Advanced Outsourcing Practice: Rethinking Ito, Bpo and Cloud by Mary C. Lacity

By Mary C. Lacity

A wealthy database of over 2,200 outsourcing preparations, studied throughout sectors and geographies, and through the years, from inception, via agreement signing, to results. This publication has unheard of perception into the powerful practices which have been confirmed potent time and again.

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1996) found clients had higher levels of satisfaction from outsourcing systems operations and telecommunications than they did from outsourcing applications development, end user support, and systems management. Multi-Sourcing. Researchers have studied multi-sourcing, a client organization’s decision to engage multiple providers. g. Saxena and Bharadwaj 2009; Levina and Su 2008). , Levina and Su 2008). Only one study found negative effects: In a study of call centers, Borman (2006) found that multi-sourcing made it more difficult to coordinate work and to protect service quality.

Their 4 Robust Practices from Two Decades of ITO and BPO Research event study is unique, because they did not just look at the overall change in stock market value, which tends to be very small. Instead, they looked at the differences between announcements that led to above Average Abnormal Returns (AAR) versus announcements that led to below AAR. The authors examined 192 IT outsourcing announcements during a nine-year period (1995– 2003). On the day of an announcement, 97 announcements lead to negative AAR and 95 announcements lead to positive AAR.

4 Common outsourcing risks Backlash from internal staff Biased portrayal by providers Breach of contract Cultural differences between client and provider Difficulty in managing remote teams Excessive transaction costs Hidden costs Inability to manage supplier relationship Inflexible contracts Infringement of intellectual property rights Lack of trust Loss of autonomy and control Loss of control over data Loss of control over provider Loss of in-house capability No overall cost savings Perceived as unpatriotic (offshore) Poor provider capability, service, financial stability, cultural fit Security/privacy breach Supplier employee turnover/burnout Supplier employees are inexperienced Supplier employees have poor communication skills Supplier goes out of business Supplier has too much power over the customer Transition failure Treating IT as an undifferentiated commodity Uncontrollable contract growth Vendor lock-in (high switching costs) Lacity et al.

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