Outsourcing Environment Research Articles

Investigating the Sensemaking Process in a Global IT Outsourcing

In this research, we draw on sensemaking theory to analyze the how employees of a global corporation involved in the provisioning of company-wide IT services cope when confronted with unexpected events related to distant colleagues. Using a critical incident technique to collect data, we examine the processes of sensemaking in a global offshore outsourcing environment. We construct narratives and fabulas of each incident to perform data analysis using a process theory building approach. Our findings suggest sensemaking in a complex global environment is an iterative process that includes a recognition phase, a deliberation phase, and a resolution phase. We identify conditions that lead to successful sensemaking acts in this environment, as well as discursive strategies enacted by employees and sensemaking process facilitators.

Enhancing the Interactions in an Engineering Job Outsourcing Environment (B2B System) with Composite Web Services

among the various departments of an organization and the ancillary units has been geographically distributed and the coordination has become more complicated. Web-based services with service-oriented paradigm enable flexible and dynamic interoperation of autonomous software units. Service oriented architecture can be realized with web services as the low level building blocks and higher level services can be composed with the Business Process Execution Language. In this paper, effective interaction among the various departments of an organization and the ancillary units is studied and a solution based on composite web services is proposed. Intricacies involved, issues connected with this type of composition will be studied with reference to engineering job outsourcing environment. This study provides orchestration mechanism which leads to composition of new higher level abstract services.

Extending the “size matters” debate

PurposeThe purpose of this paper is to examine the factors that influence training decision making in small and medium enterprises (SMEs) in India's IT‐enabled business process outsourcing industry.Design/methodology/approachThe research strategy employed is a case study. Data from semi‐structured interviews, organizational documents, and non‐participant observation are analysed.FindingsThe inclusive theoretical approach uncovers novel explanations through the complex interaction that occurs between various internal and external factors that shape the nature and extent of training provision in SMEs in the context of a developing country. In SMEs, enterprise training can take a variety of forms – formal, informal, and incidental. The final training provision is shaped by high employee turnover, the complexity of the process, client specifications, and the presence of certain organizational capabilities.Research limitations/implicationsAlthough a multi‐case embedded design was followed, the results and findings cannot be generalized to a wider population. Findings are generalized to the literature on the drivers of training.Practical implicationsThe paper's findings allow practitioners to utilize scarce resources effectively, particularly for where SMEs are operating in a dynamic outsourcing environment.Originality/valueThis paper extends the current academic and policy discourses on formal and informal training in SMEs by reporting findings from a new context – India's dynamic outsourcing environment. Novel explanations are offered of how SMEs that outsource business process offshore meet their skill development needs.

Research on Supplier Collaborative Product Development Mechanism under Condition of Manufacturing Outsourcing

The pressure of financial turmoil and global competition drive domestic manufacturers to seek additional profit space besides low-cost labor and raw materials so that they could gain more competitive strength than the other companies in the world. The article maintains that in the manufacturing outsourcing environment domestic manufacturers could effectively reduce cost, shorten R&D cycle time and improve product quality in the manner of collaborative product development with outsourcing suppliers. With supply chain management and synergy theory, the article makes analysis of the definition for supplier collaboration, and then summarizes main activities of collaborative product development including specification, concept design, detail design and product design. Meanwhile, collaborative product development shall satisfy 6 key preconditions. Based on this, the article brings forwards the mechanism of collaborative product development, which is concerned with 5 phased key activities and collaborative manner from customer requirement to initial operational testing. Eventually, predict that collaborative mechanism need to be further analyzed under industry background From the beginning of the 21st century, the variation of macroscopic and microscopic environment that the global industrial field has faced was far fiercer and much more difficult to forecast than ever before. Now mass manufacture can only be accomplished by close cooperate with outsourcing partners, because of the new globalized manufacture network is becoming more and more digitized, decentralized, virtualized, intellectualized and agile. In last few decades, Chinese production has won innumerable outsourcing orders by the advantage in low cost and flexibility, which built a solid foundation of the trade surplus of China. However, in the past two years, because of the financial crisis, RMB appreciation, prices of raw material shy rocketed, and the rigorous quality and service requirement which customers always asked, the profit margin of Chinese manufacturing businesses become much smaller than ever. If these manufacturing companies keep going as before, the existing advantage they have would be soon eroded. Therefore, from ideality of supply collaborative, if these outsourcing companies can build a close relationship actively with their supplies who could significantly affect the total cost of these outsourcing companies, by using the advantages and experience these supplies have, they can design products cooperatively, save cost from the beginning, shot the development stage, and create a significant positive impact on the price and quality of the end products of these outsourcing companies

The antecedents of process integration in business process outsourcing and its effect on firm performance

As service processes become candidates for outsourcing, interest in the global business process outsourcing (BPO) industry has grown considerably. In this study, drawing on information processing theory, we examine the role of integration in BPO and its effect on BPO firm performance. BPO Integration is concerned with the overall coordination of business processes and activities across different units within the outsourced environment. It involves both internal process integration – effective integration of task execution within the BPO and external process integration – effective integration between the BPO and their clients. Using survey data gathered from 205 Indian BPO service providers, we analyze the antecedents of process integration and its impact on BPO performance. The antecedents we examine are task complexity, task security, end customer orientation of the client and IT capability of the BPO. Among other results, we find that both internal and external process integration partially mediate the impact of the antecedents on performance. We draw managerial implications of our research to practicing BPO and client managers on how BPO outsourcing can be made successful.

Efforts and efficiency in partial outsourcing and investment timing strategy under market uncertainty

Because outsourcing incurs hidden costs at the preparation stage and future profits are uncertain, outsourcing immediately is not always optimal. Thus, this paper studies when the optimal time to outsource is, by proposing a real option model. The timing strategy takes into account a firm’s effort at the preparation stage and an outsourced proportion, because ex post future profits and consequently the optimal time are affected by how well prepared the outsourcing is and how large proportions a firm outsources. Based on the model, this research provides managerial implications about how outsourcing timing strategies should vary when outsourcing environments such as market uncertainty changes and a firm’s effort. Our model shows that a firm can outsource earlier when an investment (effort) at the preparation stage is more efficiently made, when market becomes more stable, when it can expect higher marginal profits from the outsourcing, when it can outsource more proportion. Also, by comparing a widely used net present value model to our real option model, we show that the traditional method underestimates a firm’s value for outsourcing and misleads a firm to outsource earlier. Finally, we provide a descriptive framework for a decision support system.

MV-OPES: Multivalued-Order Preserving Encryption Scheme: A Novel Scheme for Encrypting Integer Value to Many Different Values

Encryption can provide strong security for sensitive data against inside and outside attacks. This is especially true in the “Database as Service” model, where confidentiality and privacy are important issues for the client. In fact, existing encryption approaches are vulnerable to a statistical attack because each value is encrypted to another fixed value. This paper presents a novel database encryption scheme called MV-OPES (Multivalued — Order Preserving Encryption Scheme), which allows privacy-preserving queries over encrypted databases with an improved security level. Our idea is to encrypt a value to different multiple values to prevent statistical attacks. At the same time, MV-OPES preserves the order of the integer values to allow comparison operations to be directly applied on encrypted data. Using calculated distance (range), we propose a novel method that allows a join query between relations based on inequality over encrypted values. We also present techniques to offload query execution load to a database server as much as possible, thereby making a better use of server resources in a database outsourcing environment. Our scheme can easily be integrated with current database systems as it is designed to work with existing indexing structures. It is robust against statistical attack and the estimation of true values. MV-OPES experiments show that security for sensitive data can be achieved with reasonable overhead, establishing the practicability of the scheme.

Knowledge transfer success factors in IT outsourcing environment

Due to the advancement of technology, organizations depends more and more on information technology in order to stay competitive. Thus, there is an increase of IT outsourcing (ITO) activities especially for a non IT companies. There are many types of IT outsourcing namely complete outsourcing, facility management outsourcing and system integration outsourcing. Many of these outsourcing projects are reported facing with risk due to the technology and market shift when exercising ITO. This include loss of knowledge when the outsourcing consumer (OSC) are left with little or no knowledge on the product developed, implemented and maintained by the outsourcing service provider (OSP). Thus, this paper addresses the importance to protect and ensure the organizational knowledge is transferred and shared throughout the organization in order to stay competitive. In doing so, some influencing factors were identified in the success of knowledge transfer processes (KTP) within the context of ITO environments. Seventeen attributes are proposed based upon the predetermined key factors. The key factors are Knowledge provider (vendor), Knowledge to be transfer, Knowledge Receiver (client) and the Knowledge Infrastructure. In order to validate the framework, data are collected using survey and later statistically analyzed. The refined framework incorporating best practices yielded four key factors with two influencing attributes specified for the first factor, three influencing attribute for the second factor, two attributes for the third factor and six attributes for the fourth factor. This framework can be seen as an integration of several important elements involved in KTP, which need to be considered as an important aspect in facilitating KTP in an ITO environment.

Transformation from the Information Age to the Conceptual Age: Impact on Outsourcing

The previous decades have seen the emergence of the Information Age, where the key focus was on knowledge acquisition and application. With the emergence of cross domain disciplines like outsourcing, we are witnessing a trend towards creative knowledge, rational application, and innovation. We are now progressing from an era that was information-dependent towards the era that revolves around concept development. This age, referred to as the Conceptual Age, will be dominated by six new senses - Design, Story, Symphony, Empathy, Play and Meaning - creating a need to diverge from the current reliance on linear and sequential algorithmic practices in outsourcing and to adopt cognition based engineering and management approaches. This paper lays the foundation for Offshore Engineering and Management (OEM) and discusses estimation issues in OEM that have their roots in software engineering. Also, this paper identifies the limitations of the current methodologies from an outsourcing point of view, and delineates how they can be deployed effectively for an outsourced environment.

International service outsourcing: Using offshore analytics to identify determinants of value‐added outsourcing

PurposeInternational outsourcing has been traditionally looked upon as a low end cost effective servicing option to take advantage of the cost arbitrage that exists across countries. Of late, many outsourcing vendors have realized that the advantages of cost differentials that spurred a lot of the global outsourcing business in the past 20 years will disappear in the medium term. The purpose of this paper is to provide a perspective about how much value addition, besides cost, traditional outsourcing vendors can provide and what may be the facilitator/inhibitors of such activities.Design/methodology/approachA case describing the setting up of an offshore analytics operation is presented, which gives a backdrop to the challenges faced in relatively high end value creation processes in a remote outsourced (offshore) environment. This provides some empirical support to a proposed model for facilitating the outsourcing of value‐added services.FindingsA model is proposed for determining the degree to which value‐added services can be outsourced. The key dimensions that influence the degree of outsourcing are: the expertise of the vendor; the environmental stability of the offshore domain; the physical barriers to outsourcing complex business processes such as, communication problems and proximity issues; the possibility of knowledge leakage from the outsourcing domain; and the cost benefits of outsourcing.Practical implicationsThe paper contends that conventional offshore‐based service vendors may find it difficult to acquire “expert power” and, set aside negative perceptions of “environmental stability” of their domain, in the pursuit to climb up the value chain in their client organizations. The validation of the proposed model is an opportunity for future research.Originality/valueThis paper is one of the first to present a model that will govern the growth of international outsourcing opportunities in high‐end value‐added processes. It also provides some directions for outsourcing vendors to enhance their capabilities over time to leverage this opportunity.

Contract design for supply chain quality management

Cost reduction has been a major driver of outsourcing. However, recent product recalls suggests that purchasing cost reduction alone is not enough. In this paper, we incorporate the Total Cost of Ownership (TCO) perspective into a two-stage leader-follower game to analyse the decisions made by one buyer and one supplier with a quality cost-sharing contract in a supply chain. Our analysis suggests that the optimal quality chosen by the supplier increases in its own cost efficiency, the buyer's profit margin and the wholesale price offered by the buyer, the optimal wholesale price set by the buyer decreases in the supplier's cost efficiency level and its own profit margin and an appropriate cost-sharing percentage exists between the buyer and the supplier. Our research provides managerial insights on how to induce the supplier to offer quality products along the supply chain in today's global outsourcing environment.

Transformation from the Information Age to the Conceptual Age

The previous decades have seen the emergence of the Information Age, where the key focus was on knowledge acquisition and application. With the emergence of cross-domain disciplines like outsourcing, we are witnessing a trend towards creative knowledge, rational application, and innovation. We are now progressing from an era that was information-dependent towards the era that revolves around concept development. This age, referred to as the Conceptual Age, will be dominated by six new senses--design, story, symphony, empathy, play and meaning--creating a need to diverge from the current reliance on linear and sequential algorithmic practices in outsourcing and to adopt cognition based engineering and management approaches. This article lays the foundation for offshore engineering and management (OEM) and discusses estimation issues in OEM that have their roots in software engineering. Also, this article identifies the limitations of the current methodologies from an outsourcing point of view, and delineates how they can be deployed effectively for an outsourced environment.

Computer aided manufacturability analysis: Closing the knowledge gap between the designer and the manufacturer

Manufacturing today is marked by increased competition and dispersed global organization, thus necessitating enhanced collaboration among designers and manufacturers. Nevertheless, while Design for Manufacturability (DFM) has been the subject of in-depth research over the past decades, the supporting software solutions have not as yet matured. In this paper we present a holistic approach and supporting software tool, termed the Computer Aided Manufacturability Analysis ( CAMA) tool, for capitalizing on available manufacturability knowledge. This is achieved by closing the knowledge loop between the design and manufacturing environments. CAMA captures the knowledge in a structured manner and incorporates this knowledge within the product design tools (CAD systems), thus enabling improved product timeliness and profitability. CAMA represents proof of concept and constitutes a demonstrative prototype of an adaptive and open DFX tool. It is based on industrial surveys of the Knowledge, Information and Data (KID) flows in CAD, CAPP and CAM processes within the manufacturing outsourcing environment. CAMA differs from other approaches in that it is an open system that enables continuous and intuitive capture, modification and implementation of updated manufacturability KID.

Technology and Knowledge Transfer within Outsourcing Relationships: The Development of a Model of Interorganizational Innovation

This article uses a comparative case-study analysis to develop a model of interorganizational innovation. Innovation within outsourcing contexts is embedded within relational and environmental factors that have not been fully explored in prior literature. Yet, efforts to promote innovation within such contexts may be considered a special case of the diffusion of technology across institutional boundaries. Hence, the model derived from the case studies describes the factors necessary for successful technology and knowledge transfer within information-technology outsourcing environments. The model consists of four components: the client, the supplier, the relationship, and the innovation outcomes. Within each of these components we describe process and resource elements that influence the success of technology- and knowledge-transfer efforts. Finally, the interdependencies extant in the model are explored for a more complete understanding of the phenomena under examination.

A probabilistic model for optimal insurance contracts against security risks and privacy violation in IT outsourcing environments

Day by day the provision of information technology goods and services becomes noticeably expensive. This is mainly due to the high labor cost for the service providers, resulting from the need to cover a vast variety of application domains and at the same time to improve or/and enhance the services offered in accordance to the requirements set by the competition. A business model that could ease the problem is the development or/and provision of the service by an external contractor on behalf of the service provider; known as Information Technology Outsourcing. However, outsourcing a service may have the side effect of transferring personal or/and sensitive data from the outsourcing company to the external contractor. Therefore the outsourcing company faces the risk of a contractor who does not adequately protect the data, resulting to their non-deliberate disclosure or modification, or of a contractor that acts maliciously in the sense that she causes a security incident for making profit out of it. Whatever the case, the outsourcing company is legally responsible for the misuse of personal data or/and the violation of an individual’s privacy. In this paper we demonstrate how companies adopting the outsourcing model can protect the personal data and privacy of their customers through an insurance contract. Moreover a probabilistic model for optimising, in terms of the premium and compensation amounts, the insurance contract is presented.

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.

2.5.2 Systems Engineering in an Outsourcing Environment

AbstractOutsourcing is the process of hiring someone else to do work that a business cannot, or does not wish to, do itself. While businesses have always done this, the entire field of outsourcing has taken on new dimensions and in the past few years has become vastly different from what it once was. Now companies are outsourcing significant portions of their core application development work overseas as well as areas such as order processing, help desks and others, justified by a lower cost per unit. As a result of overseas outsourcing, significant problems have arisen that either did not exist before or were easy to remedy when the work was done internally. Many of these problems can be traced to poor or missing requirements, a poor understanding of business processes, or to technology and security problems in the deliverables. This article discusses the role of systems engineering in avoiding or reducing the most significant problems. Rather than just gathering functional and performance requirements, systems engineers must now develop an entire requirements encyclopedia in order to provide enough information, do much more detailed business process analysis, and help develop testing and quality assurance approaches that can detect security back doors that may have been put into software products.

Lean potential of network-enabled remote service outsourcing: spatio-temporal decoupling and resource flexibility

The development of internet-enabled remote service provision and outsourcing is currently transforming the services industry, as the Indian IT outsourcing business stunningly illustrates. This article focuses on how this approach can be used to foster flexibility, responsiveness and waste elimination in services. By extrapolating from the physical goods manufacturing lean experiences, the issues surrounding service request queues and spatial co-location restrictions are analysed. The various components of resource-related flexibility are examined, along with how they are affected by network-enabled remote service outsourcing. That leads to the development of a framework comparing how fluctuations in demand, operational incidences and stringent operational efficiency requirements are managed in both product manufacturing and service production, in conventional and in lean/network-enabled outsourcing environments.

Decision making under risk in the Forestry Outsourcing Environment

SYNOPSIS Decision making under uncertainty can be modelled to make it more objective and efficient. To do this one need to evaluate the risk, probabilities and future states of nature. When combining the abovementioned factors with expected monetary values or payoffs, the best option can be identified to optimise economic efficiency. This method of decision making is described and illustrated with examples and can be used for decision making in the current outsourcing environment in the Forestry industry.

Working in the Out-sourced Environment

Working in the Out-sourced Environment