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

Explaining I.T. Outsourcing Purchasers’ Dissatisfaction

Outsourcing of IT is a popular strategy, argued by proponents to deliver a range of benefits including cost savings, increased service quality, and strategic advantages. However, empirical evidence of the success of outsourcing is limited, and several recent studies have suggested widespread dissatisfaction exists amongst purchasers. This paper analyses one such study to determine predictors of outsourcing satisfaction (and dissatisfaction). The analysis reveals that, for purchasers, IT outsourcing satisfaction and perceived value (which are highly correlated) depend on whether strategic benefits are obtained, and on the technical service quality provided by vendors. Both in turn depend on whether expected cost savings are obtained. The implications of these findings for both vendors and purchasers are discussed

Outsourcing and Organizational Change, An employee perspective

Outsourcing seems to have become the new trend in organizational strategy. In outsourcing, part of the organization’s production or service process is discontinued and transferred to another party, along with personnel and other resources. Although the potential economic benefits of outsourcing are thought to be considerable, a growing number of evaluation studies show disappointing outcomes. Cost savings tend to be less than expected and quality sometimes declines. A reason for these outcomes may be that - just like with downsizing and mergers-acquisitions in earlier days - managers tend to focus almost exclusively on economic aspects, ignoring the human and social impacts. Morespecifically, one might explain unsatisfactory economic results from a failure to consider the change implications of outsourcing. This paper analyzes the nature of the organizational change implied in outsourcing, comparing it to mergersacquisitions and downsizing. Next, it identifies some critical aspects of the transition management process which, when dealt with effectively, may enhance the success of outsourcing. The theoretical analysis is contrasted with findings from an empirical study on outsourcing in the Netherlands. In interviews with 11 experts and 10 workers on three phases of outsourcing, 70 aspects of(un)successful transition management were identified. Next, 36 employees involved in outsourcing rated the importance of these aspects and indicated their presence during the outsourcing process. Discrepancy ratings, showing which aspects of transition management received insufficient attention, confirm the results of the theoretical analysis. This underlines the importance of organizational change when implementing outsourcing.Economics ;

Outsourcing in Healthcare Through Process Modularization - A Lean Perspective

Looking for efficiency, quality and profitability gains, healthcare organizations are adopting outsourcing solutions in the attempt of “doing more with less”. Seeking for cost reduction, risk mitigation, adapting to quick changes without compromising internal resources, these organizations also take big risks in control and flexibility variables. In order to understand how healthcare organizations find the best value equation combining internal and external resources in a modular service conception, a case study on a start‐up Long‐term Care unit with innovative format, great levels of customization and following an outsourcing strategy, was carried out. The main conclusion, among others, is that in ambitious start‐ups, having speed of entrance as the conditioning factor, a process orientation and management approach may offer a clear view of the gains related with trade‐off decisions regarding time and cost (agility) and cost and quality (Leanness) ie, decisions under the “leagile” paradigm. This study contributes for a wider understanding of the “leagile” concept associated to an outsourcing operational strategy. Additionally, it also provides new insights to the concept of modularity in services settings in a complex service as healthcare

Outsourcing in healthcare through process modularization: a lean perspective

Looking for efficiency, quality and profitability gains, healthcare organizations are adopting outsourcing solutions in the attempt of "doing more with less". Seeking for cost reduction, risk mitigation, adapting to quick changes without compromising internal resources, these organizations also take big risks in control and flexibility variables. In order to understand how healthcare organizations find the best value equation combining internal and external resources in a modular service conception, a case study on a start-up Long-term Care unit with innovative format, great levels of customization and following an outsourcing strategy, was carried out. The main conclusion, among others, is that in ambitious start-ups, having speed of entrance as the conditioning factor, a process orientation and management approach may offer a clear view of the gains related with trade-off decisions regarding time and cost (agility) and cost and quality (Leanness) ie, decisions under the "leagile" paradigm. This study contributes for a wider understanding of the "leagile" concept associated to an outsourcing operational strategy. Additionally, it also provides new insights to the concept of modularity in services settings in a complex service as healthcare

An Evaluation of Outsourcing Process in a Nigerian University: Benefits and Challenges

This study examined the outsourcing procedures in a Nigerian University as well as the benefits and challenges involved. Data were derived from primary sources through the administration of questionnaires on 52 purposively selected university administrative staff (20) from the departments responsible for the outsourcing process as well as (32) from the companies that provide the outsourced services. In depth interviews were conducted with 8 purposively selected university administrative staff involved in the outsourcing process. The retrieved questionnaires were analyzed using descriptive statistics in the form of frequencies, while the interviews were reported using the ZY index table. The results revealed that strategizing on the services to be outsourced and weighing the outsourcing options before choosing and screening the vendors were the major steps embarked upon in the outsourcing procedure. The reasons for outsourcing included the quest to reduce and control cost as well as the need to improve the quality of services delivered. The results further revealed that the process of outsourcing improved the quality of services provided (75%), reduced cost (76.9%), increased efficiency and enabled the university to focus on more core activities (71.1%). The major challenges identified in outsourcing included the insecurity which it creates among university staff (96.1%), and poor motivation and competence of the outsourced staff (84.6%). The study concluded that the university management should carefully plan and evaluate the outsourcing process to ensure its success in cutting cost and in providing efficient service in line with the university goals. Keywords: - Outsourcing, benefits, challenges, Nigeria, University

Governance Methods Used in Externalizing Information Technology

Information technology (IT) is the largest capital expenditure in many firms and is an integral part of many organizations\u27 strategies. However, the benefits that each company receives from its IT investments vary. One study by Weill (2004) found that the top performer in the sample was estimated to have as high as a 40 greater return on its IT investment than its competitors. To expedite the progress toward getting better value from IT investments, along with the need to deal with the increasing complexity and expense of IT, a growing number of companies are turning to outside service providers to develop and/or manage various aspects of their information systems. The governance methods used by firms to maintain control over the quality, services, and cost of IT outsourcing are the focus of this dissertation.Previously in the literature, researchers have looked into the phenomenon of outsourcing from various perspectives. However, existing literature has not constructed or proposed an outsourcing model that examines the important moderating impact of internal technical capabilities to governance mechanisms. Building on existing literature related to IT outsourcing, this dissertation examines governance mechanisms that were used by firms to maintain control over the quality, services, and the cost of outsourcing of IT in order to identify their contribution to the success of IT outsourcing initiatives from the perspective of managers whose companies have engaged in IT outsourcing. In this dissertation, a research model was developed, and through an on-line survey instrument, data were collected from the members of the Information Systems Community of Practice in the Project Management Institute. The findings showed that the following governance mechanisms had positive impact on managerial perceptions of IT outsourcing success: (1) Financial commitment in the form of dedicated asset-specific investments and (2) attitudinal commitment. This study also confirms the moderation effect that firm technological capab

Contracting for IT Outsourcing with Asymmetric Information

IT outsourcing allows a business to reduce the cost of IT service delivery and improve the quality of IT service by taking advantage of the service provider’s economics of scale and technical expertise. However, the successful outsourcing of IT service is hampered by lack of guidance on how to design incentive contracts to encourage performance of the service provider, especially in the presence of information asymmetry and incentive divergence. In this article, we identify and characterize two asymmetric information factors: asymmetric effort information and asymmetric capability information. Depending on whether the service provider’s effort information and capability information is symmetric or not, we consider three information scenarios and characterize optimal incentive contracts for each scenario. We also introduce the concept of information value to quantify the adverse effects of the two asymmetric information factors. The results provide theoretical support for designing incentive contracts that mitigate the adverse effects of asymmetric information, and recommend effective guidance for activities so as to reduce the degree of information asymmetry

The determinants of changes in the organization of production: Evidence from Spanish plant-level data

In this paper we empirically examine the determinants of changes in the organization of production using detailed information on a data set from a new plant-level survey of 1003 plants covering the full range of manufacturing industries in Spain. In particular, and among many other things, survey respondents were asked how service outsourcing practices had changed in the last three years. The answer to this question is indicative of the changes in the importance of backward integration for each of the plants studied. Using other information provided in the survey, we relate the reported changes in outsourcing to changes in other relevant dimensions as possible determinants of the boundaries of the firm. These dimensions are: plant size, downstream market power, cost of inputs, price and quality of the final good and technological progress. Our findings show that outsourcing increases are strongly positively correlated with increases in market share and in market competition. We also find that outsourcing increases when plants face simultaneous increases in product quality and product prices and that it decreases when plants face simultaneous increases in market share and market competition. Finally, we find that multi-plant and one-plant firms adjust their outsourcing practices differently to outside changes. Since neither TCE nor PRT theories of vertical integration fully explain the patterns found in our data, we close this paper by following Adam Smith's claim that the extent of the market seems to be the only factor consistently limiting the degree of specialization in our setting.outsourcing; vertical integration; competition; manufacturing plants;

An Overview and Examination of the Indian Services Sector

India’s service sector has grown rapidly since the 1990s. Domestic demand for services has increased as incomes have risen, triggering the expansion of industries such as banking, education, and telecommunications. Exports have also increased rapidly, led by information technology and business process outsourcing (IT-BPO). India’s ability to offer low-cost, high-quality IT-BPO services has made it a world leader in this industry. However, employment in services has not grown as quickly as output. The majority of India’s jobseekers are low-skilled, but demand for workers is growing fastest in higher-skill industries. The supply of highly-skilled workers has not kept pace with demand, causing wages to increase faster for these workers than for lower-skilled ones. India’s government has supported the growth of service industries through a mix of deregulation, liberalization, and incentive programs, such as the Software Technology Parks of India. Nevertheless, burdensome regulations, poor infrastructure, and foreign investment restrictions continue to affect service firms’ ability to do business. USITC analysis suggests that additional liberalization would lead to an increase in India’s imports of services