This phase also includes establishing a framework for IS performance objectives and measurements. These measures should be developed with input from management, IS personnel, and users.
Productivity measures are critical to the evaluation study for two reasons: Implementation of these measures can identify processes and products that are subject to defects; once detected, these defects can often be corrected, with a resulting gain in productivity.
If the analysis supports a decision for outsourcing, these measures can be used as the basis for establishing acceptable levels of vendor performance. Step 2: Setting strategic directions This step of the evaluation process contemplates the global business posture of the organization and how this posture relates to IT: The IS function is evaluated as to whether it is or should be an important contributor to the organization's success.
Competitive advantage implies that an organization plans to remain competitive through strategic investments in general, and implementation of strategic IS systems in particular, that directly increase market share or improve profit margins. A low-cost provider outlook takes the position that IS contributes to the organization's competitive posture by providing low-cost processes and operations through inexpensive transaction processing. The low-cost operator category assumes that IS will not play a role in differentiating the organization.
Therefore, the IS function is expected to provide adequate service while consuming a minimum amount of resources. High flexibility is a posture that enables IS to react quickly to support business contingencies, including the addition or divestiture of corporate divisions.
It is likely that different departments of an actual organization may subscribe to different computing postures. The challenge of IS is to figure out how it can meet all or at least the majority of these requirements in an effective manner. Perhaps outsourcing can help mediate some of these potential differences. Consider a large bureaucratic company with ten departments. Nine of these departments have established procedures using mainframe legacy systems for customer records, inventory management, billing, etc.
However, the sales department, whose members are always on the road, needs a new flexible and highly effective order entry system that will enable salespeople to enter complex service orders right at the customer site, rather than holding on to then for one or two days and then trying to enter the information off-line, where it is impossible to obtain a missing field in real time. Without such a system, it may take up to five days just to enter the service order, and filling the order takes an equally long or longer period.
Clearly, the ability to use wireless technology for on-site entry is an excellent competitive advantage, improving the ability to deliver service ahead of the competition. If the IS organization is not able to design, deploy, and manage such a state-of-the-art network, this one function could be outsourced to a vendor that can do it.
Hence, while the other nine departments may be low-cost operators, the sales department may be more in the competitive advantage category. The initial step of this phase is to establish how closely the PMO IS environment aligns with the strategic focus. If they are aligned, further evaluation is not needed; the evaluation effort is suspended for, say, twelve months, after which the process is redone.
Often organizations find that the two purposes diverge. For example, the IS scenario analysis may demonstrate the need to be in the competitive advantage mode, but the PMO shows that the organization is actually geared to being a low-cost operator. Sometimes the local culture and customs can also impede this process.
Methods of data collection and analysis are discussed in the next section. In particular, the research investigated the strategies of offshore vendors in developing their business models to attract overseas customers.
Fieldwork was conducted in India during to elicit exploratory- descriptive data on the strategic positioning of these firms; their product and services portfolio and their value proposition to customers.
Interviews were conducted with managers and IT professionals across the 17 firms in Mumbai and Pune, India. From the seventeen firms five are small companies with less than employees; four are medium sized firms with employees; and eight were typically large firms with over employees.
Many firms were industry leaders in the Indian software market. This study discusses the findings from the first phase of the research project. A grounded theory approach Strauss and Corbin was used since it was not deemed appropriate to develop hypotheses to test a particular theory ibid. The scoping study was important since much of the literature on the Indian outsourcing market consisted of reports from industry analysts IDC, Forrester, Gartner , all of which tended to offer an optimistic picture of the opportunities for growth in the offshore outsourcing market.
The risks were therefore underplayed. This key themes explored in the exploratory-descriptive cases are as follows:- 1. The strategic position of the outsourcing vendor in the Indian software market e. The value proposition to customers e. Data analysis All the interviews were tape-recorded and transcribed. This poses problems to the researcher since the data collected becomes difficult to organise and prioritise. Notwithstanding these problems, the case study data generated some interesting findings in relation to the different strategies adopted by vendor firms.
Since interviews at some firms lasted only two-four hours, it was important to triangulate the data gathered using additional methods of data collection.
Secondary source data was acquired and analysed to provide a fuller picture of vendor strategies, partnerships, products, services and customer profile. Much of this data was gathered through web searches and from company brochures and advertising literature.
Media and press reports were also obtained. Secondary source data is therefore essential to balance some of the statements obtained from management with other interpretations of events. Phase two of the research will also acquire and analysis customer interpretations of using offshore outsourcing firms.
Preliminary Results and Future Directions Given the space limitations of the paper, it is not possible to discuss all the individual case studies. The cases have been presented in a recent paper Khan, Currie, Weerakkody and Desai They are presented in a matrix Figure 2 that relates value added work with risk. And so we resources, leading to a large applications backlog. You pay for them to His investigation consisted of inviting several ven- learn your business, then they move those people to dor bids—not for applications, but for the data center, court other companies in your industry.
They transfer a function he knew was performing well. And management and users to terminate the contract. Recalls they are doing the best that they can. So did it help? It really came down to an exercise. We did not like the systems. Also the issues of quality came up, try to make outsourcing work. What we were really customer service, no new technology. Senior executives confirm the value of IT.
After an initial investment, the IT manager This archetype indicates the case where the insourcing conveyed that users are happier with the service and decisions did not result in significant reduction in IT that his current IT budget is less than the fixed price costs, but the insourcing decisions were still consid- contract, indicating a successful financial outcome. Senior IT Archetype 3. IT managers defend insourcing.
Each has implemented service improvements occur. An outsourcing vendor, cognizant of son. They used the outsourcing evaluations to confirm the situation, called the CEO and offered to purchase to senior management the legitimacy of continued his IT assets, hire his IT staff, and reduce his current sourcing through the internal IT departments.
In IT costs while still maintaining service levels. The three cases, these cursory evaluations eventually back- CEO called his direct subordinate, the VP of IT, and fired, senior managers firing IT managers or eventu- told him to draft a letter to the vendor, declining the ally outsourcing.
They treated it like they treated the heat or electricity. Insourcing archetypes and case classification. These further analysis, he explained how he had spent in IT Costs typically by creating an RFP outsourcing experiences were 30 years educating and demonstrating to senior and inviting both internal so disastrous that no formal and external bids.
Although external cus- in IT is traditionally outsourcing. Unlike senior executives who think the concept of your IT person being part of the focus on cost, users primary criterion for success is ser- management of the company—not just a technician vice excellence. In our research Each stakeholder group sets a different expectation for design, we selected successes and failures to ascertain: IT performance, and as such, holds different percep- After outsourcing evaluations reconfirmed insourcing tions of IT performance and the effects of insourcing.
Minimize costs. In the majority of cases, cost efficiency. These senior executives were frustrated our original conception of cost-savings as the primary with the rising costs of IT and questioned the value of criterion for success only captured the perceptions of IT expenditures. Because of the questionable value of senior executives, whom we concluded perceived IT as IT, many senior executives viewed IT as a commod- a cost to be minimized.
In cases of extreme cost-cut- ity—a necessary cost of doing business. The choice included coverage of the scope of the sourcing decision, sponsors of the decision, the sourcing evalua- details in which insourcing was considered; the key participants in the decision process; their pre- of the case studies was based on tion process, and implementation understanding of the sourcing the desire to have a variety of process.
We sought to the outcome. When participants and the consequences results of generate insights into best sourc- expressed a viewpoint, they were insourcing. The porting evidence. The evidence 2. Analyze six decision factors organizations also represented a consisted of anecdotes as well as across the cases.
Once we had a wide spectrum of industries. In documentation such as bench- feel for each individual case, we order to facilitate the discussion, marking reports, IT budgets, then scanned across the 14 cases the 14 companies are referred to internal bids, outsourcing bids, to see what similarities and dif- by pseudonyms based on their and bid analysis criteria. In cases ferences existed. These factors were in sourcing decisions. Intervie- Participants were also asked derived from our previous wees included senior business specific questions about their research on outsourcing [7].
Per- sponsored the sourcing evalua- taining to their company, partici- 3. Employ a rhetorical device to tions, consultants hired to assist pants described the generalize common themes contract negotiations, and IT per- organizational structure, the among the cases. The use of sonnel responsible for gathering major products and services pro- archetypes is employed to con- technical and financial informa- duced, competition in the indus- dense and simplify a complex tion pertaining to the sourcing try, financial situation, corporate subject matter.
We are not using decision. All interviews were con- goals, business successes and archetypes necessarily as an ana- ducted in person at the company failures. Pertaining to IT, partici- lytical tool, rather as a rhetorical site. All participants were assured pants described IT activity in device to convey the themes anonymity so as to promote open terms of headcount, budget, extracted from our analysis of the discussions.
Identify common lessons across mat. During the unstructured por- Data Analysis the cases. While these archetypes tion, participants were asked to The transcribed interviews were capture the differences among tell their sourcing story, which analyzed using a data analysis insourcing approaches, we also allowed them to convey their process involving the following sought to characterize common interpretations freely. Our earlier research on determinants of outsourcing generally showed that companies most likely to outsource on a large scale were in poor financial situations, had poor IT functions, or had IT functions with little status within their organizations Lacity and Hirschheim, , To this day there is still considerable debate on whether certain sourcing decisions and practices result in success or disappointment Lacity and Willcocks, Unable to display preview.
Download preview PDF. Skip to main content. This service is more advanced with JavaScript available. Advertisement Hide. Information Technology Insourcing: Myths and Realities.
0コメント