The Role of Alignment Capability in Strategic IS Outsourcing Success

Strategic Information Systems outsourcing refers to the long term outsourcing of systems with a major transformational impact on the client’s business strategy. Such outsourcing arrangements mitigate risks through closely aligned client and vendor business/IT operational processes and shared strategic vision. Strategic outsourcing arrangements rely on both contractual and relational governance to build inter-firm alignment capability. This research paper defines a multi-item measure of clientvendor alignment capability, and uses that instrument to survey a number of North America based oil and gas exploration and energy producing firms, who have undertaken the outsourcing of strategic information systems to an Indian information systems vendor. The results indicate which elements of contractual and relational outsourcing governance support the building of client-vendor alignment and whether alignment capability improves outsourcing success factors

Elemen kemanusiaan dan perantara amalan perkongsian ilmu tersirat dengan kejayaan penyumberan luar sistem maklumat

This thesis examines the relationship between human elements such as roles, internal strengths and communication and the information systems outsourcing success. It also assesses the impact of tacit knowledge-sharing practices as the mediator of the relationship. A total of 500 questionnaires were distributed by mail to the project managers of information systems outsourcing companies registered with Malaysia's Multimedia Super Corridor. Of the total, 168 were returned and only 166 questionnaires were coded and analyzed. The analysis of the hypotheses were carried out using multiple regression analysis and hierarchical multiple regression. The findings indicate that the elements of role such as the project scope and undertaking tasks, the elements of internal strength such as self-confidence, compassion, sincerity and willingness to change, and the elements of communication such as formal and informal discussions, and rational discussion had positive and significant impacts on the outsourcing information systems‟ success. In addition, the study also showed that the practice of sharing tacit knowledge fully mediates the relationship between role and the information systems‟ outsourcing success and also partially mediates the relationship between communication and the information systems‟ outsourcing success. Overall, these findings are consistent with the recommendations of the attribution theory, the resource-based theory and the findings of previous studies. This study also contributes to the process of developing and validating the research instrument, in which the items of measurement for human elements such as internal strengths and communications are scarce and not statistically validated. The findings of this study may also help the industries to develop specific training modules for their staff to ensure that each has elements of humanity. This is because these elements have a positive and significant impact on the success of the outsourcing of the information systems. The industry also needs to give serious attention to tacit knowledgesharing practices among their staff because the practice is a liaison or mediator to the relationship

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

09/21/1988 - Rita Nielsen

Organizations need to share and acquire new information to sustain competitive advantage in complex environment. They communicate through IT-based integrated systems to fasten communication and knowledge sharing for the creation of innovative products. Firms are, thus, extending their operations to integrate strategic knowledge from partners in the product development process. In this paper, we present a case study related to process innovation in an aerospace firm integrating its information systems with one of its partners to facilitate the design of the models of a complex product. We investigate on the strategy followed to integrate the information systems, the types of these latter, on their success factors and their impact on the product development. The case study provides important insights on the integration of information systems for product design outsourcing

Identifying Key Determinants of Service Provider Effectiveness and the Impact it has on Outsourced Security Success

The purpose of this research was to identify key determinants of service provider effectiveness and how it impacts outsourced security success. As environments have become more robust and dynamic, many organizations have made the decision to leverage external security expertise and have outsourced many of their information technology security functions to Managed Security Service Providers (MSSPs). Information Systems Outsourcing, at its core, is when a customer chooses to outsource certain information technology functions or services to a service provider and engages in a legally binding agreement. While legal contracts govern many aspects of an outsourcing arrangement, it cannot serve as the sole source of determining the outcome of a project. Organizations are viewing outsourcing success as an attainment of net benefits achieved through the use of a service provider. The effectiveness of the service provider has an impact on a company’s ability to meet business objectives and adhere to service level agreements. Many empirical studies have focused on outsourcing success, but few have focused on service provider effectiveness, which can serve as a catalyst to outsourcing success. For this research, Agency Theory (AT) was proposed as a foundation for developing the research model which included key areas of focus in information asymmetry, the outsourcing contract, moral hazard, trust, service provider effectiveness, and security outsourcing success. Agency Theory helped uncover several hypotheses deemed germane to service provider effectiveness and provided insight into helping understand the principal-agent paradigm that exists with security outsourcing. Confirmatory Factor Analysis (CFA) and Partial Least Squares-Structured Equation Modeling (PLS-SEM) were used with SmartPLS to analyze the data and provided clarity and validation for the research model and helped uncover key determinants of service provider effectiveness. The statistical results showed support for information asymmetry, contract, and trust, all of which were mediated through service provider effectiveness. The results also showed that service provider effectiveness is directly correlated to increasing security outsourcing success. This concluded that the research model showed significant results to support 4 of the 5 hypotheses proposed and helped uncover key findings on how security outsourcing success can be impacted. This research served as an original contribution to information security while viewing outsourcing success from the perspective of the client, security services, and customer expectations

An investigation of knowledge transfer in information systems (IS) outsourcing

This thesis was submitted for the degree of Doctor of Philosophy and awarded by Brunel University.Inter-organisational knowledge transfer is of central interest both as an academic topic and in business practice. However, despite the attention given to the importance of this subject from different perspectives in various contexts, little is known about how knowledge is transferred from vendors to clients in information systems (IS) outsourcing. This research attempts to address this apparent theoretical and empirical deficiency by providing a deeper understanding and more holistic analysis of the key factors which facilitate or inhibit knowledge transfer success in IS outsourcing. This study employed a qualitative, multiple case study approach in the interpretive paradigm. Data was collected mainly from the IS departments of three public sector organisations in Oman. Oman was chosen as the context for the study due to its rapid growth in recent years and the opportunity to consider the many major IS outsourcing projects which have been undertaken by its public sector. Through semi-structured interviews, this study explored the perspectives of the internal IS staff on their experience of knowledge transfer and learning from vendors through various IS outsourcing projects. Written and electronic documentations as well as non-participant observations also served as important triangulation and complementary sources in understanding the phenomenon being studied and as means of gaining additional perspectives and further insights on key issues. The empirical evidence demonstrated that there are five sets of factors which facilitate or inhibit knowledge transfer success in IS outsourcing. These are: knowledge (knowledge tacitness and knowledge complexity), client (learning intent, absorptive capacity and motivation), vendor (vendor capability, vendor credibility and vendor openness), relationship (relationship quality, relationship duration, relationship governance and organisational distance) and knowledge transfer mechanisms (formal and informal). The findings of this study contributed and extended the growing body of research on IS outsourcing by developing a novel, holistic conceptual framework which examined five sets of factors that impact knowledge transfer success. Additionally, it provided prescriptive value for practitioners seeking to realise efficient and effective knowledge transfer in IS outsourcing

Factors impacting knowledge transfer success in information systems outsourcing

Despite increased research interest on knowledge transfer in information systems (IS) outsourcing, the field still lacks sound and holistic understanding of the key factors influencing knowledge transfer success. The present paper attempts to provide a synthesis of existing theoretical perspectives and empirical findings related to the factors that facilitate or hamper knowledge transfer success in IS outsourcing. The data collection method is discussed and the key findings are presented. Conclusion is drawn and further research is suggested

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

Transmission losses cost allocation in restructed electricity market environment

During these recent decades, the restructuring system of electricity market has been taken places around the whole world. Due to the restructuring (deregulation), the electrical power system has been divided into three separates categories according to the function. First stage of power system is the generation companies (GENCOs), followed by transmission companies (TRANSCOs) and distribution companies (DISCOs). The competitive environment will be handling by a non-profit entity, independent system operator (ISO) that functioning as the system securities that have to make sure that the power system continues to operate in a stable and economical manner. However, restructuring system can give effect during the energy transmission. One of the transmission issues is regarding the power losses. To overcome the losses, generators must generate more power. The issue regarding the transmission losses in deregulated system is how to allocate it to the user and charge them in fair ways as in for instance the pool trading model, it is hard to trace the power contribution and losses of each user in transmission line. In addition, the users didn’t want to pay the losses, it means that the ISO have to responsible for the losses and it will be unfair to put the responsible to ISO alone. Therefore, in this project, the allocation of transmission losses and loss cost methods which are the pro-rata and proportional sharing method will be investigated. Comparison between those methods will be done in order to identify which types of method that reflect an efficient and fair way to distribute the cost of the transmission losses to the user. These chosen methods will be tested on IEEE bus system

Examining client perceptions of partnership quality and its dimensions in an IT outsourcing relationship

This paper reports on an empirical study of the multidimensionality of partnership quality in IT outsourcing arrangements and the relationships between these dimensions of partnership quality. A two-phase national survey was conducted to collect empirical data to confirm the dimensions of partnership quality in an IT outsourcing arrangement from the client organisation perspective and to identify the significant relationships between these dimensions using a second generation multivariate analysis technique—partial least squares (PLS). The findings from results of the data analyses show that inter-organisational trust, shared business understanding and to a lesser extent, functional and dysfunctional conflict between the client organisation and the outsourcing vendor in an IT outsourcing relationship are the key determinants of partnership quality. The key outcome variable for high partnership quality between the client organisation and the outsourcing vendor in an IT outsourcing relationship is mutual beneficial sharing of risks and benefits. Commitment in an IT outsourcing relationship is confirmed as a multidimensional construct of behaviour commitment and temporal/continuance commitment and was found to be influenced by the other dimensions of partnership quality. The key findings of this study provide support for the notion that trust and shared business understanding are key drivers in the IT outsourcing partnership style relationship ensuring that the sharing of risks and benefits are realised and conflict is minimised leading to a high quality and ultimately successful partnership between the client organisation and the outsourcing vendor. Furthermore our findings indicate that behavioural commitment to the contractual obligations of an IT outsourcing relationship sustains an ongoing temporal commitment to the partnership between the client organisation and the outsourcing vendor