Outsourcing and Subcontracting

Outsourcing, or contracting-out as it is also known, is a prevalent business practice across all sectors of the economy. This entry will give a number of explanations about why organizations outsource, as well as a number of difficulties which may be encountered when outsourcing...

Intra-organizational information asymmetry in offshore ISD outsourcing

Purpose - Contemporary offshore Information System Development (ISD) outsourcing is becoming even more complex. Outsourcing partner has begun ‘re-outsourcing’ components of their projects to other outsourcing companies to minimize cost and gain efficiencies. This paper aims to explore intra-organizational Information Asymmetry of re-outsourced offshore ISD outsourcing projects. Design/methodology/approach - An online survey was conducted to get an overall view of Information Asymmetry between Principal and Agents (as per the Agency theory). Findings - Statistical analysis showed that there are significant differences between the Principal and Agent on clarity of requirements, common domain knowledge and communication effectiveness constructs, implying an unbalanced relationship between the parties. Moreover, our results showed that these three are significant measurement constructs of Information Asymmetry. Research limitations/implications - In our study we have only considered three main factors as common domain knowledge, clarity of requirements and communication effectiveness as three measurement constructs of Information Asymmetry. Therefore, researches are encouraged to test the proposed constructs further to increase its precision. Practical implications - Our analysis indicates significant differences in all three measurement constructs, implying the difficulties to ensure that the Agent is performing according to the requirements of the Principal. Using the Agency theory as theoretical view, this study sheds light on the best contract governing methods which minimize Information Asymmetry between the multiple partners within ISD outsourcing organizations. Originality/value - Currently, to the best of our knowledge, no study has undertaken research on Intra-organizational Information Asymmetry in re-outsourced offshore ISD outsourcing projects.

Information systems development outsourcing : the role of control configurations

The Control Theory has provided a useful theoretical foundation for Information Systems development outsourcing (ISD-outsourcing) to examine the co-ordination between the client and the vendor. Recent research identified two control mechanisms: structural (structure of the control mode) and process (the process through which the control mode is enacted). Yet, the Control Theory research to-date does not describe the ways in which the two control mechanisms can be combined to ensure project success. Grounded in case study data of eight ISD-outsourcing projects, we derive three ‘control configurations’; i) aligned, ii) negotiated, and 3) self-managed, which describe the combinative patterns of structural and process control mechanisms within and across control modes.

Outsourcing income tax returns : convenient and/or controversial

This paper investigates the outsourcing of income tax return preparation by Australian accounting firms. It identifies the extent to which firms are currently outsourcing accounting services or considering outsourcing accounting services, with a focus on personal and business income tax return preparation. The motivations and barriers for outsourcing by Australian accounting firms are also considered in this paper. Privacy, security of client data, and the competence of the outsourcing provider's staff have been identified as risks associated with outsourcing. An expectation relating to confidentiality of client data is also examined in this paper. Statistical analysis of data collected from a random sample of Australian accounting firms using a survey questionnaire provided the empirical data for the paper. The results indicate that the majority of Australian accounting firms are either currently outsourcing or considering outsourcing accounting services, and firms are outsourcing taxation preparation both onshore and offshore. The results also indicate that firms expect the volume of outsourced work to increase in the future. In contrast to the literature identifying labour arbitrage as the primary driver for organisations choosing to outsource, this study found that the main factors considered by accounting firms in the decision to outsource were to expedite delivery of services to clients and to enable the firm to focus on core competencies. Data from this study also supports the literature which ndicates that not all tax practitioners are adhering to codes of conduct in relation to client confidentiality. Research identifying the extent to which accounting services are outsourced is limited, therefore significant contributions to the academic literature and the accounting profession are provided by this ndicates that not all tax practitioners are adhering to codes of conduct in relation to client confidentiality. Research identifying the extent to which accounting services are outsourced is limited, therefore significant contributions to the academic literature and the accounting profession are provided by this study.

The outsourcing of accounting services and the subsequent accounting education implications

This paper examines the outsourcing of accounting services by Australian accounting firms. It considers what, if any, impact the outsourcing of accounting services may have on accounting graduates if entry level tasks normally completed by graduates are sent to offshore processing centres. This paper categorises the most important prerequisite skills requirements of new junior employees identified by accounting firms in Australia.

Achieving enterprise integration through software customization : part I-evidence from the field

Achieving business and IT integration is strategic goal for many organisations – it has almost become the ‘Holy Grail’ of organisational success. In this environment Enterprise Resource Planning (ERP) packages have become the defacto option for addressing this issue. Integration has come to mean adopting ERP, through configuration and without customization, but this all or nothing approach has proved difficult for many organisations. In part 1 of a 2 part update we provide evidence from the field that suggests that whilst costly, if managed appropriately, customization can have value in aiding organisational integration efforts. In part 2, we discuss in more detail the benefits and pitfalls involved in enacting a non-standard based integration strategy.

Achieving enterprise integration through software customization : part II-enacting the strategy

In part 1 of this update, we put forward the argument that integration in ERP based environments can be achieved in ways other than adopting a software configuration only approach. We drew on evidence from two large ERP implementations to show how, despite the cost implications, some customization, if carefully managed, could prove helpful. In this, the final part of the update, we discuss the benefits, and potential pitfalls, involved in enacting a non-standard based integration strategy. This requires attention to a) broadening the integration definition; b) bringing legacy practices forward and c) developing a customization based integration strategy.

Global outsourcing, production and logistics

Supply chains are the core of most industrial networks in which your business operates. They provide the pipeline through which the products and services flow from supplier to customer across each element within the business activity system. Global supply chain relationships have become the basis for many industries with an international network of firms engaged in the supply of goods and services that must be produced to quality standards in one country and delivered just-in-time for assembly or integration into further production processes in another country, frequently many thousands of miles apart. This topic examines the nature of supply chain management and their role in strategic networking. The previous learning tasks have focused on having the correct internal mechanism to effectively manage the inputs and outputs of the organisation by implementing an effective and transparent management system. This learning task takes a look at how management intent strategy and innovation are used to measure the external factors that influence the overall performance of the organisation and develop new strategies by understanding the business cycle and the people within your market environment.

Outsourcing risk -the regulation of occupational health and safety where subcontractors are employed

The subcontracting out of production tasks and services is not a new phenomenon, but from the late 1970s, and more especially over the last 15years, the practice-now frequently referred to as outsourcing-has grown substantially across a range of industries in most industrialized countries.Recent surveys undertaken in the United States,Europe,and Australia have all identified a rapid increase in outsourcing/subcontracting, especially amongst large private and public sector organizations. The Second Australian Workplace Industrial Relations Survey found that the number of contractors, agency workers, outworkers, and volunteers had increased by almost 40% in the last 5 years to 1997 with contracting out more common in the public sector than the private sector. Outsourcing has become a major tool by which large organizations have sought to increase competitiveness/cut costs, bypass regulatory controls, and secure more flexible employment arrangements.

On secure outsourcing of cryptographic computations to cloud

For the past few years, research works on the topic of secure outsourcing of cryptographic computations has drawn significant attention from academics in security and cryptology disciplines as well as information security practitioners. One main reason for this interest is their application for resource constrained devices such as RFID tags. While there has been significant progress in this domain since Hohenberger and Lysyanskaya have provided formal security notions for secure computation delegation, there are some interesting challenges that need to be solved that can be useful towards a wider deployment of cryptographic protocols that enable secure outsourcing of cryptographic computations. This position paper brings out these challenging problems with RFID technology as the use case together with our ideas, where applicable, that can provide a direction towards solving the problems.

The future of outsourcing in the Asia-Pacific region: Implications for research and practice—panel report from PACIS 2014

This paper summarizes a panel discussion held at the 18th Pacific Asia Conference on Information Systems (PACIS) in Chengdu, China, 2014, with the same title. The panel discussed the future of outsourcing in the Asia-Pacific region (specifically the importance of outsourcing, new trends, and issues in outsourcing). This paper provides directions for future research that surpasses regional specificity (i.e., the Asia-Pacific region), and contributes to research interests on outsourcing in general.

Vendors' perspectives of coordination in the information technology offshore outsourcing industry : An exploratory study from the Philippines

This study investigates how offshore information technology (IT) service providers (vendors) coordinate work with their clients (employers) in order to succeed in the global IT offshore outsourcing industry. We reviewed literature on coordination studies, interviewed offshore service providers in the Philippines, and used thematic analysis to analyse coordination practices from the point of view of these individual vendors in a newly industrialized country. We used Olson and Olson's framework on 'collaboration at a distance' as a lens to structure the results. The study provides an understanding of vendors' individual attitudes towards the coordination of distributed work and draws attention to how differences in power affect the work situation of vendors, and by implication all stakeholders. We offer this insight as a way to enhance existing CSCW frameworks, by imbuing them with the perspective of non-equal relationships. The study found that vendors were generally able to produce outputs that satisfy their clients, however these results were only achieved because individuals were willing to take risks and make sacrifices in their personal lives. The relationship was further characterised by a complex interplay between the client's control of the overall work arrangements and the vendors' ability to establish a level of autonomy in their work practices and their flexible use of coordination tools.