Constructing customised models and providing information to support IT outsourcing decisions

Abstract

Information technology (IT) outsourcing is a favourable option for enhancing core organisational competencies/ activities. Provident decision making in selecting an optimum IT outsourcing vendor involves judgements about qualitative and quantitative factors. The paper discusses IT outsourcing and proposes a customised computer-orientated model based on action research and analytical hierarchy process. The aims are to: specify, combine, structure, measure and prioritise key qualitative and quantitative risk elements in IT outsourcing; and provide relevant information to support managers in outsourcing decision making. The results are expected to help managers in minimising business risks and in improving quality of IT outsourcing. Appreciation and gratitude are offered to Alex Paterson of Renfrewshire Enterprise, Paisley and to the Manufacturing Director, Ian McNair, and other management personnel at Compaq Computer Manufacturing Limited, Bishopton, Scotland, for their support in the research programme.

Information systems outsourcing reasons in the largest Spanish firms

“…the potential security problems related to the service, the unclear balance between costs and benefits, the possible IS staff opposition, the excessive dependence on the supplier, the inability to adapt to new technologies, the irreversibility of the decision once it has been made, the hidden costs generated by the contract, or the loss of basic knowledge in the client organisation (Akomode, Lees & Ingens, 1998;Barthélemy, 2001;Dué, 1992:79-80;Earl, 1996:26-32;Fried, 1995:160-164;King & Malhotra, 2000;Lacity & Hirschheim, 1993b;Martinsons, 1993;Meyer, 1994:24;Palvia, 1995:269-270;Shepherd, 1999:65;Lacity, 1996:51, Willcocks, Lacity andKern, 1999;Willcocks, Lacity and Fiztgerald, 1995). These risks will be greater if the client firm opts for total outsourcing, which is why a more intelligent alternative would be to resort to selective outsourcing (Judenberg, 1994:34;Jurison, 1995:239;Lacity, Willcocks & Feeny, 1995:89;Lacity, Willcocks & Feeny, 1996;Willcocks & Choi, 1995:77;Willcocks, Fitzgerald & Feeny, 1995:65).…”

A descriptive analysis of IT outsourcing configuration

“…Information Systems (IS) outsourcing has become a basic strategy as far as the management of the unstoppable changes triggered by Information Technologies (IT) 1 is concerned (Akomode, Lees, and Irgens, 1998;Hoecht and Trott, 2006). This gives IS managers the opportunity to concentrate their resources on core competitive powers (Leem and Lee, 2004).…”

Competitive Dimension of Outsourcing Relations in Global Networks

“…More generally, many authors have shown a greater efficiency and an improvement of operational performance, including costs, speed , quality and flexibility (McFarlan & Nolan, 1995;Embleton & Wright 1998;Akomode et al, 1998;Lonsdale & Cox, 2000). Some benefits are reported also for human resources: outsourcing allows to enhance the personnel, as they are no longer engaged in routine work, and they can focus more on the aspects of firm's focal activities, improving professionalism.…”

“…Several authors over the years have identified flexibility as an advantage, not only thanks to the partner specificity, but also to the ability to redefine the organisation of the firm itself (Downey, 1995;Akomode et al, 1998).…”