A STUDY OF INFORMATION TECHNOLOGY OUTSOURCING

IT outsourcing is the practice of contracting out the running of a part of an organization computer department. It is not a new phenomenon, but the scale and scope of its occurrence has greatly increased over the last decade. Due to the fact that IT outsourcing has no obviously and quantifiable benefits, most of the business entities choose not to do outsource their IT. The paper is based on the idea of incapability of exact determination of IT services costs. The purpose of this research regards the layout of the current approaches to outsourcing, description of different types of IT outsourcing and their advantages and the analysis of some models which might be used in order to facilitate the IT decision making process.IT Outsourcing, IT Services, Outsourcing costs

Competitive Moves Over Time: The Case of SAP

This paper applies the Red Queen theory to explain how organizations utilize various sourcing arrangements in order to compete in an evolutionary arms race where only the strongest competitors will survive. This case study incorporates competition and views sourcing strategies as a means to improve its viability to survive in the marketplace. The study begins with a review of sourcing literature to position the Red Queen theory within the sourcing literature. It subsequently applies the framework to a case study of SAP AG to illustrate how sourcing strategies changed over time in response to the logic of competition. The case study reveals that (a) organizations are adaptive systems and capable of organizational learning to make strategic changes pertaining to sourcing arrangements; (b) organizations select the terms in which they want to compete by developing certain capabilities within the firm; (c) organizations are reflexive and over time develop competitive hysteresis which allows them to become stronger competitors. In the case of SAP AG, various sourcing arrangements were selected over its 40-year history to respond to technological and market changes

Sourcing strategies to keep up with competition: the case of SAP

This paper applies the Red Queen theory to explain how organizations utilize various sourcing arrangements in order to compete in an evolutionary arms race where only the strongest competitors will survive. The case study incorporates competition, and views sourcing strategies as a means to improve the firm’s viability to survive competition in the marketplace. The study begins by positioning the Red Queen theory within the sourcing literature. It subsequently applies the framework to a case study of SAP AG to illustrate how sourcing strategies have changed over time in response to the logic of competition. The case study reveals that (a) organizations are adaptive systems and capable of learning to make strategic changes pertaining to sourcing arrangements; (b) organizations select the terms on which they want to compete by developing certain capabilities within the firm; (c) organizations are reflexive and over time develop competitive hysteresis which allows them to become stronger competitors. In the case of SAP AG, various sourcing arrangements were selected over its 40-year history to respond to technological and market changes

A phenomenological study of the impact of knowledge intensity and environmental velocity on in source or hosted contact centres.

Contact centres exist in order to focus the final step of the intra organisational value chain which then delivers optimalcustomer satisfaction. In this paper we analyse a centre with a view to investigating the impact of outsourcing or the inhouselocus of provision. Such centres exhibit agency/principal characteristics, bringing knowledge management into sharp focus, aspects of information intensity which impact on the organisational dynamics, and the learning of the employees. A phenomenological approach to determine the essence of the activities was deployed rather than a methodological initiative based post positivistic strategic analysis. The characteristics of contact centres investigated coalesce into two distinct categories; a framework to depict this is presented

Testing The Moderated And Mediated Impact Of Human Asset Specificity On The Sourcing Of Application Software Services

The question concerning the circumstances under which it is advantageous for a company to outsource certain information systems functions has been a controversial issue for the last decade. While opponents emphasize the risks of outsourcing based on the loss of strategic potentials and increased transaction costs, proponents emphasize the strategic benefits of outsourcing and high potentials of cost-savings. This paper brings together both views by examining the conditions under which both the strategic potentials as well as savings in production and transaction costs of developing and maintaining software applications can better be achieved in-house as opposed to by an external vendor. We develop a theoretical framework from three complementary theories and test it empirically based on a mail survey of 139 German companies. The results show that insourcing is more cost efficient and advantageous in creating strategic benefit through IS if the provision of application services requires a high amount of firm specific human assets. These relationships, however, are partially moderated by differences in the trustworthiness and intrinsic motivation of internal versus external IS professionals. Moreover, capital shares with an external vendor can lower the risk of high transaction costs as well the risk of loosing the strategic opportunities of an IS

The Impact of Human Asset Specificity on the Sourcing of Application Services

The question concerning the circumstances under which it is advantageous for a company to outsource certain information systems functions has been a controversial issue for the last decade. While opponents emphasize the risks of outsourcing based on the loss of strategic potentials and increased transaction costs, proponents emphasize the strategic benefits of outsourcing and high potentials of cost-savings. This paper brings together both views by examining the conditions under which both the strategic potentials as well as savings in production and transaction costs of developing and maintaining software applications can better be achieved in-house as opposed to by an external vendor. We develop a theoretical framework from three complementary theories and test it empirically based on a mail survey of 139 German companies. The results show that insourcing is more cost efficient and advantageous in creating strategic benefits through IS if the provision of application services requires a high amount of firm specific human assets. These relationships, however, are partially moderated by differences in the trustworthiness and intrinsic motivation of internal versus external IS professionals. Moreover, capital shares with an external vendor can lower the risk of high transaction costs as well the risk of loosing the strategic opportunities of an IS

The Case for Selective ICT Outsourcing: it\u27s easier for green field sites

This paper examines published research on Information and Communications Technology (ICT) Outsourcing and uses this as a framework through which to examine the delivery of ICT services at the South West Alliance of Rural Hospitals, an environment not without challenges. Right from the beginning the CIO appointed to the Alliance decided to address these challenges by implementing a high speed telecommunications network to reduce the costs of data, voice and video communications within the Alliance. The emergence of the truly virtual health care network in Victoria’s South West supported by external service providers but managed by a small yet powerful central ICT team holds a number of useful lessons for the delivery of services in start up cooperative organisations, particularly regional, rural and remote (R3) organisations