IT Outsourcing Partnerships Research Articles

A Combined Model of IT Outsourcing Partnerships and Success

INTRODUCTION Globalization provides organizations with more options than ever before. Business leaders are continuously encouraged to adapt, reevaluate, and strategically improve processes and approaches. Best practices are reinvented rapidly in an attempt to keep up with market trends. The quest to recognize new methods for increasing revenue has become the inspiration for exploring new management techniques and strategies. Outsourcing is a trend that continues to rise, especially in global markets. Common purposes for include improvements to performance, cycle time, cost-savings, market share, productivity, customer service, and quality (Elmuti & Kathawala, 2000) in industries such as information systems/technology, human resource, logistics and administrations, real estate, transportation, marketing, sales and finance (Logan, Faught, & Ganster, 2004). Outsourcing benefits are publicized and cited in business journals and among professional management circles, leading to the commonly held perception that holds the key to cutting costs and maximizing productivity. What is less commonly understood, however, are the underlying relationships that exist between partners and how the quality of this relationship impacts success. Outsourcing is a strategy whereby companies decide to utilize outside resources for activities that were previously accomplished using internal staff and resources (Elmuti, 2003). As global supply markets have continued to increase, businesses now have the opportunity to reassess which functions are best to remain in-house and those that are suited best for (Barthelemy & Adsit, 2003). Most often, the purpose of such a decision is a strategy to reduce cost, improve service, and allow management more time to commit to activities more directly tied to the firm's core strategic goals (Logan et al., 2004). Outsourcing, however, is not without its challenges. In fact, 75% of U.S. managers admitted that outsourcing initiatives do not necessarily fulfill all their (Barthelemy & Adsit, 2003, p. 87). Furthermore, 55% of relationships fail within the first five years of implementation and, of the remaining 45%, 12% are unhappy and regret the decision to outsource in the first place (Elmuti, 2003). To add to these bleak statistics, it is often the case that customers express dissatisfaction with the decisions as well. Inevitably, a host of factors plays into the lack of success in endeavors. Many IT companies consider as a quick fix budget cut and select offshore vendors on the basis of cost alone. Although savings can be made by outsourcing, it takes a great deal of effort to have a quality relationship and a successful outcome. Many companies often fail to realize that offshore encompasses much more than just the hope to reduce operating costs. Despite the potential benefits, reductions in costs are often unmet and a growing trend toward backsourcing is taking place despite the penalties and costs associated with bringing a process back in-house (Benaroch, Webster, & Kazaz, 2012). According to project statistics from Aberdeen Group (Drodenbaugh, 2010, paras. 8-10): Reducing IT costs is the primary driver behind for 82% of companies in the U.S. But, as Aberdeen continues, * Nearly 50% of outsourced projects fail outright, or fail to Meet expectations * 76% of companies said that vendor management effort and costs were much higher than expected * 30% reported ongoing issues with outsourcer management processes (e.g., inadequate governance and conflict resolution procedures) * 51% reported that outsourcer was not performing to expectations In the end, the average cost savings for projects was a mere 26%. With strategies on the verge of becoming saturated and a continued pressure on profit margins, service providers are building even more innovative and often riskier engagement models, including joint ventures, business-outcome based pricing, revenue-sharing arrangements, and dedicated centers of excellence. …

Knowledge transfer and utilization in IT outsourcing partnerships: A preliminary model of antecedents and outcomes

We developed a nomological network of antecedents and outcomes of knowledge transfer and utilization in IT outsourcing relationships, and tested it using a survey of 146 IT outsourcing partnerships in Singapore.Our findings showed that the characteristics of outsourcing clients, vendors, and knowledge transferred played important roles in facilitating knowledge transfer; the transferred knowledge in conjunction with the knowledge integration mechanisms affected knowledge utilization in client-firms, and that this generated significant operational and strategic performance gains in IT operations. Our findings can aid practitioners determine how to use outsourcing to improve knowledge management in their organization.

Health Information Systems New Shifts and Emerging Trends in Health IT Infrastructures

Summarize excellent current research in the field of Health Information Systems. Synopsis of the articles selected for the IMIA Yearbook 2009. Five papers from international peer reviewed journals have been selected for the section on health information systems. They concentrate on topics such as personal health records, the comparison of IT infrastructures in hospitals from different countries, hospital to hospital IT outsourcing partnership, and the wireless monitoring of patients. The elected articles highlight the new shifts in health information management and challenges faced by hospitals regarding IT infrastructures.

Predictors of Formal Control Usage in IT Outsourcing Partnerships

Client control over the vendor has been identified as a critical factor in successfully managing information technology outsourcing relationships. Though prior studies have suggested that “how much” control is exercised has significant ramifications for individuals and firms, relatively few studies have operationalized and studied this important concept. In this study, we define the amount of formal control as the variety of mechanisms used by a client to exercise control over a vendor and the extent to which the mechanisms are used. We use literature on transaction cost economics and organizational control to build a model of the antecedents of the amount of formal control. The study uses data from 138 client-vendor matched pairs working in eight large, long-term, ongoing outsourcing arrangements to test specific hypotheses. The results suggest that clients who have technical or relationship management knowledge, or have high levels of trust in their vendors, use formal control mechanisms to a lesser extent. On the other hand, task uncertainty was found to be positively associated with the amount of formal control, and the degree of core competency involved in the outsourced activity was not found to be related to the amount of formal control. These results are discussed, and implications for research and practice are drawn.

A Framework for Global IT Outsourcing Management: Key Influence Factors and Strategies

The key focus of this article is to provide an understanding about the complexities involved in global IT outsourcing and the management initiatives needed for the successful implementation of a global IT outsourcing partnership. Technological advances combined with increased globalization and competitive pressures have forced many firms to consider alternatives that will reduce organizational cost, and at the same time create and/or maintain their competitive advantage in the global market. Increasingly, the phenomenon of global outsourcing is being considered by many firms as a solution to their IT needs and problems. With increasing recognition and confidence in the programming competencies of IT workers in India and other countries, offshore outsourcing has gained increasing acceptance among U.S firms across all industries.Even though there has been a plethora of studies on domestic outsourcing of information systems, the research on outsourcing outside national borders (global outsourcing) has been scarce. One of the areas which lacks depth in the literature is in how to manage a global outsourcing partnership. Anecdotal evidence points to the fact that even the best outsourcing deals can go sour if not managed properly. In the context of global IT outsourcing, the management of the outsourcing relationship becomes even more complex because of the geographical distance and the difference in the national and organizational cultures of the client and vendor firms. This article identifies the key elements that should be considered while managing an outsourcing relationship with a foreign’ vendor and the role the manager should play in a global outsourcing context.