The impact of potential flexibility gains and losses on the intention to outsource business processes

In an ever accelerating world demanding fast adjustment to changing business environments, organizational flexibility becomes increasingly important. By outsourcing business processes (BPO), there are both potential flexibility losses (e.g. loss of control) and potential flexibility gains (e.g. the transformation of fixed to variable costs). Firms have to balance this trade-off to retain sufficient flexibility or even enlarge their strategic and operational flexibility. Based on an empirical study with Germany’s Top 200 Banks it is shown that the perception of both flexibility gains and losses have a profound impact on the outsourcers’ attitude towards BPO. In particular, potential flexibility losses have a higher impact on outsourcers’ attitude than potential flexibility gains. Subsequently, in accordance with the theory of reasoned action it turns out that attitude is an antecedent of the intention towards outsourcing. Therefore we argue that flexibility-related issues should be explicitly considered in outsourcing evaluations and service providers should emphasize on contractual means to demonstrate that organizational flexibility will not be negatively affected

Options for Human Capital Acquisition

An \u27options\u27 view of human capital acquisition explains value creation through timedeferred, sequential, path-dependent investment choices and addresses gaps in the resourcebased theory explanation of the relationship between human resources and competitive advantage. Firms will invest in options for human capital, using alternative employment arrangements like temporary/contractual/part-time workers and internships, or by outsourcing the work, when uncertainty associated with human capital is high and investments in human capital are largely irreversible. We discuss various options for skills and employees, two interrelated components of human capital. These are flexibility options, options to wait or defer, options to abandon, learning options, and switching options. The opportunity cost of not having options is quantifiable, which makes the real options approach valuable for strategic HRM decisions

Corportate strategy, centralisation and outsourcing in banking: case studies on paper payment processing

This is an empirical review of IT outsourcing as an emerging tool for corporate strategy after deregulation and other phenomena changed the suitability of the global/universal bank model. Case studies of UK commercial banks are used to focus on cost management of paper and electronic processing through insourcing and outsourcing arrangements to change the size/efficiency equation in banking. The analysis discusses the corporate strategy and corr capabilities ussues behind a number of innovations and illustrates how outsourcing and other third party arrangements alters strategic balance albeit as a component of overall strategy. The paper establishes why outsourcing decisions have been concentrated in particular aspects of banking and discusses the competitive and environmental forces which have contributed to this focus.

Competition from emerging countries, international relocation and their impacts on employment

International relocation has become a topical issue in recent months, in France as elsewhere in Europe. This working paper is a set of four articles. Guillaume Daudin and Sandrine Levasseur provide an assessment of the impact of international relocation on French employment. Georges Pujals deals with offshore outsourcing in the financial sector from a European perspective. Catherine Mathieu and Henri Sterdyniak focus on policy measures taken or to be taken in face of job losses in the French economy. Jean-Luc Gaffard and Michel Quéré show that free competition alone is not optimal for European economies and that a combination of structural and growth oriented macroeconomic policies is needed

Outsourcing or insourcing: a case study of regional hospitals in public health within eThekwini District.

Masters Degree. University of KwaZulu-Natal, Durban.Outsourcing has been adopted by public health to improve the efficiency and quality of health care services. Essentially, outsourcing of services such as catering, believed to be a non-core function, has become vital element to afford management time to focus on improving performance on the clinical function. Traditionally, non-core services have been rendered in-house and thus the role of government as the employer and service provider has been altered. Many countries in the world, including South Africa, have come under pressure resulting from scarce financial resources, increased patient demands, high unemployment, and increased health care costs. Thus, the need to control expenditure and provision of high quality service has led hospitals to sought relief from financial pressure by outsourcing non-clinical functions. This study has cross-examined two regional hospitals including Addington and R K Khan situated in EThekwini District to investigate the advantages and disadvantages of outsourcing and insourcing as well as the impact thereof on cost saving, human resource and efficiency in service delivery, specifically in catering services. The study is qualitative in nature and a case study research design is employed to explore whether a relationship existed between outsourcing and insourcing and efficiency. Semi structured interviews were used to collect data. A total number of 14 government officials including managers and employees directly involved with catering in the hospital were interviewed. On one hand, findings from the study show that outsourcing unit displayed added advantage of offering catering services with stable monthly expenditure, improved performance, and quality of service. On the other hand, insourcing unit proved to have an advantage of being the preferred by the employer. The recommendations stemming from the study concludes that if insourcing is to be adopted as a strategy that is efficient and effective, skilled employees should be employed, and a training fund should be allocated for the existing employees and does away with single source supplier of food to allow for better negotiations. For outsourcing, improved conditions of employment should be implemented through clearly stated contract terms and stricter monitoring tools should be implemented. In its final analysis, the study concludes that public health could benefit by marrying the two strategies

Effective Strategies for Managing the Outsourcing of Information Technology

More than half of information technology (IT) outsourced projects fail, primarily due to a lack of effective management practices surrounding the outsourcing end-to-end process. Ineffective management of the IT outsourcing (ITO) process affects organizations in the form of higher than expected project costs, including greater vendor switching or reintegration costs, poor quality, and loss of profits. These effects indicate that some business leaders lack the strategies to effectively manage the ITO process. The purpose of this single-case study was to apply the transaction cost economics (TCE) theory to explore strategies 5 business professionals use to manage an ITO project in a financial services organization located in the Midwestern region of the United States. Participant selection was purposeful and was based on the integral role the participants play on the ITO project. Data collection occurred via face-to-face semistructured interviews with the participants and the review of company documents. Data were analyzed using inductive coding of phrases, word frequency searches, and theme interpretation. Three themes emerged: vendor governance and oversight, collaborative strategic partnership, and risk management strategies enabled effective management of ITO. Identifying and executing appropriate outsourcing strategies may contribute to social change by improving outsourcing infrastructure, which might support job creation; increasing standards of living, especially within emerging markets; and heightening awareness of different cultures, norms, and languages among people living in different regions around the world to establish commonalities and gain alignment with business practices