<p><strong>Introduction</strong></p><p>IT-Outsourcing is a concept that describes the supply of part or all of Information Technology (IT) services by an external supplier company, known as IT-vendor, to a client company. The ‘IS-Improvement’ is one of the three strategic views of IT-Outsourcing for clients and involves advantages like focusing on core business, cost reductions and increase of IT-resources efficiency.</p><p><strong> </strong></p><p><strong>Objectives</strong></p><p>The purpose of this project is to discover, describe and analyze the most critical aspects in implementing IT-Outsourcing and the critical aspects of the ‘IS Improvement’ view of IT-Outsourcing for clients, to further let IT-vendors know how they can improve on delivering their services to their customers.</p><p><strong> </strong></p><p><strong>Research Question</strong></p><p>“<em>Which are the most critical factors </em><em>in implementing IT-Outsourcing and which are the critical aspects of the IS-improvement view of IT-Outsourcing for four organizations as clients?</em>”</p><p><strong> </strong></p><p><strong>Method</strong></p><p>This project follows an exploratory research method. It is mainly an action research but there is also an element of a realist research. The subject of IT-Outsourcing was chosen because it is part of IT-Management. The analysis is based on primary data collected from four organizations in the European Union (EU) that were chosen because they use IT intensively in their activities. Access to these organizations was because of convenience since it was enabled by personal contacts. Two organizations were in the shipping business, the third organization was an electronic-devices factory, and the fourth was a university. The data collection was based on three face-to-face interviews with the IT-Managers of the organizations, and one response was collected by electronic means since the fourth respondent (also IT-Manager) completed and sent the questionnaire by e-mail. The interviews were based on a semi-structured questionnaire, that in turn was formed based on the content of the critical literature review. The critical literature review was formed from books and articles found at Mälardalens Högskola’s library and databases, and interlibrary loans. The data were inserted in a table for content analysis that helped count the frequencies of the various factors of IT-Outsourcing. The results were drawn based on qualitative analysis and they were tested against dialectical critique.</p><p><strong> </strong></p><p><strong>Conclusions</strong></p><p>The most critical factors in implementing IT-outsourcing for these four organizations are: Hardware maintenance is the most critical area to be outsourced. Low costs of services, supplier’s stability and reputation are the most critical factors in selecting an IT-vendor. Supplier’s understanding of client’s objectives is the most critical factor for a successful relationship between clients and IT-vendors. Precise definition of costs is the most critical factor to be included in an IT-Outsourcing contract, and selective/partial IT-Outsourcing is the IT-sourcing solution preferred by these organizations. The ‘IS-Improvement’ view of IT-Outsourcing for these four organizations is not valid, but the respondents’ words indicate ways that IT-Outsourcing can be improved to achieve increased IT-resources efficiency.</p>

Introduction IT-Outsourcing is a concept that describes the supply of part or all of Information Technology (IT) services by an external supplier company, known as IT-vendor, to a client company. The ‘IS-Improvement’ is one of the three strategic views of IT-Outsourcing for clients and involves advantages like focusing on core business, cost reductions and increase of IT-resources efficiency.   Objectives The purpose of this project is to discover, describe and analyze the most critical aspects in implementing IT-Outsourcing and the critical aspects of the ‘IS Improvement’ view of IT-Outsourcing for clients, to further let IT-vendors know how they can improve on delivering their services to their customers.   Research Question “Which are the most critical factors in implementing IT-Outsourcing and which are the critical aspects of the IS-improvement view of IT-Outsourcing for four organizations as clients?”   Method This project follows an exploratory research method. It is mainly an action research but there is also an element of a realist research. The subject of IT-Outsourcing was chosen because it is part of IT-Management. The analysis is based on primary data collected from four organizations in the European Union (EU) that were chosen because they use IT intensively in their activities. Access to these organizations was because of convenience since it was enabled by personal contacts. Two organizations were in the shipping business, the third organization was an electronic-devices factory, and the fourth was a university. The data collection was based on three face-to-face interviews with the IT-Managers of the organizations, and one response was collected by electronic means since the fourth respondent (also IT-Manager) completed and sent the questionnaire by e-mail. The interviews were based on a semi-structured questionnaire, that in turn was formed based on the content of the critical literature review. The critical literature review was formed from books and articles found at Mälardalens Högskola’s library and databases, and interlibrary loans. The data were inserted in a table for content analysis that helped count the frequencies of the various factors of IT-Outsourcing. The results were drawn based on qualitative analysis and they were tested against dialectical critique.   Conclusions The most critical factors in implementing IT-outsourcing for these four organizations are: Hardware maintenance is the most critical area to be outsourced. Low costs of services, supplier’s stability and reputation are the most critical factors in selecting an IT-vendor. Supplier’s understanding of client’s objectives is the most critical factor for a successful relationship between clients and IT-vendors. Precise definition of costs is the most critical factor to be included in an IT-Outsourcing contract, and selective/partial IT-Outsourcing is the IT-sourcing solution preferred by these organizations. The ‘IS-Improvement’ view of IT-Outsourcing for these four organizations is not valid, but the respondents’ words indicate ways that IT-Outsourcing can be improved to achieve increased IT-resources efficiency.

Frågeställningar: Hur arbetar parterna i outsourcing-arrangemang för att etablera effektiva relationer och social anpassning?   Hur påverkar utformningen av outsourcing-arrangemanget parternas arbete med social anpassning?   Syfte: Syftet med studien är att utifrån ett kontextuellt perspektiv av outsourcing-arrangemang undersöka hur ingående parter arbetar med relationer för att uppnå social anpassning. Med kontextuellt perspektiv syftar vi på de olika aspekter som tillsammans påverkar hur outsourcing-arrangemanget är utformat. Med detta vill vi skapa större förståelse för hur parter i olika outsourcing-arrangemang arbetar med relationerna till varandra i praktiken i en allt mer heterogen outsourcing-miljö. Vidare vill vi undersöka vilken påverkan olika utformning av outsourcing-arrangemang kan ha på detta arbete och hur det påverkar arbetet med att uppnå social anpassning. Vi vill genom detta skapa större förståelse för social anpassning och göra det mer tillämpbart i praktiken genom att utgå från ett mer detaljerat, kontextuellt perspektiv.     Metod: För att uppnå studiens syfte har en kvalitativ metod använts genom intervjuer som metod för insamlandet av data. Det har genomförts sex semistrukturerade intervjuer med sju respondenter som alla har erfarenhet av ledande roller i outsouricing-arrangemang. Teorin som har använts har varit kopplad till bland annat outsourcing-relationer, social anpassning, boundary spannning och offshore-outsourcing.     Slutsats: I praktiken arbetar företagen mer “ad hoc” med att vårda relationerna än vad som teoretiska riktlinjer föreslår. Däremot värderas social anpassning högt och bidrar därför till att inblandade parter praktiskt förändrar processer och sätter in insatser, samt utarbetar välformulerade avtal för att uppnå bättre social anpassning mellan parterna outsourcing-arrangemang. Vidare kan det konstateras att utformningen av outsourcing-arrangemanget, påverkar vilka krav som ställs på relationen i att uppnå social anpassning, och därigenom hur parterna behöver arbeta för att uppnå social anpassning. / Questions: How do clients and vendors operate to enable effective relations and social alignment in outsourcing arrangements?   How does the formation of the outsourcing arrangement affect the work in social alignment creation?   Purpose: The main purpose of this study is to research how organisations work with relationships to achieve social alignment between the parties from a contextual perspective. The contextual perspective involves the different aspects that comprises the forming of the outsourcing-arrangement. Through this, we aim to develop greater understanding in how the parties of an outsourcing arrangement form their relationships in practice in a heterogeneous outsourcing environment. This will give a wider perspective to how these contextual aspects affect the social alignment between parties and how the relationships need to be tended to in achieving effective relationships and social alignment.   Method: In achieving the purpose of this thesis, a qualitative method has been applied to the data collection through a series of interviews. A total of six interviews have been conducted with respondents with great experience and leading roles within outsourcing arrengements. Theories that have been applied involve outsourcing relationships, social alignment, boundary spanning and offshore outsourcing, among others.     Conclusion: The organisations work more “ad hoc” in practice than what theoretical guidelines propose. The concept of social alignment from a practical perspective on the other hand is widely applicable and leads to the changing of processes and arranging of efforts to better achieve social alignment between the parties. Further, the aspects that comprise the shape of the outsourcing arrangement are concluded to have effect on the many ways in which the parties work whit their relationships in the forming of social alignment.

Information Technology (IT) outsourcing is a serious option available to modern managers. An emerging trend is the focus on relationship management in IT outsourcing, imploring organisations to look past tactical objectives and concentrate on strategic outcomes. In a global economy business sponsors are connecting with overseas vendors in IT outsourcing in an attempt to accelerate realisation of benefits. This complicates outsourcing arrangements, because cross-cultural differences may add to the complexity of fostering relationships. This study examines how to manage IT outsourcing relationships in a cross-cultural context to enhance IT outsourcing success. Due to the exploratory nature of this study, interpretivist case studies were adopted. The researcher investigated three IT outsourcing cases within one Chinese organisation. One case has a vendor with a western cultural background and the other two with a Chinese cultural background. The main data were collected through interviews with key managers in the case organisation, complemented by secondary data (such as published reports, internal documents). Some additional data concerning the cross-cultural differences were also collected from the two Chinese vendors and another western vendor who provided corporate strategy consulting services to the case organisation. Analysis of data showed that a good contract implementation, the established trust and the acknowledgement of vendor's high value were recognised as the three distinguishing characteristics of a satisfactory IT outsourcing relationship. In managing relationships the outsourcing company emphasised not only contract implementation but even more importantly communication with vendors, recognition of mutual interests, establishment of social/personal bonds, and appropriate allocation of project resources. It was shown that the relationship management practices influenced the dynamics of a relationship as well as the outcome of an IT outsourcing project. Furthermore, the relationship management in IT outsourcing was found to be culture-sensitive. By demonstrating that companies with different cultural background held different perceptions of relationship management practices and had different understandings of the nature and dynamics of the relationships, this study contributes to the understanding of relationship management in IT outsourcing, especially when cultural differences among the parties are involved. These findings also have practical implications for IT outsourcing involving global and partner-based alliances.

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Information technology (IT) offshoring is an increasingly important strategic tool for firms. Although offshoring activities have led to significant cost savings in many cases, a critical concern is that as IT work moves offshore the deep, experiential knowledge will also move offshore. This knowledge loss may leave the domestic firm with a smaller pool of candidates vying for upper-level management jobs, leading to a future disruption in the management supply chain. In this dissertation three models are developed to investigate how the offshoring of IT activities may affect the domestic firm's knowledge level and as a result the costs of IT work.In the first model the impact of critical model parameters on the offshoring costs is investigated under the assumption that the offshoring rate is fixed. Although short-lived offshoring projects may generate substantial cost savings, long-lived offshoring projects may cause a disruption in the management supply chain, resulting in substantial cost increases. Under some conditions the domestic firm may be locked into an agreement where the backshoring decision becomes economically infeasible.In the second model, the domestic firm is allowed to make the offshoring rate decision. In this case the domestic firm may "steal" learning-by-doing knowledge from the foreign firm with a very low offshoring rate when the knowledge transfer rate is assumed to be constant. This "discontinuity" in knowledge transfer results in a "bang-bang" solution for the offshoring rate. Depending on the level of the disruption in the management supply chain the domestic firm should choose either very small offshoring or full offshoring. In response, it may be in the foreign firm's interest to contract a minimum offshoring rate. The impacts of assuming the knowledge transfer rate as a proportionally increasing function of the offshoring rate is also examined. In this case the middle range offshoring rates are viable solutions for the domestic firm.In the last model, the impact of allowing the domestic firm the real option to alter the offshoring rate is examined. This flexibility provides value in the mid ranges of the disruption of the management supply chain.

This study examines the link between managerial competencies and Information Systems outsourcing (ISO) project success under different types of outsourcing relationships. At present, ISO is a multi-billion dollar industry, and has spawned a new industry related to the management of outsourcing contracts. At the micro-level, ISO offers firms economic, strategic, and technical benefits. Various academic and industry publications have observed the critical importance of managerial competencies in influencing ISO project success. Yet, research that investigates the relationship between managerial competencies and ISO project success is scant. In this study, we developed a theoretical model along with a set of propositions that can be empirically tested. The model and propositions are based on theories that stem from economics (Transaction Cost Economics and Agency Theory), strategic management (core competence, and Resource-based View), and social (Relational Exchange Theory and Social Exchange Theory) perspectives. We also proposed an investigation framework utilizing the case study approach to guide future empirical studies. Our theoretical model and propositions indicate different patterns of managerial competencies for the client and vendor project managers within the different types of ISO relationships. Apart from an empirical study based on our theoretical model and propositions, future research can adapt and/or extend the model to study knowledge residing in other project stakeholders such as project directors, or to study other outsourcing context such as offshore outsourcing projects.

This study examines the link between managerial competencies and Information Systems outsourcing (ISO) project success under different types of outsourcing relationships. At present, ISO is a multi-billion dollar industry, and has spawned a new industry related to the management of outsourcing contracts. At the micro-level, ISO offers firms economic, strategic, and technical benefits. Various academic and industry publications have observed the critical importance of managerial competencies in influencing ISO project success. Yet, research that investigates the relationship between managerial competencies and ISO project success is scant. In this study, we developed a theoretical model along with a set of propositions that can be empirically tested. The model and propositions are based on theories that stem from economics (Transaction Cost Economics and Agency Theory), strategic management (core competence, and Resource-based View), and social (Relational Exchange Theory and Social Exchange Theory) perspectives. We also proposed an investigation framework utilizing the case study approach to guide future empirical studies. Our theoretical model and propositions indicate different patterns of managerial competencies for the client and vendor project managers within the different types of ISO relationships. Apart from an empirical study based on our theoretical model and propositions, future research can adapt and/or extend the model to study knowledge residing in other project stakeholders such as project directors, or to study other outsourcing context such as offshore outsourcing projects.

This study examines the link between managerial competencies and Information Systems outsourcing (ISO) project success under different types of outsourcing relationships. At present, ISO is a multi-billion dollar industry, and has spawned a new industry related to the management of outsourcing contracts. At the micro-level, ISO offers firms economic, strategic, and technical benefits. Various academic and industry publications have observed the critical importance of managerial competencies in influencing ISO project success. Yet, research that investigates the relationship between managerial competencies and ISO project success is scant. In this study, we developed a theoretical model along with a set of propositions that can be empirically tested. The model and propositions are based on theories that stem from economics (Transaction Cost Economics and Agency Theory), strategic management (core competence, and Resource-based View), and social (Relational Exchange Theory and Social Exchange Theory) perspectives. We also proposed an investigation framework utilizing the case study approach to guide future empirical studies. Our theoretical model and propositions indicate different patterns of managerial competencies for the client and vendor project managers within the different types of ISO relationships. Apart from an empirical study based on our theoretical model and propositions, future research can adapt and/or extend the model to study knowledge residing in other project stakeholders such as project directors, or to study other outsourcing context such as offshore outsourcing projects. / Business, Sauder School of / Graduate

Many information technology (IT) outsourcing initiatives fail, resulting in a high impact on business results and customer satisfaction. Without effective strategies, business leaders who outsource their IT services are at considerable risk of failure and stakeholder dissatisfaction. The purpose of this multiple case study was to explore outsourcing strategies that IT managers in Southern Ontario, Canada, used to ensure customer satisfaction. Participants included 9 executives with experience in complex IT outsourcing initiatives. Stakeholder theory and transaction cost economics theory were the conceptual frameworks for the study. Data were gathered using semistructured interviews to query 8 topical areas including IT outsourcing reasons, challenges, and successful solutions. Data analysis using thematic analysis revealed 4 themes: strategic intent for outsourcing, applicable frameworks, risk awareness, and partnership strategies. Key findings included the importance of clients’ and suppliers’ focus on deal principles, innovation, and work-collaboration strategies to enhance performance and customer satisfaction. Information technology managers’ application of the findings of this study may improve business success and contribute to positive social change by revitalizing the clients’ and suppliers’ economies to create job opportunities and improve the quality of lives of employees and their communities.