Economic, systemic, and environmental influences on the sourcing of application services : a comparative study of German and US companies

This study examines the question on why firms outsource particular information systems (IS) functions to varying degrees. It is the first to simultaneously examine three theoretical perspectives that represent different rationales for and against IS outsourcing. The first of these perspectives is new to the IS outsourcing literature. It acknowledges the systemic character of the IS function, i.e. that IS performance critically depends on various sub-functions working together effectively. Such systemic influences may be affected through outsourcing particular IS functions. Accordingly, they are considered as determinants that reflect the extent to which systemic influences are better recognized through in-house as opposed to external service provisioning. In order to examine the relative importance of systemic influences in the outsourcing decision they are contrasted against two more established ones; the one holds that the outsourcing decision is based on a cost comparison including production and transaction costs (efficiency); the other recognizes the fact that outsourcing decisions are often influenced by environmental forces as reflected by the opinion of influential stakeholders and the level of control (i.e. power) that an organization has over the decision. Additionally, this study is the first to formulate hypotheses ex ante on the moderating influence of cross-cultural differences on IS outsourcing determination. A questionnaire survey was conducted including 180 companies in the United States and Germany. The results revealed that efficiency considerations and the opinions of external stakeholders were significant determinants of IS outsourcing in both countries, though productions costs were more strongly considered than transaction costs. As hypothesized, no statistically significant differences between countries could be detected regarding the impact of these three factors. In contrast, the consideration of two types of systemic influences varied significantly between countries confirming our hypotheses that systemic influences are cross-culturally sensitive. In addition, the impact of outsourcing control was statistically significant between countries confirming cross-cultural influences. The results reveal a number of theoretical and practical implications

Systemic, economic, and environmental influences on the sourcing of application services : a comparison of companies in Germany and the United States

This paper examines three different rationales that might influence a company’s decision of whether to outsource particular information systems (IS) functions within a cross-cultural context. The first of these rationales acknowledges the systemic nature of the IS function i.e. that it is critical for various IS sub-functions and components to work together effectively for the overall IS performance. This perspective is new to IS outsourcing literature. We consider whether and how such systemic effects are factored into a decision to outsource IS sub-functions such as applications development and maintenance. In order to examine the importance of this new perspective, we contrast it with two established ones. The first of these assumes the outsourcing decision is based on a rational cost comparison, including production and transaction costs. The second assumes environmental forces frequently influence outsourcing decisions, as reflected in the opinion of influential stakeholders and the level of discretion in decision-making. This study also explores whether the relevance of determinants in IS outsourcing is influenced by cross-cultural dimensions. This is empirically examined using data from companies based in the United States and companies based in Germany. While cost factors and the opinion of external stakeholders are significant determinants of IS outsourcing for both countries, the countries differ significantly in how the systemic impact of an IS function and the systemic views of IS professionals are factored into the sourcing decision. In addition, the impact of outsourcing decision-making discretion was found to differ significantly between countries. These differences support our perspective that cultural dimensions, such as differences between the United States and Germany in the individualism-collectivism rating as well as in the legitimized bargaining power of labor interest groups, exert a moderating impact on a company’s decision to outsource

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

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

Systemic Determinants of the Information Systems Outsourcing Decision: A Comparative Study of German and United States Firms

The practice of information systems (IS) outsourcing is widely established among organizations. Nonetheless, evidence suggests that organizations differ considerably in the extent to which they deploy IS outsourcing. This variation has motivated research into the determinants of the IS outsourcing decision. Most of this research is based on the assumption that a decision on the outsourcing of a particular IS function is made independently of other IS functions. This modular view ignores the systemic nature of the IS function, which posits that IS effectiveness depends on how the various IS functions work together effectively. This study proposes that systemic influences are important criteria in evaluating the outsourcing option. It further proposes that the recognition of systemic influences in outsourcing decisions is culturally sensitive. Specifically, we provide evidence that systemic effects are factored into the IS outsourcing decision differently in more individualist cultures than in collectivist ones. Our results of a survey of United States and German firms indicate that perceived in-house advantages in the systemic impact of an IS function are, indeed, a significant determinant of IS outsourcing in a moderately individualist country (i.e., Germany), whereas insignificant in a strongly individualist country (i.e., the United States). The country differences are even stronger with regard to perceived in-house advantages in the systemic view of IS professionals. In fact, the direction of this impact is reversed in the United States sample. Other IS outsourcing determinants that were included as controls, such as cost efficiency, did not show significant country differences

Dynamical Chiral Symmetry Breaking on the Light Front.II. The Nambu--Jona-Lasinio Model

An investigation of dynamical chiral symmetry breaking on the light front is made in the Nambu--Jona-Lasinio model with one flavor and N colors. Analysis of the model suffers from extraordinary complexity due to the existence of a "fermionic constraint," i.e., a constraint equation for the bad spinor component. However, to solve this constraint is of special importance. In classical theory, we can exactly solve it and then explicitly check the property of ``light-front chiral transformation.'' In quantum theory, we introduce a bilocal formulation to solve the fermionic constraint by the 1/N expansion. Systematic 1/N expansion of the fermion bilocal operator is realized by the boson expansion method. The leading (bilocal) fermionic constraint becomes a gap equation for a chiral condensate and thus if we choose a nontrivial solution of the gap equation, we are in the broken phase. As a result of the nonzero chiral condensate, we find unusual chiral transformation of fields and nonvanishing of the light-front chiral charge. A leading order eigenvalue equation for a single bosonic state is equivalent to a leading order fermion-antifermion bound-state equation. We analytically solve it for scalar and pseudoscalar mesons and obtain their light-cone wavefunctions and masses. All of the results are entirely consistent with those of our previous analysis on the chiral Yukawa model.Comment: 23 pages, REVTEX, the version to be published in Phys.Rev.D; Some clarifications in discussion of the LC wavefunctions adde

Is the ground state of Yang-Mills theory Coulombic?

We study trial states modelling the heavy quark-antiquark ground state in SU(2) Yang-Mills theory. A state describing the flux tube between quarks as a thin string of glue is found to be a poor description of the continuum ground state; the infinitesimal thickness of the string leads to UV artifacts which suppress the overlap with the ground state. Contrastingly, a state which surrounds the quarks with non-abelian Coulomb fields is found to have a good overlap with the ground state for all charge separations. In fact, the overlap increases as the lattice regulator is removed. This opens up the possibility that the Coulomb state is the true ground state in the continuum limit.Comment: 10 pages, 9 .eps figure

Large orders in strong-field QED

We address the issue of large-order expansions in strong-field QED. Our approach is based on the one-loop effective action encoded in the associated photon polarisation tensor. We concentrate on the simple case of crossed fields aiming at possible applications of high-power lasers to measure vacuum birefringence. A simple next-to-leading order derivative expansion reveals that the indices of refraction increase with frequency. This signals normal dispersion in the small-frequency regime where the derivative expansion makes sense. To gain information beyond that regime we determine the factorial growth of the derivative expansion coefficients evaluating the first 80 orders by means of computer algebra. From this we can infer a nonperturbative imaginary part for the indices of refraction indicating absorption (pair production) as soon as energy and intensity become (super)critical. These results compare favourably with an analytic evaluation of the polarisation tensor asymptotics. Kramers-Kronig relations finally allow for a nonperturbative definition of the real parts as well and show that absorption goes hand in hand with anomalous dispersion for sufficiently large frequencies and fields.Comment: 26 pages, 6 figure

Dynamical Chiral Symmetry Breaking on the Light Front I. DLCQ Approach

Dynamical chiral symmetry breaking in the DLCQ method is investigated in detail using a chiral Yukawa model closely related to the Nambu-Jona-Lasinio model. By classically solving three constraints characteristic of the light-front formalism, we show that the chiral transformation defined on the light front is equivalent to the usual one when bare mass is absent. A quantum analysis demonstrates that a nonperturbative mean-field solution to the ``zero-mode constraint'' for a scalar boson (sigma) can develop a nonzero condensate while a perturbative solution cannot. This description is due to our identification of the ``zero-mode constraint'' with the gap equation. The mean-field calculation clarifies unusual chiral transformation properties of fermionic field, which resolves a seemingly inconsistency between triviality of the null-plane chiral charge Q_5|0>=0 and nonzero condensate. We also calculate masses of scalar and pseudoscalar bosons for both symmetric and broken phases, and eventually derive the PCAC relation and nonconservation of Q_5 in the broken phase.Comment: Revised version to appear in Phys. Rev. D. 19 pages, 4 figures, REVTEX. Derivation of the PCAC relation is given. Its relation to the nonconservation of chiral charge is clarified. 1 figure and some references adde

Thermal Field Theory and Generalized Light Front Coordinates

The dependence of thermal field theory on the surface of quantization and on the velocity of the heat bath is investigated by working in general coordinates that are arbitrary linear combinations of the Minkowski coordinates. In the general coordinates the metric tensor $g_{\bar{\mu\nu}}$ is non-diagonal. The Kubo, Martin, Schwinger condition requires periodicity in thermal correlation functions when the temporal variable changes by an amount $-i\big/(T\sqrt{g_{\bar{00}}})$. Light front quantization fails since $g_{\bar{00}}=0$, however various related quantizations are possible.Comment: 10 page