Outsourcing information systems: Drawing lessons from a banking case study

Financial and costs benefits are often put forward as the reasons why organisations decide to outsource. Emerging patterns and trends indicate that today’s outsourcing decisions are often motivated by factors other than cost. Thus, the decision-making process is more complex than it may at first appear. This paper presents findings from a case study from an organisation in the UK banking sector that was motivated to outsource aspects of its information technology/information system (IT/IS). The underlying motives and decision-making process that influenced the bank outsource its IT/IS are presented and discussed. Findings from the case study suggest political perspectives, as well as human and organisational issues influenced the bank’s strategic decision-making to outsource certain aspects of its business. An examination of the case study findings suggests that cost alone is not always responsible for decisions to outsource, as it was found the bank’s outsourcing decision was driven by a series of complex, interrelated motives in a bid to reduce the risks and uncertainties of managing its own technology. Considering the complex nature of the outsourcing process a frame of reference that can be used to assist managers with their decision to outsource IT/IS is propagated. The case study is used to present an organisation’s experiences as to how and why it decided to outsource its IS and thus offers a learning opportunity for other organisations facing similar difficulties. In addition, the case study findings highlight the need to focus greater attention on discriminating between the short and long-term consequences of IT/IS decision-makin

Outsourcing: guidelines for a structured approach

Outsourcing is a management approach by which an organization delegates some noncore functions to specialized and ef®cient service providers. In the era of ªglobal marketº and ªe-economyº, outsourcing is one of the main pillars of the new way to conceive the relationships among companies. Despite outsourcing large diffusion, huge business cases and big deals of documentation available on network or press, there is no structured procedure able to support the govern of the evolution of a generic outsourcing process. In accordance with the principles of total quality management, this paper describes a proposal of a new approach for managing outsourcing processes. The model, which can be easily adapted to different application ®elds, has been conceived with the main aim of managing strategic decisions, economic factors and human resources. The approach is supported by different decision and analysis tools, such as benchmarking techniques, multiple criteria decision aiding (MCDA) methods, cost analysis, and other process-planning methodologies. An application of the method to a real case is also provide

The perspective of Malaysian Manufacturing Organizations on Strategy, HR Outsourcing and HR Costs

The paper discusses the relationship between different types of human resource management (HRM) strategy and the human resource outsourcing, and impact on the size of human resource (HR) department. Three HRM strategies are considered: Facilitation, accumulation and utilization. The data for the study were obtained from survey responses from 232 organizations, of which 113 were engaged in HR outsourcing. The findings suggest that organizations tend to rely on outsourcing of HR functions when they espouse facilitation and utilization HRM strategy. Concurrently, by relying on HR outsourcing, the organizations manage to experience a reduction in the size of HR department. The results show that it is important for the organizations to better understand the implications of an increased reliance on outsourcing within HR. This allows them to focus on how HR functions are delivered within organizations with the interaction of HRM strategy and the size of HR department will tend to be smaller resulting from outsourcing activities.outsourcing, strategy, HRM.

Data Envelopment Analysis (Dea) approach In efficiency transport manufacturing industry in Malaysia

The objective of this study was to measure of technical efficiency, transport manufacturing industry in Malaysia score using the data envelopment analysis (DEA) from 2005 to 2010. The efficiency score analysis used only two inputs, i.e., capital and labor and one output i.e., total of sales. The results shown that the average efficiency score of the Banker, Charnes, Cooper - Variable Returns to Scale (BCC-VRS) model is higher than the Charnes, Cooper, Rhodes - Constant Return to Scale (CCR-CRS) model. Based on the BCC-VRS model, the average efficiency score was at a moderate level and only four sub-industry that recorded an average efficiency score more than 0.50 percent during the period study. The implication of this result suggests that the transport manufacturing industry needs to increase investment, especially in human capital such as employee training, increase communication expenses such as ICT and carry out joint ventures as well as research and development activities to enhance industry efficiency

Control, Process Facilitation, and Requirements Change in Offshore Requirements Analysis: The Provider Perspective

Process, technology, and project factors have been increasingly driving organizations to offshore early software development phases, such as requirements analysis. This emerging trend necessitates greater control and process facilitation between client and vendor sites. The effectiveness of control and facilitation has, however, not been examined within the context of requirements analysis and change. In this study, we examine the role of control and facilitation in managing changing requirements and on success of requirements gathering in the Indian offshore software development environment. Firms found that control by client-site coordinators had a positive impact on requirements analysis success while vender site-coordinators did not have similar influence. Process facilitation by client site-coordinators affected requirements phase success indirectly through control. The study concludes with recommendations for research and practice

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

Perspectives on IT Outsourcing Success: Covariance Structure Modelling of a Survey of Outsourcing in Australia

Australia has been at the forefront of the adoption of outsourcing as a means for delivering IT services, but the success of IT outsourcing in Australia has been mixed. With two hundred and forty one responses from the top 1000 IT users in the country, the survey reported in this paper is one of the largest and most representative IT outsourcing studies in the world. Covariance structure modelling and confirmatory factor analysis has shed new light on the concept of outsourcing success, highlighting its complex, multidimensional nature. It has also confirmed many insights gained to date from qualitative research. Analysis also emphasises the importance to the outsourcing relationship of the management processes adopted by the client organization. L'Australie a été un pionnier dans l'adoption de l'impartition pour les services informatiques. Toutefois, les résultats ont été mitigés. Avec plus de deux cent répondants, provenant des 1000 plus grandes entreprises australiennes, cette étude et une des plus larges et représentatives faites jusqu'à0501ntenant. Une analyse des structure de co-variance, de même qu'une anlayse factorielle confirmatoire jettent un regard neuf sur la notion de succès de l'impartition. L'étude met en lumière le caractère complexe et multi-dimensionel de ce succès.Outsourcing, Australia, survey research, success, information systems, Impartition, Australie, enquête, succès, services informatiques

Strategic Intent, Contract Duration, and Performance: Evidence from Micro-Outsourcing

Micro-outsourcing is the process of sourcing work to smaller firms or individuals using online sites. Several websites provide a platform to match clients and vendors for sourcing jobs. A typical issue with micro-sourcing is information asymmetry regarding the actual expertise of vendors. Online platforms bridge this gap using vendors’ prior histories and client evaluations. In this study, we examine how the strategic intents of vendors as captured by the platform play a moderating role on the relationship between project contract duration and client evaluation of vendor performance. Our empirical analysis uses project level data of over 6000 completed micro-outsourcing IT projects obtained from a leading micro-sourcing IT platform. We find that competency-focused strategic intent and goal-focused strategic intent positively moderate the relationship between project contract duration and client evaluation of vendor performance; whereas cost-focused strategic intent negatively moderates this relationship. Contributions and implications for research and practice are discussed