• Asia pacific journal of information systems
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• v.17 no.3
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• pp.131-146
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• 2007

Recently, the role of IT service providers has been enlarged from managing a single function or system to reconstructing entire information management processes in new ways to contribute to shareholder value across the enterprise. This movement toward extensive and complex outsourcing agreements has been driven by the assumption that outsourcing information technology functions is a reliable approach to maximizing resource productivity. Hiring external IT service providers to manage part or all of its information-related services helps a firm focus on its core business and provides better services to its clients, thus obtaining sustainable competitive advantage. This practice of focusing on the strategic aspect of outsourcing is referred to as strategic sourcing where the focus is capability sourcing, not procurement. Given the importance of the strategic outsourcing, however, to our knowledge, there is little empirical research on the relationship between the strategic outsourcing orientation and outsourcing performance. Moreover, there is little research on the factor that makes the strategic outsourcing effective. This study is designed to investigate the relationship between strategic IT outsourcing orientation and IT outsourcing performance and the process through which strategic IT outsourcing orientation influences outsourcing performance, Based on the framework of strategic orientation-performance and core competence based management, this study first identifies core competency orientation as a proper strategic orientation pertinent to IT outsourcing and IT outsourcing process management capability as the mediator to affect IT outsourcing performance. The proposed research model is then tested with a sample of 200 firms. The findings of this study may contribute to the literature in two ways. First, it draws on the strategic orientation - performance framework in developing its research model so that it can provide a new perspective to the well studied phenomena. This perspective allows practitioners and researchers to look at outsourcing from an angle that emphasizes the strategic decision making to outsource its IT functions. Second, by separating the concept of strategic orientation and outsourcing process management capability, this study provides practices with insight into how the strategic orientation can work effectively to achieve an expected result. In addition, the current study provides a basis for future studies that examine the factors affecting IT outsourcing performance with more controllable factors such as IT outsourcing process management capability rather than external hard-to-control factors including trust and relationship management. This study investigates the major factors that determine IT outsourcing success. Based on strategic orientation and core competency theories, we develop the proposed research model to investigate the relationship between core competency orientation and IT outsourcing performance and the mediating role of IT outsourcing process management capability on IT outsourcing performance. The model consists of two independent variables (core-competency-orientation and IT outsourcing process management capability), and two dependent variables (outsourced task complexity and IT outsourcing performance). Comprehensive data collection was conducted through an outsourcing association. The survey data were analyzed using a structural analysis method. IT outsourcing process management capability was found to mediate the effect of core competency orientation on both outsourced task complexity and IT outsourcing performance. Further analysis and findings are discussed.

• Journal of the Korean Operations Research and Management Science Society
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• v.27 no.3
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• pp.21-40
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• 2002

Recently, IT outsourcing has become a very important management strategy which implements information systems in organizations. This paper investigates the risks and strategic recognition as a key factors affecting on the degree of IT outsourcing. Specifically the risks of IT outsourcing and its four components-risk of control, risk of economical, risk of technical, risk of relational - are examined to be a negative effect on the degree of outsourcing. And strategic recognition about outsourcing is examined how to affect en the risks and the degree of IT outsourcing. To empirically test these relationships, data ere gathered from senior IT managers in 86 corporations. Results of this study show that the degree of outsourcing is strongly influenced by risk of control, risk of economical, risk of relational. But risk of technical does not influence on the degree of outsourcing. And strategic recognition about outsourcing is found that is negative effect on the risks of IT outsourcing and positive effect on the degree of IT outsourcing. The results provide a good framework to minimize the risks for IT outsourcing success.

• Journal of Information Technology Applications and Management
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• v.13 no.4
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• pp.181-195
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• 2006

In recent years, increasing attention has been paid on how to manage a successful relationships between the receiver and provider of the Information Systems(IS) outsourcing services. This study explores the sources of influence for successful outsourcing relationships. Based on the Jaworski's control combination model for marketing, we (1) propose a management combination model of outsourcing relationships where trust is introduced as an intervening variable and outsourcing compleyity as a moderating variable, (2) test this model using a sample of 94 outsourcing projects in 36 organizations that have outsourced there IS functions to external service providers. The results indicated several significant findings. First, the deployment of management mechanism such as contract mechanism and trust building has a significant effect on the outsourcing success through trust only. Second, complexity of outsourcing activities has a moderating effect on relationship management combinations.

• Korean System Dynamics Review
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• v.7 no.1
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• pp.229-243
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• 2006

In recent years, due to a lack of expertise, many organizations have been devoting large portions of their budget to outsourcing. Outsourcing is now often regarded as a solution for all problems. However, the lack of clear understanding of the effectiveness of outsourcing could lead to many problems in organizations even though outsourcing is known to provide advantages to some organizations. Moreover, outsourcing could have a negative effect on knowledge management in some aspects. There have been and continue to be numerous studies into outsourcing; however, their findings primarily relate to cost reduction in short-term. Regardless of increasing demands on outsourcing and the importance of knowledge management, little research has focused on decision-making structure from knowledge management perspective. This paper attempted to quickly identify promising movements with potentially significant effects on IT/IS outsourcing.

• Asia pacific journal of information systems
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• v.7 no.3
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• pp.39-59
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• 1997

This study presents the growth strategy of outsourcing service by finding out the differences of importance between user firms and system integration(SI) firms in Korean outsourcing business, The result of data analysis reveals that there are siginificant differences between user firms and SI firms in some components of information systems(IS) outsourcing services. User firms regarded integation of distributea data centers as the prominent issue of IS environment changes. Meanwhile, SI firms chose management of IS/VAN center, office automation(OA), and management of global network, as the more important issues in the application area of outsourcing. Among the merits of outsourcing, both of them considered cost reduction and IS flexibility as the most important factors, However, they chose the difficulty of management control and the lack of operation knowledge among the demerits of outsourcing, Also, they commonly selected overall IS consulting among the components of outsourcing diffusion. In the question of future outsourcing services, user firms chose the adoption of client/server architecture, while SI firms selected the application of multimedia. These results show that there are some differences of preference between user firms and SI firms. Most of user firms consider the outsourcing to maximize information utilization, while the service suppliers focus on new IT adoption and its application to organization. For the strategic use of outsourcing services, SI firms are required to establish the diffusion strategy to meet the outsourcing needs of user firms.

• Journal of Information Technology Services
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• v.3 no.1
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• pp.127-146
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• 2004

Recently, Information systems (IS) outsourcing has been becoming a viable strategic alternative in the management of information systems. Accordingly, the demand of research in practice has been changed from how to decide IS outsourcing to how to manage IS outsourcing. However, there is little known about the management of IS outsourcing in existing literature. Moreover, the existing studies suggest conflicting solutions in accordance with their own perspectives : competitive relationship vs. cooperative relationship. The purpose of this study is to address this conflicting result, and consequently to enhance an understanding of IS outsourcing management by introducing the concept of interorganizational control. To meet this purpose, this study adopts Lee(2003)'s integrative model of IS outsourcing management based on the existing literature from different management disciplines and different perspectives, and then conducts four case studies. The result reveals that users, as well as IS manager, play a critical role in controlling IS outsourcing. Moreover, they implement a portfolio of control modes including both informal and formal modes. The result also suggests that the choice of particular control mechanism depends on client, supplier, task, and relationship characteristics.

• Journal of the Korean Operations Research and Management Science Society
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• v.33 no.1
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• pp.71-105
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• 2008

Various stakeholders within and outside of the organization are involved and participate in the outsourced IS development. As their interests and goals are different conflict arises in the process of their interaction, and it is an important factor affecting outsourcing success. The study focuses on the conflict between client users and vendor, i.e. main conflict in the outsourcing project, and examines the relationship of conflict with project success, the antecedents of conflict, and investigates the effectiveness of conflict resolution facilitation. An integrated conceptual model is developed grounded on is outsourcing, IS development, project management, and organizational behavior literature. Nine specific hypotheses on the conflict in outsourcing projects are proposed, and data collection and analysis are performed with 214 ISD outsourcing projects. Results indicated that the conflict between client users and vendor in outsourcing projects was found to have negative effects on project success. Main causes affecting conflict were examined, and relative influences of these causes were clarified. Recently internal IT personnel have been faced their role change with the increase of outsourcing, and the importance of their conflict resolution facilitation was highlighted.

• Culinary science and hospitality research
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• v.12 no.3 s.30
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• pp.17-31
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• 2006

There have not been the best method for improving the management system of an enterprise. Its management system must be changed according to new environment. Therefore, the food service industry had to accept outsourcing strategies to reduce cost and construct the core-capability of enterprise. In this respect, we studied the introduction and the satisfaction in outsourcing strategies for family restaurants, including a post of enterprise, decision on the supply-enterprises, contract preparation, cost of outsourcing, recontract items and outsourcing result estimation. The results of this study were as follows; First, 90.5% of managers for 7 family restaurants felt that outsourcing is needed. Second, the post of the outsourcing for 7 family restaurants was from 1 to 8; supply for raw food material, cleaning and equipment repair. The introduction of outsourcing for 7 family restaurants started in 1995 and it had constantly made progress up to 2003. Thirdly, the advantages of the outsourcing for 7 family restaurants were increase of benefit, improvement of controllable-power for family restaurants and improvement of employees' satisfaction. Fourthly, 42.9% of managers were satisfied and 4.8% of them were not satisfied. 36 to 40 year old vice-managers were very satisfied with the result of the outsourcing. Fifth, 90.5% of family restaurant managers found the outsourcing to be needed and especially managers in their late thirties realized the outsourcing.

• Journal of Information Technology Services
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• v.2 no.2
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• pp.135-156
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• 2003

This study attempts to understand the management of IS outsourcing by introducing the concept of inter-organizational control. To meet this purpose, this study develops integrative model of IS outsourcing management based on the existing literature from different management disciplines : MIS, Marketing, Organization, Strategic Management, and different perspectives : economic, social, organizational perspectives. In addition, several implications are presented, and future directions are suggested.

• Proceedings of the Korean Operations and Management Science Society Conference
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• 2005.05a
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• pp.1072-1082
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• 2005

This study develops a contingency fit between client IT capability and vendor competence in IS outsourcing relationship by integrating both the contingency theory in organization and the relationship theory in IS outsourcing. By adopting a fit as a moderation, the relationship intensity of IS outsourcing is hypothesized to be influenced by the fit between client IT capability and vendor competence, thereby leading to the success of outsourcing. The testing data was obtained from 20 IS outsourcing projects from both clients and vendors in Korea. The research model proposed in this study was then tested using the structural equation model (SEM). As expected, the result shows that when there is a fit between client IT capability and vendor competence, higher level of relationship intensity and outsourcing success exhibits. The findings have significant impactions for further research and practice.