Outsourcing Objectives Research Articles

A decade of outsourcing in health and social care in England: What was it meant to achieve?

The increased private provision of publicly funded health and social care over the last 75 years has been one of the most contentious topics in UK public policy. In the last decades, health and social care policies in England have consistently promoted the outsourcing of public services to private for-profit and non-profit companies with the assumption that private sector involvement will reduce costs and improve service quality and access. However, it is not clear why outsourcing often fails to improve quality of care, and which of the underlying assumptions behind marketising care are not supported by research. This article provides an analysis of key policy and regulatory documents preceding or accompanying outsourcing policies in England (e.g., policy document relating to the 2012 and 2022 Health and Social Care Acts and the 2014 Care Act), and peer-reviewed research on the impact of outsourcing within the NHS, adult's social care, and children's social care. We find that more regulation and market oversight appear to be associated with less poor outcomes and slower growth of for-profit provision. However, evidence on the NHS suggests that marketisation does not seem to achieve the intended objectives of outsourcing, even when accompanied with heavy regulation and oversight. Our analysis suggests that there is little evidence to show that the profit motive can be successfully tamed by public commissioners. This article concludes with how policymakers should address, or readdress, the underlying assumptions behind the outsourcing of care services.

An Application of Goal Programming Variants to Evaluate Outsourcing Strategies in the Clothing Industry

International outsourcing has provided the immense cost savings to the clothing companies. Today, the companies are reconsidering the reshoring and relocation due to the factors such as increasing cost, lead time uncertainty, and demand nature. In such situations, the domestic destinations provide capacity flexibility. Choice of the compatible strategy for a given situation prevents the associated loss in the business. This paper evaluates the outsourcing and reshoring phenomenon based on realistic outsourcing objectives in the textile supply chain. This paper develops a goal programming model to analyze the outsourcing strategies for cost and capacity flexibility. Minimization of the capacity inflexibility was considered as the capacity flexibility. Cost and capacity inflexibility were used as two objective functions. The optimization model was solved using the three important variants of goal programming. Comparison of results from three different techniques provides several insights for precise outsourcing decision making. For instance, the companies can choose a compatible strategy to maintain the cost and capacity flexibility at an acceptable level. Instead of only the cost saving, the reshoring decision making should be based on all the real criteria. The key focus of this paper is the clothing industry. The results may be different for other manufacturing sectors. Due to the increased globalization, the textile companies have been facing various challenges such as outsourcing destination selection for maximum profit and the reshoring debates. To address such challenges, this study provides various insights to the textile industry based on realistic objectives of outsourcing (i.e., cost and capacity flexibility). It is difficult to quantify the flexibility. This paper develops new ideas to quantify the capacity flexibility. The application of three different variants of goal programming provides the alternative solutions.

Decision Factors for Outsourcing On-premise Applications of Institutions for Higher Education

In Dutch higher education institutions, IT outsourcing (ITO) is becoming more common. New applications nowadays are executed from the ‘cloud’. But what to do with on premise applications? Can they also be outsourced? If so, what factors does a higher education institution have to consider when making the ITO decision of their on-premise applications? This research starts with finding the factors that are already known in existing ITO literature (in different contexts). Then, these decision factors are validated in four explorative interviews before surveying the factors within a higher education context. In total, fourteen factors are deemed to be important for Dutch higher education institutions. Based upon the survey responses by Dutch IT decision makers, a hierarchy exist in these fourteen factors. Also, this research suggest a relationship between outsourcing decision factors and the sourcing models. Additionally, outsourcing objectives seem to influence this relationship.

Knowledge Management: Why Do We Need it for Corporates

This article gives a brief introduction about Knowledge Management (KM), its need, definition, components, KM assets, challenges and processes of KM initiative at any organisation. It also provides a narration on how the KM initiative has been adopted at ICICI OneSource, to support the achievement of its Business Process Outsourcing objectives. Both knowledge sharing as well as re-use need to be encouraged and recognized at the individual employee level as well as the company level. This is best done by measuring and rewarding knowledge-performance. Sustained strategic commitment and a corporate culture that is conducive to knowledge-performance are vital for success in Knowledge Management. The paper concludes with suggestions for the implication for policy and future practices.

Outsourcing in Iranian hospitals: Findings from a qualitative study.

Outsourcing is used as a strategy to improve efficiency, quality, and satisfaction of beneficiaries in hospitals. This study aimed to determine the reasons for outsourcing, outsourced services, achieved objectives, and outsourcing challenges. This qualitative study was conducted through 58 face-to-face semi-structured interviews with chief executive officers (CEOs), chief financial officers (CFOs), and contracting experts (CEs) in 42 public hospitals in Tehran, Iran. Purposive and snowball sampling techniques were used. Interviews were recorded digitally and transcribed verbatim. Data analysis was performed based on an inductive-deductive approach via MAXQDA-10. The Participants included 26 CEOs, 15 CFOs, and 17 CEs. The most important reasons for outsourcing were divided into four main categories including financial resources and funding, customers, management, and factors related to the hospitals. Accessing to up-to-date knowledge and technology, improving service quality and accountability, focusing on strategic points, reducing workload, and increasing patient satisfaction turned out to be the positive outcomes of outsourcing. Weakness in laws and regulations, monitoring and assessment of an outsourced unit, creating dependency and changing organizational culture, as well as human resource issues were introduced as the main pitfalls and challenges of outsourcing. Based on the results, it was suggested that the hospital managers must attempt to outsource services by realistic analysis of the organization's current status. They should specify the reasons and objectives of outsourcing and make decisions based on outsourcing potentials. By taking the current challenges of outsourcing in Iranian hospitals into account, the authorities can make the most efficient decisions with regard to outsourcing.

Strategic outsourcing objectives drive 3PL selection criteria in India

This paper examines the extent to which supply chain outsourcing objectives determine the selection criteria for 3PL service providers. While the 3PL selection criteria are researched earlier, there is little understanding how they are influenced by the strategic objectives of an organisation. Using a cross-sectional survey of 297 logistics and supply chain professionals from across industries in India, structural equation modelling (SEM) analysis reveals that strategic outsourcing objectives are the likely predictor of the 3PL selection criteria. The respondents perceived higher customer satisfaction, reduction of ICT legacy systems, capital investment avoidance and access to state-of-the-art technology that influence the decision on selection of 3PL service provider. The findings provide shipper managers an insight on how to purposefully assess the selection criteria ensuring their alignment with strategic objectives of outsourcing.

Strategic outsourcing objectives drive 3PL selection criteria in India

This paper examines the extent to which supply chain outsourcing objectives determine the selection criteria for 3PL service providers. While the 3PL selection criteria are researched earlier, there is little understanding how they are influenced by the strategic objectives of an organisation. Using a cross-sectional survey of 297 logistics and supply chain professionals from across industries in India, structural equation modelling (SEM) analysis reveals that strategic outsourcing objectives are the likely predictor of the 3PL selection criteria. The respondents perceived higher customer satisfaction, reduction of ICT legacy systems, capital investment avoidance and access to state-of-the-art technology that influence the decision on selection of 3PL service provider. The findings provide shipper managers an insight on how to purposefully assess the selection criteria ensuring their alignment with strategic objectives of outsourcing.

An analysis of vendor innovation capability in the contract electronics manufacturing industry

Limited academic research has been given to analysing the innovation capabilities of vendors in outsourcing contracts. This paper seeks to address this gap in the literature by enhancing our understanding of how the innovation capability of vendors is deployed to win, run and renew outsourcing contracts with their customers. Employing the resource-based view as a theoretical basis and undertaking in-depth case study analysis of three vendors in the electronic manufacturing services industry, the research shows that to achieve the outsourcing objectives of winning, running and renewing the contract, vendors can use different configurations of the competitive priorities of cost, quality, delivery and flexibility. The research aggregates the capabilities that influence the innovative capability of a vendor into the innovation-related capabilities (IRCs) of design, new product introduction and manufacturing. Three strategies are identified for vendors on how to deploy these IRCs, and a number of propositions are developed to indicate the suitability of the three deployment strategies for different operational contexts.

Impact of Time Management for IT Services Management

In order to proactively respond to the rapidly changing IT environment, companies consider leveraging IT outsourcing which requests internal information systems maintenance to the external IT service provider. Since the main objectives of IT outsourcing is IT cost reduction with acceptable service quality, IT service provider should manage resource utilization accurately and enhance IT skill of the employees simultaneously. In this study, the impact of time management unit from month to hour is presented for the company which was spun off from the internal IT support division of traditional company. The culture change from cost-center to profit-center organizations has been made due to the change of mind-set of time. In addition, resource utilization, employee training period, work-life balance can be increased. In order to connect these impact and IT productivity, integration time management system to ITMS system will be planned.

Examining the link between outsourcing and performance: the leverage effect of the interactive use of management accounting and control systems

Previous literature reveals contradictory results when evaluating the effect of outsourcing on organisational performance. In attempting to explain this contradiction, the existing research seems to have overlooked potential intermediate variables such as management accounting and control systems (MACS). Because an inadequate control of supplier relationships can impair the performance of outsourcing operations, there is a need to adopt management tools to build and improve these relationships. MACS comprise the various policies and procedures used to ensure that the suppliers’ behaviour and decisions are consistent with outsourcing objectives. The interactive use of these management tools can help effectively manage the relationship between the outsourcing organisation and the outsourcer.Taking a sample of 231 organisations, the results obtained support the research question, suggesting that interactive use of MACS moderates the impact of some outsourced activities on performance.

A multiple-factor decision analysis framework for manufacturing outsourcing

The competitiveness of the global market and availability of multiple outsourcing options have greatly increased the complexity of making ‘good’ outsourcing decisions. Improving the decision-making process when faced with a complex decision situation requires a systematic decision-making framework. We propose such a framework for making strategic manufacturing outsourcing decisions that benefits from prominent decision analysis tools. We envision a multiple factor outsourcing decision model and specifically advocate the use of 1 value-focused thinking to identify the outsourcing objectives 2 a combination of an influence diagram and a decision tree to model the decision situation 3 the cumulative prospect theory as an alternative to traditional utility theory for modelling the risk behaviour of the decision maker 4 the prospect stochastic dominance to establish pair-wise dominance between outsourcing choices. We have developed a procedure for dividing the outsourcing choices into dominated and non-dominated sets, and rank ordering the elements of non-dominated set to identify the best strategy.

The Evolution of Contractual and Relational Governance in IS Outsourcing

This paper explores how and why contractual and relational governance evolve over time in information systems (IS) outsourcing projects. Governance is broken down into its foundation and action dimension resulting in four governance parameters: trust /norms and informal control representing relational governance; contract and formal control reflecting contractual governance. Drawing on the lenses of punctuated equilibrium and biological interaction, we examine both incremental and disruptive change along our four governance parameters. The findings from four longitudinal IS outsourcing projects suggest that incremental changes are driven by interactions between governance parameters. We found three basic patterns of interaction between governance parameters (mutualism, commensalism, competition) that explain incremental changes. In contrast, disruptive governance changes during revolutions are driven by stark contextual changes. However, interactions during equilibriums may lead to self-perpetuating dynamics that may detract governance from basic outsourcing objectives. Revolutions may break these self-perpetuating dynamics and redirect governance to basic objectives.

Deployment of vendor capabilities and competences throughout the outsourcing process

PurposeA vendor's capabilities are recognized as one of the most important factors for success in outsourcing. However, there is a lack of understanding of how vendors manage their capabilities throughout the outsourcing process. With an aim to contribute to filling this existing gap, the purpose of this paper is to explore how vendors deploy their capabilities in order to win, run and renew the outsourcing contracts.Design/methodology/approachThe research question has been derived by integrating a resource‐based view theory with a model of a vendor's process in outsourcing. A multiple‐case study of three contract electronic manufacturers has been employed to explore the research question.FindingsThe results show that for achieving their outsourcing objectives, vendors use different capability mixes: the winning, the running, and the renewing. These mixes are created through utilization of different portfolios of competences (balanced, unit‐dominant, and versatile) and capabilities (permanent and temporary) which need to be deployed in the right combination (deployment strategy) adequate for the stage of the industry dynamics in which vendors operate. The research also indicated the importance of the relationship management capability for the success of outsourcing arrangements in the electronic manufacturing service (EMS) provision industry.Research limitations/implicationsNew research involving more case companies would improve the validity of the conclusions made in this paper. Results also suggest that more research into relationship management capability in the context of the EMS industry will be a fruitful area for future studies.Practical implicationsVendors who seek to advance in the industry's value chain need to expand their portfolio of competences and adapt their deployment strategies to new, more dynamic and volatile environments. The paper proposes three different deployment strategies for three different operational contexts.Originality/valueIn contrast with the existing static approach towards studying vendor's capabilities in outsourcing, the paper's findings show that vendors use different mixes of capabilities throughout the outsourcing process. The authors have been able to show how those capability mixes are formed. In addition, it was found that relationship management is an important capability for consideration when studying and practicing manufacturing outsourcing.

Outsourcing and its impact on operational objectives and performance: a study of Iranian telecommunication industries

Article history: Received June 18, 2011 Received in Revised form August, 24, 2011 Accepted 25 August 2011 Available online 27 August 2011 Through outsourcing, a company can expand and develop its sources and capacities by accessing to higher quality services and better functionality. This paper deals with the perception of the managers of the telecommunication industry sector on the effects of outsourcing on operational strategy and especially on the issues associated with cost reduction, developed quality, flexibility and better service. Because of the importance of the strategic feature of outsourcing, we examined its effects on the organizational function of the telecommunication industries. This study shows that managers believe that outsourcing has a great impact not only on the cost reduction but also on other goals of operational strategies, which makes outsourcing become inherently more strategic. In addition, it seems that outsourcing influences function noticeably. In the present research, the relationships between propensity to outsourcing and operational objectives and organizational performance in telecommunication industries are assessed. The aim of this research is to examine the propensity to outsourcing and its impacts on operational objectives including cost reduction, improved quality, flexibility and better service and organizational performance, which includes financial performance and non-financial performance . In the research, data are collected through field research and questionnaires. The questionnaires are distributed among the board of directors, quality managers, operational administrators, and lower managers and then the feedbacks are analyzed using SPSS and Minitab software based on deductive and descriptive statistics. © 2012 Growing Science Ltd. All rights reserved.

Selecting Outsourcing Strategies in Single Level Bidirectional Service Supply Chain: A Proposed Approach

The purpose of this paper is to propose an approach for selecting outsourcing strategies in single level bidirectional service supply chain. For this purpose, analytic hierarchy process (AHP) technique has been used for selecting two factors that have maximum influence on service outsourcing decisions. Selected factors have been integrated with quadrant analysis for selecting outsourcing strategies. Two questionnaires have been developed to indicate the importance and correlation of objectives of outsourcing and choosing factors that have influence on service outsourcing decisions in the selected service supply chain of a hospital in Isfahan, Iran. Questionnaires have been fulfilled by senior managers and supervisors the hospital. The results indicate that customer contact and relative capability position in the process have maximum affect on service outsourcing decisions in the selected service supply chain and when relative capability position in the process is high, it is better for the decision makers to keep process internal, i.e. in-sourcing since it provides more competitive advantages. Key words: Outsourcing; Service Supply Chain Management (SSCM); Health care; AHP; Quadrant Analysis

It takes two to tango

Introduction The IT outsourcing, industry landscape is dotted with broken contracts - results of unsuccessful client-vendor (C-V) partnerships. Approximately 78% C-V partnerships fail in the long term, inflicting high transition costs on clients. The recent economic downturn has strined C-V partnerships further. Despite the criticality of this issue, there is a relative lack of efforts to understand the issues leading to failed partnerships. We discuss these issues in light of the clients' onus towards improving the longevity of C-V partnerships. We adopt a two-pronged approach. First, we try to identify the client characteristics that influence their potential to forge a long-term C-V partnership. To that extent, we discuss a partnership maturity curve (PMC), which categorizes clients into three dynamic stages, and predicts their potential for developing mature partnerships based on their outsourcing objectives and their fit with vendors' capabilities (see Figure 1). Second, we try to understand vendors' perspective on the issue. We interviewed 21 executives in nine established IT-outsourcing vendors in India. It has been recommended that vendors' perspective is critical to understanding C-V partnerships. Vendors highlighted an interesting mix of their own as well as client-generated issues, which we discuss in light of the client dynamics identified by PMC, to propse guidelines for clients interested in developing successful C-V partnerships. The study confirms existing belief that improving the longevity of C-V partnerships requires relational investments from clients. We identify various areas for clients to make such investments.

Digital Taylorization of Social Service Work

As the Canadian government shifted to a neo-liberal policy regime, social service delivery was “contracted out” to community organizations such as the Riverview Centre. The outsourcing objectives were to keep delivery costs low and to build in efficiencies by relying on new technological systems. This paper shows the problems arising from the Riverview Centre’s inadequate technology system when interfacing with advanced government networks to report on employment services provided to clients. These advanced networks centralized control of social-service labour through digital Taylorization practices. Electronic reporting tasks have been standardized and routinized such that labour processes are shaped by the digital technology systems. The delivery of employment services conceals the dual aspect of the commodification of the social workers’ labour through contract employment and technological means.

A Path to Successful IT Outsourcing: Interaction Between Service‐Level Agreements and Commitment

ABSTRACTAlthough service‐level agreements (SLAs) are important for IT outsourcing management, appropriate mechanisms for constructing effective SLAs are still poorly understood, leading to inadequate or overcomplicated contracts that are ineffective. This study examines the associations among three distinct sets of SLA characteristics and outsourcing success, as well as the role of commitment in these relationships. Analyzing survey data based on a model theorizing the alignment of SLA characteristics with intended outsourcing objectives, we find that different types of benefits attained through IT outsourcing arrangements are associated with the use of specific contractual dimensions. We also find that commitment, in general, moderates the impact of SLAs on outsourcing success, although the nature of the moderation varies with the different benefits IT outsourcing engagement is intended to achieve. Interestingly, in certain cases—change characteristics for achieving technology benefits, in particular—commitment can be a barrier to the effective use of SLAs in achieving intended outsourcing benefits. As such, our study extends the literature on IT outsourcing, contracting and commitment, as well as provides a general guideline for practitioners to structure effective SLAs and to properly use commitment for managing IT outsourcing engagements to successfully achieve intended benefits.

A Supplementary Framework for Evaluation of Integrated Logistics Service Provider

As a result of globalization, supply chains of many large business organizations nowadays tend to cover wider geographic areas spanning across different countries and continents. The growth in length and complexity gradually replaces the traditional linear supply chains with extended supply networks comprising not only suppliers, manufacturers, distributors, and end customers, but also service providers. With the increasing use of third-party logistics (3PL) providers by international firms seeking integrated logistics services, many global 3PL providers are forming partnerships with large corporations to take care of the latter’s logistics operations in different regions. The selection of the right 3PL provider for alliance is therefore paramount to the success of global supply chain management. This article investigates the significance of this subject and proposes a supplementary framework for evaluation of 3PL providers as global logistics partners for international firms. The framework focuses on the core competencies of 3PL providers and their abilities to attain economies of scale helping users achieve their outsourcing objectives.

IT compliance: where does the buck stop?

This paper deals with IT compliance and outsourcing. Its not always clear who bears the regulatory compliance liability where the IT function is outsourced. Corporate compliance are two words that are being increasingly broached in IT departments and boardrooms, as industries in all sectors face a growing number of regulatory compliance deadlines. IT will bear the brunt of responsibility in enabling businesses and organisations to meet legislative stringencies, especially as many affect how they must store and be able to retrieve data, for instance. IT itself forms a large part of the corporate procedures that fall under the scrutiny of the incoming legislation. This means that IT systems have to be up to the mark or their owners risk penalties. Although the legislations are clear in their requirements, a very fuzzy area for many is exactly which party must be compliant when it comes to outsourcing. One of the key objectives of outsourcing is effective risk management and passing as much responsibility as possible to the service provider.