Information Technology Outsourcing Vendor Research Articles

How it outsourcing impacts on value creation of manufacturer?

A growing concern among the manufacturers who are actively involved in Information Technology outsourcing is post-contract management and the ensuing development of what many practitioners have coined the ‘outsourcing partnership’. Over the past few decades, information technology outsourcing has become a widely used and researched means for manufacturers to enhance their performance. Increasing attention has been paid to building successful partnerships in information systems outsourcing. This study employs strategic social positioning, customer participation, customer orientation, and communication culture to develop research model. The quantitative method will be used to validate the research model and test hypotheses developed. This study uses survey method to collect data, and analysis of the reliability, validity and test the proposed hypotheses by Smart Partial Least Squares. The purpose of this study is to use above four factors to produce value co-creation between outsourcing vendors and manufacturers. The final aim is for the future collaboration. This combination will allow manufacturers and information technology outsourcing vendors to increase their value co-creations in the fields of these factors.

IT outsourcing intent in academic institutions in GCC countries

Purpose – The purpose of this paper is to understand the reasons behind the intent for information technology (IT) outsourcing in academic institutions in GCC countries. It also aims to develop a multi-criteria decision model (MCDM) to aid the critical decision of IT outsourcing vendor selection. Design/methodology/approach – The research utilizes a questionnaire-based survey to investigate reasons of IT outsourcing intent and the factors considered important for IT outsourcing vendor selection in academic institutions. The results of questionnaire-based study were utilized to develop a grey theory-based MCDM for vendor selection. Findings – The results show that facilitating access to new technology, focus on core-competence, saving staff costs, and improved customer service are the most important factors for IT outsourcing intent while reputation of vendor, access to the state of art technology, quality of service, and knowledge of industry were considered as the most important factors for IT outsourcing vendor selection. Grey theory-based decision model was applied to a real case to facilitate the decision of selection of an IT outsourcing vendor. Practical implications – Academic institutions that plan to outsource IT in future would be the major beneficiaries of this study. They can utilize the multi-criteria model to select the best vendor. The model facilitates a more rational decision making as it incorporates several criteria considered important for IT outsourcing vendor selection. Originality/value – This study contributes to the body of research on IT outsourcing. It is first of its kind with its focus on academic institutions in GCC countries where currently education is a priority and IT is a backbone for its delivery. Another novelty of this research is that it propose a MCDM for IT outsourcing vendor selection. The findings of this study would serve as a guide to those institutions that intend to outsource IT functions to meet the ever growing needs of managing IT effectively.

Governance structure in IT outsourcing: a network perspective

Purpose– The governance of information technology outsourcing (ITO) has been identified as an essential determinant for ITO success. Prior studies have shed light on effective governance structures in different organizational contexts. This study aims to advance this prior knowledge by exploring how interpersonal networks, as an important aspect of such context, reflect and influence ITO governance.Design/methodology/approach– A single case study was conducted from a vendor’s perspective in an ITO dyad. Social network analysis was leveraged to reveal the interpersonal networks, with whole-network analysis on 24 team members in an ITO vendor company. In addition, open-ended interviews with six selected team members were utilized to identify the perceived governance structure.Findings– The findings of this study suggest certain features of interpersonal networks, i.e. network density and cross-network comparison, can reflect governance structure in multiple aspects. Meanwhile, the authors also argue that interpersonal networks can influence the form of governance structure.Research limitations/implications– As a single case study, the context of the research site cannot be ignored in the inference of findings. To increase the confidence for further generalization, future empirical studies are needed especially in contrasting sites, such as ITO relations based on network governance.Originality/value– This study associates intra-organizational characteristics of the vendor to the inter-organizational governance structure of the ITO relationship. It also provides an innovative methodology for both researchers and practitioners to assess ITO governance structure.

Keeping Up with the Joneses: Imitation of Service Capabilities by IT Outsourcing Vendors

Information technology (IT) services vendors operate in a highly competitive but also institutional environment that render their service-line offerings mutually observable. This suggests that imitation of rivals’ decisions can be an efficient means for IT vendors when reconfiguring their service-line offerings. To explore how such imitation unfolds in this sector, we estimate a series of logistic regression models of 116 IT vendors’ service-line choices over three time periods. First, from the strategic imitation literature we identify the key imitation ‘referents’, which is a group of firms or a single firm with specific traits, and we test the relative influence of each referent. All our analysis includes these referents as predictors of service-line choice. Next, we tested more nuanced models using theoretically-guided subsamples as follows. One, based on IS literature, we consider the IT vendors as embedded in three distinct ‘institutional spheres’, each corresponding to a knowledge domain - namely, technical, functional and vertical industry domains. We separately examine imitation in each subsample corresponding to the services lines within each knowledge domain. Two, based on strategy literature, we consider that the influence of the imitation referents differs when the choice under consideration is the addition of a new service-line versus a withdrawal. Our results across all these subsamples uncover a nuanced pattern of imitation which sometimes contrasts the full-sample results. The most prominent result is that although imitation is highly salient, the different imitation referents are not universally influential across all knowledge domains and between development versus withdrawal decisions. Specifically, the imitation of similar firms is widespread while the imitation of largest firms or offering popular service-lines, which indicates bandwagon effects, are at play only selectively. This study contributes to the IS literature by laying a basis for a variety of research directions including resource spillovers and vicarious learning in IT sectors.

Competitive Potential of Micro-sized IT Outsourcing Vendors in a Small State of the European Union: A Case of Malta

Information Technology (IT) outsourcing becomes an increasingly popular phenomenon among business practitioners who seek services and/or products of third party suppliers to meet their in-house IT needs. It offers a business opportunity for IT outsourcing vendors, which, from a competitive potential perspective, may be challenging when such organisations are micro-enterprises (employing not more than ten employees) and operate from Malta a developing micro island state in the Mediterranean and a constituent part of the European Union. This paper tests the notion of competitive potential as posed by the Strategic Alignment Model (SAM) of Henderson and Venkatraman (1993), within such particular context. Through the SAM, competitive potential is viewed as a strategic co-alignment of a firm’s business strategy, IT strategy and organisation infrastructure. A best fit model which positively asserts such a notion is derived from Structural Equation Modelling (SEM) that is applied to data collected from a survey amongst the Maltese IT outsourcing micro-enterprises. The model is validated and confirmed through a Case Study involving six micro-enterprises. The paper indicates the strategic alignment of competitive, organisational and strategic factors, which, albeit not often explicit, are highly active in IT outsourcing micro-enterprises. It also indicates that competitive potential in the IT outsourcing micro-enterprises is a dynamic capability that evolves out of a well conceived business strategy, IT strategy and organisation infrastructure which seek to exploit existing competitive potential and compensate for resource constraints whilst seeking to deliver IT service and/or product through outsourcing arrangements.

An Evaluation System for IT Outsourcing Customer Satisfaction Using the Analytic Hierarchy Process

Many companies recently have been choosing information technology (IT) outsourcing in response to complicated information systems and various internal requirements. In order to monitor and maintain a high quality of IT outsourcing vendors’ services, it is necessary to develop a system to evaluate IT outsourcing customer satisfaction. The system can be used as a tool for choosing IT outsourcing providers. Through the literature reviews and expert interviews, we propose the evaluation system of the IT outsourcing customer satisfaction. Using AHP (analytic hierarchy process) technique, attributes associated with customer satisfaction in IT outsourcing environments are then rated in terms of their importance. The customer satisfaction evaluation system is applied to IT outsourcing service receivers in Korea to demonstrate its practical implications.

From the Vendor's Perspective: Exploring the Value Proposition in Information Technology Outsourcing

To date, most research on information technology (IT) outsourcing concludes that firms decide to outsource IT services because they believe that outside vendors possess production cost advantages. Yet it is not clear whether vendors can provide production cost advantages, particularly to large firms who may be able to replicate vendors' production cost advantages in-house. Mixed outsourcing success in the past decade calls for a closer examination of the IT outsourcing vendor's value proposition. While the client's sourcing decisions and the client-vendor relationship have been examined in IT outsourcing literature, the vendor's perspective has hardly been explored. In this paper, we conduct a close examination of vendor strategy and practices in one long-term successful applications management outsourcing engagement. Our analysis indicates that the vendor's efficiency was based on the economic benefits derived from the ability to develop a complementary set of core competencies. This ability, in turn, was based on the centralization of decision rights from a variety and multitude of IT projects controlled by the vendor. The vendor was enticed to share the value with the client through formal and informal relationship management structures. We use the economic concept of complementarity in organizational design, along with prior findings from studies of client-vendor relationships, to explain the IT vendors' value proposition. We further explain how vendors can offer benefits that cannot be readily replicated internally by client firms.

Constructing customised models and providing information to support IT outsourcing decisions

Information technology (IT) outsourcing is a favourable option for enhancing core organisational competencies/activities. Provident decision making in selecting an optimum IT outsourcing vendor involves judgements about qualitative and quantitative factors. The paper discusses IT outsourcing and proposes a customised computer‐orientated model based on action research and analytical hierarchy process. The aims are to: specify, combine, structure, measure and prioritise key qualitative and quantitative risk elements in IT outsourcing; and provide relevant information to support managers in outsourcing decision making. The results are expected to help managers in minimising business risks and in improving quality of IT outsourcing.