IT Outsourcing Projects Research Articles

How Can IT Outsourcing Projects Benefit From Big Data Availability?

Despite the increasing importance of big data, the issue that how firms can benefit from big data availability is lack of research attention. Addressing this gap, this paper investigates the effect of big data availability on IT outsourcing project performance and also how the effect varies with a vendor’s project leadership and an outsourcer’s control. Based on absorptive capacity theory, we developed hypotheses and examined them with data from 284 IT outsourcing projects. The results show that big data availability has a positive effect on IT outsourcing project performance. Furthermore, a vendor’s transactional leadership weakens while transformational leadership strengthens the effect of big data availability. An outsourcer’s behavior-based control weakens while outcome-based control strengthens the positive effect. This paper contributes to existing literature by showing how big data availability can enhance IT outsourcing project performance with different vendors’ project leadership and outsourcers’ control mechanism.

The Client and Service Provider Relationship in IT Outsourcing Project Success

The role of organizational attitude for an effective knowledge sharing (KS) in IT outsourcing (ITO) relationships has not been adequately addressed. In this paper, we investigate the relationship between KS and ITO success as well as the potential moderating effect of organizational attitude on the relationship between KS and partnership quality in ITO. By leveraging structural equation modeling (SEM) on survey data from 153 ITO projects, results show that organizational attitudes significantly influence knowledge sharing and partnership quality, which in turn, results in successful ITO project. Moreover, the relationship between knowledge sharing and partnership quality is more pronounced when the partner firms have positive attitudes to KS. We further showed that partnership quality mediates the relationship between knowledge sharing and the success of an ITO project. Finally, the results of this study indicate that positive organizational attitude improves knowledge sharing between the client and service providers (i.e vendors), and creates stronger outsourcing partnerships.

Auctioning IT Contracts with Renegotiable Scope

Motivated by challenges facing IT procurement, this paper studies a hybrid procurement model in which a reverse auction of a fixed-price IT outsourcing contract may be followed by renegotiation to extend the contract’s scope. In this model, the buyer balances the needs to incentivize noncontractible vendor investment and to curb the winning vendor’s information rent by choosing the initial project scope and the buyer’s investment in the quality of the project. We find that a buyer may benefit from inducing ex post renegotiation to motivate vendor investment, especially when the winning vendor has high bargaining power and the quality uncertainty is low. Broadening the initial scope reduces information rent but leaves little room for ex post renegotiation and, hence, discourages vendor investment, whereas increasing the buyer’s investment has opposite effects. Interestingly, the two measures can be strategic substitutes or complements depending on the likelihood of the renegotiation and the two parties’ bargaining powers. The buyer may strategically set a low initial project scope and high investment to incentivize renegotiation and vendor investment, which may explain why many IT outsourcing projects start small and allow expansions. Our findings also generate several testable predictions for IT outsourcing. This paper was accepted by Kartik Hosanagar, information systems.

Impact of Vendor CMMI Capability on User System Success Perception and Its Interaction With Trust in an IT Outsourcing Project

The study investigated relationship between Capability Maturity Model Integration (CMMI) capability of the vendor and user system success perception in IT outsourcing projects. Interaction between trust and CMMI-system success perception relationship was also investigated. Data was collected from IT professionals with background in both CMMI and IT outsourcing. Results reveal that while CMMI had no impact on a user’s system success perception, trust did significantly interact with the relationship between vendor CMMI capability and user system success perception.

The Impact of Trust and Reciprocity on Knowledge Exchange: A Case Study in IT Outsourcing

The aim of this study is to analyse the mechanisms of trust and reciprocity that impact knowledge exchange in IT outsourcing projects. This study develops a framework that shows the impact of the trust and reciprocity components on knowledge sharing and IT outsourcing projects. IT outsourcing represents the way in which a company can accelerate the achievement of its goals by handing over all or some of its IT services to vendors. This study adopts a social exchange theory perspective. The conceptual model has been developed based on Wong and Cheung’s (2005) trust categories (Partners’ Performance, Partners’ Permeability, Relational Bonding, System-based Trust) and Cohen & Bradford’s (1989) exchange currencies model (Task-related Currencies, Position-related Currencies, Relationship-related Currencies, Personal-related Currencies). In this study, the researcher applied a single-case study qualitative approach combined with a core action research methodology covering three action research cycles. The researcher collected the data using two types of interviews: semi-structured and focus group interviews. The total number of conducted interviews was 45, covering managers, team leaders, and IT technical staff. Computer Aided Qualitative Data Analysis Software (CAQDAS) was used to analyse the collected qualitative data. The study was a good chance for the researcher and participants to apply action research methodology for the first time in the organisation. An action research co-generative knowledge creation module was applied to provide a workable solution for the identified study question. Four factors were found to make a significant contribution to reciprocity: a well-designed contract, client capability, operational readiness, and the client-vendor relationship. Four elements were found to have a significant impact on building mutual trust between the client and the vendor: a well-designed contract, vendor capability, transparency, and communication. The study found that two factors can assist in increasing the level of trust and the vendor’s strengths during the IT outsourcing process. Those two assisting factors are external consultant support (in the contract negotiation phase) and top management support (in the contract implementation phase). The main contribution of the study is the conclusion that both reciprocity and trust must be combined to have effective knowledge transfer. Trust and reciprocity are not one single factor, however; each is a category with associated subcategories. Outsourcing contracts and vendors’ good intentions are not in themselves enough to achieve the outsourcing targets. The salient outcomes of the study are the realisation of the importance of having skilled resources on the client’s side, and that these resources must not be used only to monitor the vendor; rather, the client must have a plan to engage and integrate those resources with the vendor’s activities. The study also advises the client’s management to consider the contract as a means to IT outsourcing success and not an end in itself. A continuous effort is needed during the project to achieve the company’s targets and to overcome any gaps in the signed contract.

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.

Impact of Relational Management and Culture on System Success Perceptions in an IT Outsourcing Project

This study investigates whether trust between user and vendor can lead to formation of system success perception in the mind of the user in an IT outsourcing project. Further, the impact of culture in the form of user power distance index on the relationship between trust and user system success perception is tested. Results confirm that trust can lead to formation of system success perception, however, culture in the form of user power distance index was not found to impact the relationship between trust and user system success perception.

Project Management Method Adoption

The purpose of this research is to understand what aspects of brand-named project management method (Project Management Institute - PMI) have been adopted in a service organization and how. The case context examined demonstrates how a weak-matrix organizational structure and agency interpretation along with project management maturity for IT outsourcing projects can affect adoption of a project management method. An interpretative case study is employed for examining the interplays among key notions underlying project management method adoption in IT outsourcing projects. The case study is framed with a research logic constituting the underlying notions of method adoption: the context, the agency, and the method and its fragments. It is found that the organization realizes 43 out of 47 processes proposed by PMI. It is also observed that the perceived project management maturity level is not aligned with the method fragments adopted. Among other discussion points, the present findings contribute to the existing literature by emphasizing the effects of management control on PM method adoption in IT outsourcing. Furthermore, this case allows us to argue that product-focused orientation in project management method adoption is evident and has several implications. The adoption and adaptation of processes in different types of projects is on the authors' future research agenda.

Simulated Annealing Genetic Algorithm Based Schedule Risk Management of IT Outsourcing Project

IT outsourcing is an effective way to enhance the core competitiveness for many enterprises. But the schedule risk of IT outsourcing project may cause enormous economic loss to enterprise. In this paper, the Distributed Decision Making (DDM) theory and the principal-agent theory are used to build a model for schedule risk management of IT outsourcing project. In addition, a hybrid algorithm combining simulated annealing (SA) and genetic algorithm (GA) is designed, namely, simulated annealing genetic algorithm (SAGA). The effect of the proposed model on the schedule risk management problem is analyzed in the simulation experiment. Meanwhile, the simulation results of the three algorithms GA, SA, and SAGA show that SAGA is the most superior one to the other two algorithms in terms of stability and convergence. Consequently, this paper provides the scientific quantitative proposal for the decision maker who needs to manage the schedule risk of IT outsourcing project.

The Evolution Process on Information Technology Outsourcing Relationship

Information technology outsourcing relationship is one of the key issues to IT outsourcing success. To explore how to manage and promote IT outsourcing relationship, it is necessary to understand its evolution process. Firstly, the types of IT outsourcing based on relationship quality and IT outsourcing project level will be analyzed; Secondly, two evolution process models of IT outsourcing relationship are proposed based on relationship quality and IT outsourcing project level, and the IT outsourcing relationship evolution process is indicated; Finally, an IT outsourcing relationship evolution process model is developed, and the development process of IT outsourcing relationship from low to high under the internal and external power is explained.

Effects of Human Factor on the Success of Information Technology Outsourcing

Information technology outsourcing is one of the factors affecting the improvement of flexibility and dynamics of enterprises in the competitive environment. Also the study of the factors affecting its success has been always considered by business owners and the area of research. Professional experiences and research results consider that the success of IT "Information technology" outsourcing projects relates to the effective knowledge transfer and human factors. The human factors are influenced by the cultural and environmental context of the inside and outside of the organization. Hence, it is necessary to study the effectiveness of these variables in different cultural environments. This study investigates the effect of human factors including the customer motivation and vendor willingness on the success of IT outsourcing projects. For this purpose, the research hypotheses were developed and analyzed by the structural equation method. The result of a field study among 94 companies and organizations show the difference of the findings of this study with earlier findings in other countries. Based on the findings, the client motivation does not affect the knowledge transfer but the vendor willingness affects the customer motivation to knowledge transfer. This result can help the business owners to take appropriate approaches for achieving success in IT outsourcing projects.

The Influence of Familiarity within Teams on the Performance of IT Outsourcing Projects

The influence of familiarity within project teams on project performance has been analyzed quite extensively in literature. However, it remains unclear how the concentration of familiarity among th...

Emergence of common tacit knowledge in an international IT project

Purpose– The purpose of this paper is to examine knowledge processes in an international IT outsourcing project between two countries when knowledge is transferred from one country to the other due to business situations. A theoretical model is presented regarding knowledge processes in international projects which explains emergence of international common understanding as one of the solutions for knowledge-related challenges in international projects.Design/methodology/approach– The empirical study was conducted at the headquarters of a chemical company in Japan and its subsidiary in Singapore. The study employed a qualitative analysis method. Interviews were conducted in these companies and the results were analyzed according to grounded theory.Findings– The authors propose ARC Model of Knowledge Management in International IT Outsourcing Projects, which is a new theoretical model of project knowledge management in international settings, with a view of localization into knowledge processes. International common understanding will emerge from an understanding of thinking of each locale that brings a project to a successful conclusion.Research limitations/implications– This research might be subject to limitations regarding the data and results. Data were collected from particular companies, thus reducing the ability to generalize the results. Further research is required to verify the model with an additional empirical study.Practical implications– Project managers and other managers utilize the theoretical model as a base theory for the implementation of high quality localization that is managed by the locals themselves with common knowledge.Originality/value– The study proposes the theoretical model with the empirical analysis of the international project, which synthesizes project knowledge management and cross-cultural knowledge management in a novel way and expands the role of knowledge management.

IT outsourcing in the public sector: a conceptual model

Purpose– The purpose of this article is to propose a theoretical model explaining information technology outsourcing performance in the public sector as well as a set of empirically testable propositions to improve the understanding of key determinants of success.Design/methodology/approach– Based on Fountain ' s technology enactment framework, the authors integrated inter-organizational factors, such as trust, knowledge sharing, and quality of outsourcing interfaces, in the model and added organizational culture alignment between service providers and public administration to enhance Fountain ' s original framework.Findings– The authors proposed 17 empirically testable propositions to establish the relationships between key variables in IT outsourcing projects in the public sector.Research limitations/implications– The proposed model provides guidance for future research aimed at advancing knowledge of IT outsourcing.Originality/value– The contribution lies in the development of specific variables, such as trust, knowledge, and organizational culture, which are related to building an outsourcing relationship and are used as determinants of the quality of organizational interfaces between public bureaucracies and IT outsourcing providers.

Lock-in risk in IT outsourcing projects: mechanism and mitigation system

There are papers studying on ‘what’ lock-in risk is which is the primary risk and the greatest concern in managing IT outsourcing projects. This paper provides an insight into the mechanism and the effectiveness of mitigation system on lock-in risk, namely, studies ‘why’ and ‘how’. Based on transaction cost theory, it instructs the mechanism of what lead to lock-in risk, discusses the relationship between risk drivers such as asset specificity and lock-in risk. Accordingly, it analyses the principle of mitigation system on risk drivers. With the analysis of the two mechanisms mentioned above, the lock-in risk can be controlled both forward forecasting and backward tracing, which enhances the effectiveness and reliability of risk management.

Structured Role Based Interaction Model for Agile Based Outsourced IT Projects: Client’s Composite Structure

Structured Role Based Interaction Model for Agile Based Outsourced IT Projects: Client’s Composite Structure

IT Outsourcing in the Public Sector: A Literature Analysis

This article presents an analysis of geographically and disciplinary scattered academic publications on ITO in public organizations. The interdisciplinary scope of public ITO research area is defined, and conceptual approaches of IS and Public Administration research fields to public ITO are compared. Highlighting the impact of certain organizational characteristics on ITO decisions, governance and results makes a contribution to ITO research in general. Consolidation and analysis of diverse findings will benefit both public officials and outsourcing vendors. Finally, the study suggests directions for future research. Discussion on control in outsourced IT projects can be found in the literature belonging to several research disciplines.

Effects of initial and ongoing trust in IT outsourcing: A bilateral perspective

Much has been written about the need for trust in outsourcing relationships, but the literature has produced only a few theoretical models that explain the process that helps it evolve. We proposed a theoretical model by distinguishing ongoing beliefs, such as ongoing trust and distrust, from initial perceptions, such as initial trust and distrust, in the context of IT outsourcing, and then explored empirically how these interacted with one another the knowledge sharing experience between the participants, thus leading to a successful experience from both the outsourcer and the service provider. The model and its hypotheses were tested using two-stage survey data collected from IT outsourcing projects. Our results showed that the ongoing trust and distrust between the receiver and provider were crucial in attaining benefits and that the outcome was also affected by the perceptions of the participants at the initial stage of the outsourcing process. We also found that knowledge-sharing experience between the parties moderated the impact of initial trust or distrust on the ongoing trust or distrust in different ways: the change in the service provider's initial perceptions were apparently more visible and positive than those of the service receiver's, although both initial perceptions tended to be cognitively consistent. These results helped us understand how trust evolves over time in an outsourcing relationship, and enabled us to explore the different viewpoints of the service provider and receiver.

The role of IT human capability in the knowledge transfer process in IT outsourcing context

Our research attempted to identify the behavioral process of knowledge transfer by examining the effects of IT human capability, human character, trust, and cooperative learning on it in an IT outsourcing situation. By analysing data collected from vendor and client matched-pair samples of 87 IT outsourcing projects, we found that both the client's and the vendor's character influenced trust, trust affects on cooperative learning, and the cooperative learning influence on knowledge transfer. More importantly, it we found that the client's IT human capability had a direct impact on cooperative learning and knowledge transfer. This indicated that client's IT human capability was a crucial factor in effective knowledge transfer during IT outsourcing. It also implied that client firms should identify and retain some IT personnel who can apply vendors’ competencies in IT practice and respond effectively to any technological challenges.

Innovation in IT outsourcing relationships: Where is the best practice of IT outsourcing in the public sector?

In recent years IT outsourcing has evolved from a formal contractual-based practice to a relationship-based practice. This new practice is viewed as an innovation in IT outsourcing in the public sector. The main goal of this study is to conduct an empirical investigation on IT outsourcing projects in the public sector to examine the best IT outsourcing practices from the relationship perspective. A four outsourcing relationship types (FORT) framework is applied to 178 IT outsourcing projects initiated by 56 different government organizations in Korea. Data shows that the best practice of IT outsourcing in the public sector can be achieved when strategic impact of the outsourced IT is highest and the extent of substitution by the vendor is large but not fully substituted. This finding can be explained in terms of government organization’s fear of loss of control and conservative organizational culture.