in contemporary information systems outsourcing arrangements. Trust has been recognized as the relationship facilitator, while formal controls have been treated as the governance mechanism. Achieving a balance between trust and formal controls has received much attention in the literature as it leads to better management of inter-organisational relationships and performance results. Although existing research on the balance offers interesting insights, it is largely descriptive and does not establish a sound conceptual base. In contrast, the current studies that investigate the interaction of trust and formal controls have been based on contradictory conceptualisations and conflicting research outcomes, leading to controversial and exhausting debate about trust and formal controls being complements and/or substitutes. In this study, we investigate the dynamics of trust-controls nexus in IS outsourcing arrangements and build a conceptual framework that captures various interplays between trust and formal controls. We argue that different types of balance (antithetical, orthogonal and synergistic) and outsourcing outcomes can mutually influence each other. Based on our framework, we explore the synergistic balance in twocase studies and reveal the existence of dynamic patterns of interaction between trust-controls nexus and outcomes, and the changes in the achieved balance. The study provides a new way to explore the balance as the outcome of dynamic interactions between trust and formal controls and its link to the outcomes in IS outsourcing

Analysis of Outsourcing System and Work Motivation on Employee Performance

Background - Currently, many companies are implementing outsourcing systems for their company's HR management. Outsourcing is a company that uses human resources from other parties (external) to carry out work activities that are usually handled by internal staff and resources. The problem that exists is because the outsourcing system affects the performance of employees at a food ingredients factory in Cilegon, where there are still high complaints from clients regarding the decline in the performance of forklift operator employees placed in their company. This shows the inaccuracy at work leads to a lack of employee motivation. Employee motivation problems can be the cause of low employee performance in a company. Purpose - The objectives of this study are (1) to determine the effect of the outsourcing system on employee performance and (2) to see the effect of work motivation on employee performance. Originality/Value - This study tested 2 hypotheses with data sources originating from respondents of outsourcing employees of PT. AMP, a division of forklift operators at the Cilegon grocery factory, analyzed the influence of the outsourcing system and work motivation on employee performance in the company. Research Limitations - information, primary and secondary data in this study were only obtained from PT. AMP Design/methodology/approach - The population and sample of this study were all outsourced employees of PT. The AMP division of forklift operators placed 30 people in a food ingredients factory in Cilegon. This study uses a quantitative approach method. The data collection technique used primary data in the form of a questionnaire. The data analysis technique of this research used the Structural Equation Modeling-Partial Least Square (SEM-PLS) method. Findings - Based on the results of the direct influence hypothesis research, it is known that the outsourcing system has a positive and significant effect on employee performance. And motivation has no significant effect on employee performanc

The role of organisational change management in offshore outsourcing of information technology services : qualitative case studies from a multinational pharmaceutical company

This research study seeks to understand the nature of organisational change with respect to offshore outsourcing of information technology services in a multinational pharmaceutical company, and to examine the effectiveness of approaches used to manage this change so that lessons may be drawn from these experiences. Despite the abundant literature on effective organisational change management, the key factors that need to be managed properly at different stages of the offshore outsourcing process are not well understood. The research adopts a processual view to paint a broad picture of the issues involved in these different stages. A generic process model of change, based on the review of the change literature, was first developed to represent how change was intended to occur. This model focuses on the following four stages in the change process: context, diagnosis and planning, implementation, and institutionalisation. The research employs an interpretive case study approach and draws on fieldwork from three independent information systems departments (cases) of the company, where offshore outsourcing programmes were implemented. Qualitative data from semi- structured interviews, direct observation and document analysis are analysed by applying the generic process model to produce a detailed account of the way in which change was managed in the case organisations. The findings reveal that a combination of contextual factors, both external and internal to the company, influenced the adoption and use of offshore outsourcing in the case organisations. Externally, the economic forces were found to be the main catalyst for the change, while internally the role of the executive leadership and the lack of internal resources further explain the motivations behind the adoption of offshore outsourcing. The study illustrates that achieving successful outcomes from offshore outsourcing activities critically depends on the organisation adequately addressing a number of factors, such as conveying a sense of urgency, developing and communicating the vision, identifying the benefits of change and how they will be delivered, generating short-term wins, providing education and training, developing a fit between the change and organisational culture, etc., throughout the change process. The findings also highlight the effects of offshore outsourcing on the case organisations, including change in job roles and responsibilities and organisational learning activities that enable corrective actions to improve change management efforts. An important contribution of this research is the development of a model providing a more comprehensive understanding of the change process associated with the implementation of offshore IT outsourcing. Recommendations for policy makers and change managers to improve change management practice based on the research findings, as well as recommendations for further research, form a significant part of the conclusions

Pengaruh sistem pengendalian internal, sistem informasi akuntansi dan pemanfaatan teknologi informasi terhadap akuntabilitas pengelolaan dana kelurahan di Kecamatan Gubeng Kota Surabaya

ICW data states that village heads are quite often entangled in corruption crimes, in 2016to 2017 there were 110 village heads and in 2018 there were 102 suspects. As for the internal problems of the Gubeng District, Surabaya City, namely the lack of performanceaccountability caused by lack of knowledge of the sub-district government in using accounting information systems. As a result, the sub-district government relies too muchon outsourcing in the use of its accounting information system. This study aims to obtainempirical evidence of the effect of internal control systems, accounting information systems, and the use of information technology on the accountability of village fund management. The objects in this study are 6 (six) Kelurahan in Gubeng Subdistrict, Surabaya City with several employees who can be used as respondents as many as 30 employees. The analysis technique for this research uses a smart Partial Least Square (PLS) 3.0 tool. Based on data analysis, it was found that the internal control system andaccounting information system had a statistically positive and significant effect on the accountability of village fund management, while the use of information technology hadno statistically significant effect on the accountability of village fund management

Information Systems Outsourcing Adoption

Dissertação apresentada como requisito parcial para obtenção do grau de Mestre em Estatística e Gestão de InformaçãoInformation systems outsourcing (ISO) is the management of information systems operations performed by an external organization. It has an enormous potential and capability to improve business processes and technological innovations for companies. However, the adoption rates of ISO are still lower than expected. It is therefore desirable to make more efforts to identify determinants of ISO adoption. Based on the combination of a technology-organization-environment (TOE) framework and diffusion of innovation (DOI) theory, we develop a conceptual model to study the determinants of the ISO adoption. Data collected from 261 firms in Portugal were used to test the proposed research model. Based on logistic regression we find five contextual factors (relative advantage, firm size, top management support, perceived benefits, and competitive pressure) to be determinants of ISO adoption. Among them, perceived benefits was found to be the most significant driver, followed by competitive pressure. Overall, these results indicate that the adoption of ISO is affected mainly by the organizational context, compared to the remaining contexts proposed (technology, environment, and individual leader characteristics). These findings are particularly useful for managers, suppliers, and academics, since they provide important insights when focusing mostly on the organizational field

An analysis of the restrictions on the competitive readiness of Australian businesses due to their lack of formal quality management systems

Small to medium sized enterprises (SME) employ 95% of the Australian workforce. Most of the organisations, employing most of the workforce, do not have any formal quality management systems. As such, Australian businesses, particularly SME’s, have remained somewhat isolated in terms of operational and competitive readiness compared to their peers in other countries. Based on research conducted in 2010, using a series of structured focus groups of logistics and supply chain professionals from a diverse spectrum of industries across a pan-Australian base, it has been determined that over 85% of the participants in the focus groups had no formal quality management systems within their own organisations or indeed within their immediate supply networks. Interestingly, most of the participants of the focus groups indicated that they thought formal quality systems would have a limiting factor on their operations. Further investigation into organisations who were outsourcing products and services from Australian companies indicated that, post the Global Financial Crisis, there has typically been a change in policy, and most organisations are now precluding once qualified local suppliers because of their lack of formal quality systems. This decision is typically based around issues such as risk mitigation and further moves into more comprehensive corporate social responsibility. This paper discusses this recent research and the implications of the widening gap in Australian supply and demand based on the lack of formal quality systems in a significant percentage of the supply base