The impact of ITIL (information technology infrastructure library) recommended practices on the IT outsourcing relationship

Over the last two decades, the outsourcing of IT services has become a popular topic for many IS researchers. Furthermore, managing IT services (both internally and externally provided) has become an emerging area for academic research, given the criticality of IT services in modern organizations. One of the better known IT service management frameworks is the Information Technology Infrastructure Library (ITIL) framework. While there are many claims made about the relationship between ITIL and IT outsourcing, these claims still need further empirical research. Using data gathered from a preliminary focus group, this study investigates how ITIL impacts recommended practices on the success of IT outsourcing arrangement.

A model for studying IT outsourcing relationships

The trend towards using information technology (IT) outsourcing to exploit core competencies and attain competitive advantage is increasing in organizations. In this regard, researchers are studying organizations to understand the variety of factors that influence IT outsourcing relationships. This paper presents a model of factors influencing IT outsourcing relationship efficacy. The model is a synthesis of the work of ten groups of authors on IT outsourcing relationships, and is intended as a guide to question formulation for future research.

The quality-of-relationship construct in IT outsourcing

This paper reports on the conceptualization and measurement of an important management controllable factor affecting the success of an information technology outsourcing (ITO) arrangement, namely Quality of Relationship (QoR). Attributes of the construct were identified from an analysis of the literature, and key attributes selected based on interviews with 29 managers in four pairs of client and supplier organizations. Construct validity of the resultant measure is assessed through comparison with qualitative interview data, and through tests of association between our measure and perceived overall ITO success. The results suggest that the ten indicators identified in the paper provide a valid measure of the quality of relationship that can be used by both client and supplier managers, and researchers, in assessing the health of an ITO relationship.

IT outsourcing issues in Singapore : the vendor's perspective

Most studies undertaken in the area of IT outsourcing seem to focus only on the customer’s perspective leaving a gap in knowledge about the vendor’s perspective. This study aims to correct this deficiency by investigating the views of four organisations providing IT services in Singapore, and comparing this to the current literature base of customer views. The findings showed that the vendor’s views about security, contract management and flexibility differed from the customer’s point of view. However, two issues, partnerships and vendor inexperience, seem to match the vendor issues found in this study. Additionally, two approaches were found to be used by vendors in the IT outsourcing activities, multiple-team approach and single-team approach. A multiple–team approach is likely to be used by vendors having a contract-based relationship and single-team approach is likely to be used by vendors having a partnership-based relationship.

Reconceptualising outsourcing in the public sector : choices and outcomes

National Competition Policy’s introduction encouraged the use of outsourcing in the public sector, but variations in the extent and types of services outsourced were evident. Through reviewing the economic and political literature, this paper has uncovered six reasons for outsourcing that straddle the two paradigms. The desire to reduce costs and increase efficiency, focus on core competitive advantage, introduce workforce flexibility, manage industrial relations’ problems, satisfy decision-makers’ personal objectives and adhere to the neo-liberal government agenda are discussed. The paper puts forward a number of models which delve into the relationship between the theoretical factors which economic and political theorists have proposed as being important in making the decision to outsource and delineates between those factors which are perceived by decision-makers as important in their reasoning and those which are unperceived but impact on the outcomes. It concludes that is only by understanding the complex relationship between reasons, and perceived and unperceived factors, will outcomes be able to be predicted.

The derivation of a conceptual model for outsourcing IT security

IT security outsourcing is the establishment of a contractual relationship with an outside vendor to assume responsibility for one or more security functions. Outsourcing in IS has had a variable history of success and the complexity of the decision making process leads to a substantial degree of uncertainty. This is especially so in the realm of IS security since the protection of both hardware and software systems in is placed in the hands of an external provider. This is the second paper discussing the improvement of the effectiveness of the decision making process by means of a conceptual model using Soft System Methodology techniques that integrates security benefits, costs and their respective performance measures. In this paper the methodology used to develop the model and its validation are discussed.

The derivation of a conceptual model for IT security outsourcing

IT security outsourcing is the establishment of a contractual relationship between an organization with an outside vendor which assumes responsibility for the organisation’s security functions. Outsourcing in IS has had a variable history of success and the complexity of the decision making process leads to a substantial degree of uncertainty. This is especially so in the realm of IS security since the protection of both hardware and software systems is placed in the hands of an external provider. This paper is a fuller and more comprehensive paper of a previous paper outlining the effectiveness of the decision making process by means of a conceptual model using Soft System Methodology techniques that integratessecurity benefits, costs and their respective performance measures. In this paper the methodology used to develop the model is discussed in detail.

Outsourcing in the Australian health sector : the interplay of economics and politics

Purpose – The paper discusses the reasons and approaches used at three health organisations in introducing outsourcing. It specifically answers the question: why have managers of health organisations outsourced some functions in preference to others?

Design/methodology/approach – This research employs a case study method making use of qualitative analysis. The health organisations were chosen first as representatives of their type, and secondly due to the nature of the outsourcing decisions made. The first health organisation operates in the rural sector; the second is a metropolitan network; and the third is a large metropolitan hospital, which, in contrast to the other two case study organisations, had made only one decision to outsource, producing the largest outsourcing contract in health in Australia. Furthermore, this situation was distinctive as the contract was terminated and re-issued to another private sector organisation.

Findings – The reasons for outsourcing varied within and between health organisations. Although generally they were made on the bases of the characteristics of the labour market, employee skill levels and the nature of industrial relations, the perception of what was core, the level of internal management skills, the ability of internal teams to implement change and the relationship between management and staff. Even though cost savings and a downsized labour force resulted, generally these occurred even when services were not outsourced, through the use of other change processes, such as introducing new technology, changing structures and promoting workforce flexibility. The interplay of political reasons and economic effects was evident along with the political nature of the decision-making and processes used. The paper concludes that the power of managers was a moderating factor between the desire for outsourcing and whether outsourcing actually occurred.

Research limitations/implications – Although this research was conducted solely within the health sector it has implications for other public sector bodies and the private sector.

Practical implications – Managerial decision making can be enhanced with the exploration of the full complement of reasons for the outsourcing decision.

Originality/value – The paper has value to both academics researching in the public sector and public sector managers.

Impact of configuration on IT outsourcing relationships

This paper tests the extent to which four main factors that help define an organization’s information technology (IT) outsourcing configuration contribute to the quality of IT outsourcing relationships between clients and suppliers. It presents a research model that is tested using an analysis of substantive in-depth interviews with a total of 28 client and supplier managers in four pairs of client and supplier organizations. The findings suggest that a sound outsourcing configuration is important for the successful development of a quality relationship between parties. Thus, organizations seeking to increase their operational excellence and decrease the operational cost of IT outsourcing, and ultimately to improving the success of their IT outsourcing arrangements, must put more emphasis on, and take a more planned approach to, configuring their IT outsourcing arrangements.

The impact of switching costs on the decision to retain or replace IT outsourcing vendors

While the IT outsourcing market is growing, outsourcing vendors are being replaced more frequently by firms. Since replacing vendors can affect the stability and quality of the IT services a firm receives, it is important to understand the drivers behind the decision to replace/retain vendors. This paper examines the impact of switching costs on this decision. We classify the various examples of switching costs into three categories (relational, financial and procedural) and develop a model to explain their role in the decision to replace or retain a vendor. The model also includes possible moderators of the relationship between switching costs and the vendor replacement decision. This model will be evaluated through a series of case studies of firms who have made this decision, and the refined model will be tested with a survey of IT outsourcing managers.

Effects of knowledge management on client-vendor relationship quality : the mediating role of global mindset

Purpose: This study argues that knowledge management (KM) by itself has only limited effects on client–vendor relationship (CVR) of global providers of highly customised services. Rather, it is the ability of top management to properly evaluate and utilise a vast array of complex knowledge which allows global firms to develop and maintain superior CVR. The paper tests the proposition that global mindset (GM) of top management mediates the effects of KM on CVR quality. Design/methodology/approach: The paper uses survey data from a sample of 68 international service providers (ISPs) in the information technology sector in India and partial least squares approach to structural equation modelling to test the hypotheses. Findings: The results show that both KM and GM have positive and statistically significant effects on the quality of CVRs. The results also confirm that the GM of top management has significant and substantive mediation effects on the relationship between KM and CVR quality. Research limitations/implications: The small size of the sample and the focus on ISPs in a single country constitute the main limitations of the study. Future research should ideally draw from a larger sample of ISPs from multiple countries and sectors in order to allow for greater generalisation of the findings. Practical implications: ISPs will benefit from developing the GM of their top management teams to enhance their CVRs. Originality/value: The paper provides new insights into how, in an international context, firms can transform their KM into superior CVR quality through the development of GM.