Information Technology Outsourcing Projects Research Articles

How to Lead and Control IT Outsourcing Projects in Data-Rich Environments: A Vendor's Perspective

Despite the growth of data-rich environments and the increase in data accessibility, studies have offered limited insights into how to lead and control information technology (IT) outsourcing projects to benefit from these trends. To address the research gap, this study investigates the effect of big data accessibility on project performance, and analyzes the moderating effects of vendors’ leadership styles and outsourcers’ control mechanisms from a vendor's perspective. Based on absorptive capacity theory, we develop five hypotheses and examine them using data from 195 IT outsourcing projects. The results show that big data accessibility has a positive effect on IT outsourcing project performance, but that the effect varies with vendors’ leadership styles and outsourcers’ control mechanisms. Specifically, the positive effect of big data accessibility is weakened by vendors’ transactional leadership and outsourcers’ behavior-based control, whereas it is strengthened by vendors’ transformational leadership and outsourcers’ outcome-based control. This study contributes to the literature by identifying distinct roles of different leadership styles and different control mechanisms in leveraging big data accessibility.

The Interdependence of Coordination and Cooperation in Information Technology Outsourcing

One of the critical success factors in information technology outsourcing projects is how partners learn through interactions with each other. This learning facilitates the complex problem-solving processes and enables partners to take different perspectives, explore alternatives, and seek innovation in outsourcing projects. For this learning to occur, partners must strive to enhance collaboration, but generally, collaboration is viewed too narrowly as partners engage in coordination and cooperation independently of each other. Our framework suggests that learning is more effective when partners collaborate by cooperating to pursue jointly determined goals and coordinating to adjust their actions toward these goals. This study compares the independent model of collaboration with the interdependent model. The interdependent model suggests that coordination and cooperation mechanisms are interdependent and jointly influence learning outcomes. The findings show that the interdependent model provides a better explanation of the impact of coordination and cooperation mechanisms on relational learning than the independent model. This finding provides a more comprehensive understanding of relationship dynamics between partners. It also provides guidance for developing collaboration mechanisms that help synergize coordination and cooperation. Our study further shows that the perceptions of coordination and cooperation mechanisms are not symmetric between clients and vendors.

Elicitation of Key Factors to Support Information Technology Outsourcing in Technological Innovation Hubs: Applying a Multicriteria Analytical Framework

This work presents an analytical framework for eliciting key factors for successful relationships between parties in information technology outsourcing (ITO) projects. The proposal was based on a multicriteria analysis to identify key factors within the literature that were essential for the success of projects involving IT outsourcing. Using the multicriteria analysis method PROMETHEE II, the most important key factors were ranked according to the judgment of the managers of the companies in the innovation ecosystem of Alagoas, Brazil. The study was based on thirty-one judgment criteria that, in this case, were formed by the interviewed managers and twenty-one alternatives that were the key factors identified in the literature. This work contributes to composing a reference for the analysis of ITO projects and information governance, informing which factors should be prioritized according to the desired objective of the manager within the project. From the local perspective, the survey pointed to “quality production” as the most important factor, followed by “contract”, “top management engagement”, “risk management”, and “communication” as the most relevant factors for IT outsourcing success in the technological innovation hubs of Alagoas.

Risk evaluation of information technology outsourcing project: An integrated approach considering risk interactions and hierarchies

Effective risk evaluation is necessary to guarantee the successful completion of an IT outsourcing (ITO) process. However, previous methods of ITO risk assessment omit the interrelationships between the risk factors and ignore the vagueness of the evaluations. Additionally, most of the approaches fail to show the complex interactions among the risk factors with an intuitive and clear structure diagram. Thus, a new method for ITO risk assessment and visualization is developed in this paper. The proposed method integrates the advantages of improved decision-making and trial evaluation laboratories (DEMATEL) method, to incorporate the vagueness of the evaluations flexibly and evaluate the interactions and internal strengths of risk factors, and the merits of interpretative structural modeling (ISM), to clarify the risk factor structure. To illustrate the practicality and validity of this approach, an ITO case study of a mineral company is used in the implementation section to demonstrate the method.

A bilevel whale optimization algorithm for risk management scheduling of information technology projects considering outsourcing

Information Technology (IT) outsourcing can help enterprises to improve their core competitiveness and save costs. But the schedule risk in IT outsourcing process may bring huge losses. Based on the theory of distributed decision making (DDM), a bi-level multi-objective schedule risk management model is established with considering the project schedule risk and risk management cost. In addition, a bi-level Whale Optimization Algorithm (BiWOA) is designed to solve the problem and compared with the original whale optimization algorithm (WOA) and the moth–flame​ optimization (MFO). Three numerical examples are designed to test the effectiveness of the model. And the analysis of results show that it can effectively control the schedule risks of IT outsourcing projects. The influence of different preference degree of the client on the decision result is also analyzed. The effectiveness of bi-level whale optimization algorithm is proved by solving and analyzing the numerical examples. It demonstrated that bi-level whale optimization algorithm is more competitive with higher accuracy and the ability to escape from local optima and can solve the problem more effectively.

Two-level principal–agent model for schedule risk control of IT outsourcing project based on genetic algorithm

With increasing developments in the Information Technology (IT) outsourcing industry, many enterprises outsource IT services to reduce costs. However, the schedule risk of IT outsourcing (ITO) projects may result in enormous economic losses for an enterprise. In this paper, the principal–agent theory is used to control the schedule risk of ITO projects. A two-level mathematical model is built to describe the decision process of the client and vendors. With an increase to the number of subprojects and activities, the scale of the problem will become very large. The resulting optimization is an NP hard problem with continuous domain. Therefore, a genetic algorithm (GA) is designed to solve the proposed model. Experiments are performed to test the ability of the proposed algorithm. Some insights from simulation analysis – the principal–agent theory and two-level mathematical model – are suitable for describing the cooperative relationship between principle and agent. By comparing with ant colony optimization and simulated annealing, the proposed GA shows strong optimization abilities for convergence, reliability, and efficiency, which is a good tool for this kind of optimization problem. The near-optimal plan reduced the schedule risk of the project remarkably, which is the scientific quantitative proposal for the decision maker. This study provides practitioners insights on relationships of schedule risk and ITO projects, and the design model and algorithms of this paper provides practitioners effective potential method to reduce the schedule risk of ITO projects in their operations. However, the uncertain characteristics of key and multiple factors should be considered in future work. Stochastic Programming and the Monte Carlo Simulation Method are two potential tools for dealing with uncertain factors. Additionally, the proposed GA could potentially be improved in terms of convergence. The advantages of other intelligent algorithms could be applied to the GA in order to improve its searching ability, such as the Taboo mechanism.

AN ANALYSIS ON THE ROLE OF SOCIAL NETWORK STRUCTURE IN IT OUTSOURCING PROJECT REALIZATION

Information Technology (IT) outsourcing practices are increasing due to valuable strategic benefits such as cost savings, value-added activities, high quality systems, risk reduction, efficiency and competitiveness, compliance and security, and more. Today, managing the outsourcing relationship between client and vendor has become one of the significant issues to be considered for the sustainability of outsourcing interaction and the success of project outcomes. This study examines the importance of social interaction structure on project success and examines how relationship dynamics are realized between the client and vendor side through a case of “failed” IT outsourcing project. This case study puts forward the importance of IT outsourcing on project success with an interpretive analysis. In this regard, the study examines the IT outsourcing project participants’ needs, the communication dynamics and the social network model in terms of structural and tie properties; and sheds light on the hidden issues of failed IT outsourcing projects for practitioners and researchers.

Congruent patterns of outsourcing capabilities: A bilateral perspective

Despite the extensive proliferation of Information Technology Outsourcing (ITO), firms often obtain unsatisfactory outsourcing outcomes due to the lack of appropriate outsourcing capabilities of a client or their vendor. ITO clients strive to enhance outsourcing performance by establishing their own outsourcing capabilities as well as contracting with capable vendors to meet their strategic needs. Thus, for the success of an ITO project, it is imperative to find an effective combination of complementary outsourcing capabilities on both sides. However, knowledge of how to identify and develop a set of appropriate outsourcing capabilities of both client and vendor has yet to be developed. This study aims to fill this knowledge gap by elaborating on the configurational mechanisms of outsourcing capabilities from a bilateral perspective, which explicate how multiple types of client and vendor outsourcing capabilities combine into configurations simultaneously to produce high ITO performance. First, based on the ITO literature, we develop a conceptual framework that identifies three key types of outsourcing capabilities. Then, with the matched dataset collected from a client and their vendor, we conduct a fuzzy-set qualitative comparative analysis (fsQCA), which is a set-theoretic configurational method to investigate the systemic and holistic interdependencies among key outsourcing capabilities that produce high outsourcing performance. On the basis of the conceptual framework and empirical findings, we present four viable propositions to build configurations of client and vendor ITO capabilities that can achieve ITO success with theoretical and practical implications.

Two-level Tabu-predatory search for schedule risk control of IT outsourcing projects

The rapid development of the information technology (IT) outsourcing industry is making the schedule risk control of IT outsourcing projects an urgent problem which calls for study. This paper proposes a bilevel schedule risk control model using a hierarchical structure for IT outsourcing projects. The decision processes of clients and vendors at the top and base levels are described, respectively. A two-level Tabu-predatory search (TLTPS) with a two-level structure and the capability to find neighborhoods is designed to suit the hierarchical structure and the complexity of the problem. On the other hand, five other algorithms are introduced to compare with TLTPS. Numerical experiments verify the decision support effect of the proposed model and algorithm for the schedule risk control problem in IT outsourcing projects.

An Auction Approach for Cost and Schedule Management of IT Outsourcing Project

Cost and schedule management are important issues in an information technology outsourcing project. Generally, a client does not know much about market quotation and ability of vendors. Thus, an efficient approach should select a suitable vendor for the project with balanced cost and schedule. In this study, an improved standard English auction (ISEA) is designed, in which the multi-attribute situation is considered, and multi-attribute utility theory (MAUT) is introduced. A new auction protocol and a utility increment function are proposed, respectively. Finally, numerical examples are designed to demonstrate the auction process and its operation. Some insights are found: The ISEA is competent to describe the cost and schedule management process in an auction approach. The optimal incremental utility for client and vendor are found, and the proposed auction protocol is a mechanism for the client and vendor to obtain win–win results. The completely consistent results can be obtained from different size cases, which indicates that the validity of the designed auction mechanism and the effect of the utility increase function on the negotiation results.

A conduit for knowledge? demonstrating the strength of technology improvements in Indian firms that buy outsourced information technology

The literature on the role of information technology outsourcing (ITO) and on knowledge intensive business services only rarely considers purchasers in developing countries and includes few wide-scale studies. This paper reduces that gap in that it quantifies the effect of ITO on total factor productivity using a sample of 10,100 firms in India. The results show that ITO purchasing brings strong returns and outperforms in-house IT. A comparison with studies from elsewhere reveals that Indian ITO also outperforms IT in a range of circumstances in developed countries. Taken together, these findings support the idea that ITO firms, just like other knowledge intensive business services, can act as a conduit for best practices and tacit knowledge, and that this role is very useful in a developing country context. The implication is that more ITO projects would be good for catching up in developing countries. In India, policy support for the ITO sector should be re-designed to incentivise domestic work.

Differences between Clients’ and Vendors’ Perceptions of IT Outsourcing Risks: Project Partnering as the Mitigation Approach

Information technology (IT) outsourcing has been a business practice for more than two decades. Researchers have suggested successful risk management as a key factor in successful IT outsourcing projects implementation. The documented investigations, however, have mainly addressed risk management only from a single perspective of either clients or IT vendors. Considering only one perspective allows for an omission of possible risks considered critical by the other party, as suggested by agency theory. This study explored the potential perception inconsistency regarding the risks between the client and the vendor for IT outsourcing projects by using a quasi- Delphi approach. The analysis results indicated some inconsistencies in the risks perceived by the two parties: (1) the clients regarded (a) lack of vendor commitment to the project and (b) poor vendor selection criteria and process as top critical risks but the vendors didn't; and (2) on the other hand, the vendors perceived (a) unclear requirements and (b) lack of experience and expertise with project activities as significant risks but the clients didn't. Insights into how the client and the vendor perceive risks may help both parties determine how to partner and manage project risks collaboratively to succeed in outsourcing.

Significance of Supplier Selection Criteria Evolvement in IT Outsourcing to Emerging Economies – Lessons from a Global IT Outsourcing Project

In line with the increasing significance of the acceleration of information technology (IT) advancement and also of harnessing the vigor of emerging economies, IT outsourcing to emerging economies has become global concerns. This enables global companies to enjoy a critical competitive edge by choosing the best option in outsourcing strategy and supplier selection. Consequently, supplier selection criteria have become critical issues for both suppliers and customers. This paper attempts to provide insightful suggestions to these issues. An empirical analysis was conducted taking supplier selection criteria evolvement in global IT outsourcing project focusing on action research in a multinational company. Noteworthy findings include impacts of manager’s change, identification of creative moment and weighting of supplier selection criteria.

Client and Vendor Learning in Information Technology Outsourcing

This study investigates the factors influencing client and vendor learning and its downstream performance implications in Information Technology Outsourcing (ITO) projects. We propose client system development expertise and vendor project expertise, project’s strategic importance, and expectations of relationship continuity as the antecedents of client and vendor learning, and project success as its outcome. Furthermore, the moderation effects of the expectations of relationship continuity are examined on relationships of the antecedents with client and vendor learning. We test the hypotheses using data collected from 101 ITO project managers. The findings suggest overall positive impacts of the factors on client learning and vendor learning. As for the moderation effects of expectations of relationship continuity, strategic importance has a positive effect on client learning only whereas vendor project expertise has a positive effect on vendor learning only.

Identifying and Analyzing Risks and Responses for Risk Management in Information Technology Outsourcing Projects Under Fuzzy Environment

Due to ever-increasing trend in outsourcing information technology projects in today's competitive world, the risk management in information technology outsourcing (ITO) projects is a challenging issue. Hence, this paper reviews and extracts present corresponding risks by literature review to implement risk management in ITO. After reviewing a number of frameworks in the literatures related to prioritizing of extracted risk factors, a new framework is presented to determine the priority of them. Because of network structure of the proposed framework and multi-dimensional nature of the project risk, the fuzzy analytic network process (fuzzy ANP) is applied to prioritize risk factors. Also, since identifying and prioritizing of risk factors cannot necessarily meet the organization's needs related to the project risk, the ways to respond to these factors are evaluated. For this purpose, responses to the five highest ranked risk factors are considered. Prioritization of responses to these risk factors is done by applying fuzzy technique for order preference by similarity to ideal solution (fuzzy TOPSIS) based on four criteria: quality, cost, time, and scope. Results, achieved from experts' judgment, show that the risk factor "Supplier's lack of expertise with an IT operation" is the most significant. Also, the best response for this factor, is "Review of monetary value and volume of suppliers' contracts prior to their selection" according to experts' point of view. In addition, a sensitivity analysis is carried out for validating the results.

The Risk Management of Whole Life Cycle of IT Outsourcing Project

With the fierce market competition, technology development and technology innovation is also accelerating and the complexity of business opportunities and the uncertainty of management are also increasingly prominent. All of these factors put higher requirements on the IT(Information Technology) outsourcing project management. In addition, as the overall and strategic disappear in the IT outsourcing project risk management activities, a idea of whole life cycle risk management come into being. Identify and evaluate an attribute of IT outsourcing project, and the establish full life-cycle risk management model, then you can understand the information project risk management from systems perspectives.

IT outsourcing success in the public sector

Recent studies on IT (Information Technology) outsourcing reveal the growing trend and widely accepted management practice of IT outsourcing in the public sector. To achieve more from this practice it is essential to identify and examine the success factors. In this regard, this study conducts an empirical investigation on IT outsourcing projects for e-government. A framework is proposed and 13 IT outsourcing success factors from the private sector are identified through a literature review. The framework demonstrates the impact of four categories, organizational environment, contract/project characteristics, project management, and partnership management on IT outsourcing. A survey of IT managers responsible for managing IT outsourcing projects in Korean government organizations was conducted and 178 IT outsourcing projects for e-government initiated by 56 different government organizations were analyzed. The findings are then compared with general beliefs on IT outsourcing in the private sector. Findings and lessons from the empirical investigation of this study provide useful guidelines for IT managers in the public sector.

Using financial derivatives to hedge against market risks in IT outsourcing projects – a quantitative decision model

Besides the project-inherent risk of an information technology (IT) outsourcing project, related to the management of the project, other types of risk driven by the markets have not been addressed until now. Although financial derivatives are well known as a powerful tool for hedging market risk, there are no approaches to utilize this tool for risk management in IT outsourcing projects. We show a way to address two types of market risk threatening outsourcing success: insolvency of the project counterpart and a slump in prices of the counterpart’s stocks. This paper therefore provides a quantitative decision model to determine how much money should be spent on hedging these risks using financial derivatives. We discover that the lower the probability of damage the higher the degree of cheap hedging that should be applied. In contrast, other means of hedging should be considered when facing a rather high probability of damage, because financial hedging gets too expensive.

Research on Risk Early-Warning of Information Technology Outsoucing Project Based on Neural Network

Information technology outsourcing (ITO) project is a high risk project with characters of complex collaborative relationship is, high degree of creativity, uniqueness, uncertainty, large investment amount, high-tech. It is conditioned by many factors and subject to strict requirements of the employer. More and more enterprises recognize that not carrying out effective risk management in ITO project is nothing else but a "commercial suicide". Combining with the neural network model, the paper determines risk level of ITO project and risks early-warning aiming at the overall risk of ITO project. In this paper, the artificial neural network model has been analyzed. And risk level of ITO project has been confirmed. On the basis of overview of the ITO project in company S, risk early-warning model has been established with a case. The author believes that risk early-warning model would be beneficial to the overall efficiency of risk management of ITO project.

Complementarity between client and vendor IT capabilities: An empirical investigation in IT outsourcing projects

This study investigates the direct and complementarity effects of client and vendor Information Technology (IT) capabilities on the success of IT outsourcing. Concretizing the concepts of client and vendor IT capabilities from the resource-based view, we emphasize the importance of complementarity in IT outsourcing. It was hypothesized that the complementarity between client and vendors IT capabilities adds value to outsourcing success beyond their individual effects. We also hypothesized that the increase rate of complementarity is higher when the IT capability levels of both parties are similar (i.e., either high or low) than when those of both parties differ. The proposed hypotheses were tested by using 267 client–vendor matched data, in which client IT capability was measured by members of vendor firms and vice versa. Results indicate that client and vendor IT capabilities are significant factors in outsourcing success and that the complementarity between client and vendor IT capabilities significantly influences outsourcing success. The increase rate of complementarity is higher when the IT capability levels of both parties are similar than when those of both parties differ. The results help deepen our understanding of the bilateral perspective of outsourcing success and support managers in making better outsourcing decisions in selecting clients and vendors.