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Article
Publication date: 1 March 2000

Dean Elmuti and Yunus Kathawala

Global outsourcing is a management strategy by which an organization delegates major, non‐core functions to specialized and efficient service providers. Global outsourcing

13155

Abstract

Global outsourcing is a management strategy by which an organization delegates major, non‐core functions to specialized and efficient service providers. Global outsourcing represents a significant shift in the way organizations manage and staff their business support activities. While global outsourcing has received considerable attention from practitioners and consultants, there has been little empirical research published on global outsourcing. This study explores why and how organizations are using global outsourcing and identifies problems that effect global outsourcing success. The results showed that organizations generally considered themselves successful at global outsourcing. However, while they achieved significant improvement in organizational effectiveness, they were not achieving the order of magnitude improvements ascribed to global outsourcing.

Details

International Journal of Manpower, vol. 21 no. 2
Type: Research Article
ISSN: 0143-7720

Keywords

Article
Publication date: 1 December 2003

Khalid S. Soliman

The phenomenal growth of the Internet has persuaded many companies of its potential as a channel for outsourcing information systems applications. Application service providers…

3352

Abstract

The phenomenal growth of the Internet has persuaded many companies of its potential as a channel for outsourcing information systems applications. Application service providers (ASP) are firms that offer outsourcing application services to many organizations via the Internet. By contracting ASP, organizations are having information technology (IT) staff focusing their efforts on core competencies while, at the same time, capitalizing on the expertise of outsourcer. On the other hand, many ASP turn some of their projects to global outsourcer. The study develops a framework that identifies the critical factors influencing ASP' decision to outsource globally. These factors are product development costs, IT talent, product quality, communication technology, tax incentives, and cultural differences. The rest of the paper discusses the differences between different types of global outsourcing, explore the emerging trend and advantages of utilizing ASP, and recommend measures to ensure the success of projects to be developed globally. The framework developed in this paper represents a foundation for more rigorous empirical research to identify the significance of each influencing factor. The results can provide ASP managers with a road map that addresses issues of concern in global outsourcing.

Details

Business Process Management Journal, vol. 9 no. 6
Type: Research Article
ISSN: 1463-7154

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Article
Publication date: 1 February 2013

Daisy Mathur Jain and Reema Khurana

The purpose of this paper is to study sustainability of the global business model of software outsourcing with perspective of Indian vendors.

1679

Abstract

Purpose

The purpose of this paper is to study sustainability of the global business model of software outsourcing with perspective of Indian vendors.

Design/methodology/approach

In order to obtain results as per the stated purpose, the authors have done an extensive literature review search in the e‐journals databases: ABI/INFORM Complete, EBSCO Business Source Complete, Emerald Management Xtra and Science Direct. Over and above these databases and journals, NASSCOM reports, survey and some books were also referred for literature review. Finally 59 references listed at the end of the paper were used for the stated purpose.

Findings

The paper studies trends in software industry and outsourcing models, which Indian vendors are offering to their global clients. Each model is evaluated analytically for its advantages and shortcomings subsequently the paper concludes by stating the need for a sustainable global business model in software outsourcing from Indian perspective.

Research limitations/implications

The paper studies business of software at a global level and subsequently narrows its focus on the models being provided by the Indian vendors. It identifies need for a sustainable model to be used by the Indian vendors; the limitation of the paper is it concludes with the need identification and is from an Indian vendor perspective. The needs identified can be further used as a basis for hypothesis formulation, questionnaire design, data survey and analysis so that blue print of the proposed model can finally emerge, also the study can be expanded to include global vendors.

Practical implications

The following paper analytically studies current trends in global business of software sourcing, and identifies pros and cons of the models adopted by Indian vendors. It identifies the need for a sustainable global business model for software outsourcing; in case the need is fulfilled it will definitely add value to India as a software sourcing destination and lead to more revenue generation which will eventually culminate into a large‐scale and long term economic and social impact. The study also has several research and public policy formulation implications.

Originality/value

The paper is completely original work of the authors where the value addition is clearly seen by studying the advantages and shortcomings of the existing models of software outsourcing adopted by Indian vendors and identifying the need for sustainability therein.

Details

Business Process Management Journal, vol. 19 no. 1
Type: Research Article
ISSN: 1463-7154

Keywords

Article
Publication date: 1 October 2001

Edward R. Lyons

Globalisation is one of the key economic, political, social and technological drivers of our age. Concurrently, outsourcing worldwide has topped US$1tn per annum.2 In the future…

1069

Abstract

Globalisation is one of the key economic, political, social and technological drivers of our age. Concurrently, outsourcing worldwide has topped US$1tn per annum.2 In the future, the strategic management of corporate real estate (CRE) will no longer be viewed in isolation from these trends, as the ethics of corporate governance demand that multinational companies view their property assets from the same global vantage point as any other factor of production. This paper looks at the compelling drivers towards an international approach to CRE management, the benefits of leveraging value across borders and key solutions to the apparent paradox of global consistency and cultural diversity. It draws on outsourcing research in other markets, pinpoints trends and directions and uses case study examples in order to propose a new holistic approach to strategic property management.

Details

Journal of Corporate Real Estate, vol. 3 no. 4
Type: Research Article
ISSN: 1463-001X

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Article
Publication date: 6 June 2008

Jon Edgell, Gabriel E. Meister and Nigel Stamp

The purpose of this paper is to collate Morrison & Foerster's view on the state of the global outsourcing market and their lawyers' experience with a wide range of sourcing…

2710

Abstract

Purpose

The purpose of this paper is to collate Morrison & Foerster's view on the state of the global outsourcing market and their lawyers' experience with a wide range of sourcing projects in a number of geographic and sectoral markets.

Design/methodology/approach

The global sourcing trends 2008 report is co‐authored by Morrison & Foerster partners based in Europe, the USA and Asia and edited by the Chair of Morrison & Foerster's Global Sourcing Group. Initially, colleagues in the Global Sourcing Group were surveyed and this team of more than 60 lawyers in the firm's offices around the globe were asked for their observations over the last 12 months, and predictions for the coming months, based on advising on a wide range of sourcing projects in a number of geographic and sectoral markets. Soundings were taken from more than 50 clients from a client base which includes Fortune 100 companies, some of the world's largest financial institutions; public sector organizations; outsourcing service providers; and a range of corporates from diverse industry sectors including media, travel and logistics, insurance, healthcare and pharmaceuticals, and IT. Other advisors in the sector were spoken to also, including many of the leading outsourcing consultancies. Results of this informal survey were then compared with the annual sourcing reports the firm had produced at the start of 2006 and 2007.

Findings

The report finds: an economic slowdown will see a move back towards cost‐driven outsourcing – despite the fact that, over the long term, service‐driven or value‐driven deals tend to deliver more stable, successful relationships. Greater emphasis is seen on post‐signature support, governance, supplier management, and the role of the retained function. As the pharma industry sharpens its focus on the core competencies needed to sustain its pipeline of new drug candidates, increased pharmaceutical outsourcing in 2008 and thereafter is expected to be seen. As all companies seek to reduce their corporate carbon footprint, a greater take up of outsourced services that deliver “Green IT” is expected.

Originality/value

This paper provides a summary of global sourcing trends in 2008, comment on the state of the outsourcing market and some trends to watch out for in 2008.

Details

Strategic Outsourcing: An International Journal, vol. 1 no. 2
Type: Research Article
ISSN: 1753-8297

Keywords

Article
Publication date: 10 May 2018

Bella Belerivana Nujen, Lise Lillebrygfjeld Halse, Rickard Damm and Hallgeir Gammelsæter

Against the recent trend toward reversed global outsourcing, the purpose of this paper is to provide insights on how the internal process can be handled once the decision on…

1139

Abstract

Purpose

Against the recent trend toward reversed global outsourcing, the purpose of this paper is to provide insights on how the internal process can be handled once the decision on reverse outsourcing has been made. The authors focus in particular on in-house knowledge and technology requirements.

Design/methodology/approach

To explore the topic at hand, the researchers conducted in-depth semi-structured interviews with five companies operating in two different industry sectors.

Findings

Reversed outsourcing accentuates challenges relating to retained knowledge. When embarking on reversed outsourcing, companies need to acknowledge the effort to revive and renew capabilities in order to perform technical operations and advanced manufacturing production.

Research limitations/implications

The research is based on case studies in a Scandinavian context. Further empirical research from other high-cost locations is needed to validate the findings.

Originality/value

Explorative qualitative research is scarce in the emergent literature on reversed outsourcing. The paper provides practical and theoretical insights into how to handle diminishing knowledge in companies that are re-evaluating their sourcing strategies. It adds a knowledge dimension within the emergent literature. A framework for key success factors and propositions is also provided.

Details

Journal of Manufacturing Technology Management, vol. 29 no. 4
Type: Research Article
ISSN: 1741-038X

Keywords

Article
Publication date: 22 October 2018

Nelson Oly Ndubisi and Arne Nygaard

The purpose of this paper is to demonstrate that costs reduction is no longer a complete indication of performance and should not be attained at the expense of the firm’s…

5952

Abstract

Purpose

The purpose of this paper is to demonstrate that costs reduction is no longer a complete indication of performance and should not be attained at the expense of the firm’s sustainable social responsibility and environmental aspects. The question of whether outsourcing is a “blessing” or a “lesson” remains unresolved in the minds of practitioners and researchers alike. The literature is replete with the up- and down-sides of outsourcing, all going in different directions, making it very cumbersome particularly for practitioners to articulate when and what to outsource (if at all) and how to contain or mitigate outsourcing downsides.

Design/methodology/approach

Outsourcing as a two-edged sword can be value creating strategy or a firm’s soft spot. This paper focusses on the latter through a review of sourcing in two leading multinational companies: Benetton, in the fast fashion industry, and Nestlé, in the food industry.

Findings

Benetton experienced the biggest catastrophe in the garment industry, the Rana Plaza collapse. Nestlé went through the horse meat scandal, perhaps one of the most complex food crime cases in history. Both cases illustrated the strategic vulnerability that arises from the international outsourcing of production.

Research limitations/implications

Clearly, production costs are no longer a complete indication of performance as the two cases unveil. Management control systems should be especially vigilant when outsourcing transfers social and environmental responsibility from one contract to another in a global business context. Monitoring costs cannot be outsourced when it comes to sustainable social responsibility and environmental aspects.

Practical implications

Firms can leverage relationships with stakeholder groups, activists and NGOs to help them to monitor their international operations. Institution-based trust to protect brands, increased integration and control are necessary mechanisms.

Originality/value

Indeed, global outsourcing in any industry should transfer not only industrial operations but also credible and responsible social and environmental benchmarks.

Details

Journal of Business Strategy, vol. 39 no. 5
Type: Research Article
ISSN: 0275-6668

Keywords

Article
Publication date: 26 June 2007

Christopher Clott

This is a preliminary study that explores the nature of decision making in the implementation process through an examination of environmental scanning and interpretation…

2518

Abstract

Purpose

This is a preliminary study that explores the nature of decision making in the implementation process through an examination of environmental scanning and interpretation activities of project managers tasked with implementing offshore outsourcing activities.

Design/methodology/approach

The model utilized for this study suggests that individual scanning is filtered through distinct organizational types and control that will influence implementation efforts to find solutions to major issues associated with offshore outsourcing. The methodology uses a semi‐structured detailed set of interviews to gather data.

Findings

The preliminary findings suggest that project managers entrusted with implementing complex offshoring arrangements to achieve strategic short term cost reduction goals receive relatively little scanning information from senior management to guide them, must learn by doing, and are confronted with multiple external challenges centering on culture and communication with individuals performing work offshore that they were not initially prepared for.

Research limitations/implications

Suggestions for future research include expanding the study to complete comparative interviews with senior management scanning, comparisons between industries, comparisons between client and provider organizations and comparisons between organizational countries of origin.

Practical implications

Practical implications include a more accurate definition of decision‐making and implementation of offshore outsourcing by individuals and how this impacts organizations.

Originality/value

The study fulfills a void in organizational literature by examining scanning and interpretation as performed by mid‐level managers.

Details

Management Research News, vol. 30 no. 7
Type: Research Article
ISSN: 0140-9174

Keywords

Article
Publication date: 1 April 2000

Wendy Currie

Explores the supply‐side of the global IT outsourcing marketplace. Argues that companies should seek to understand the strategic positioning of IT suppliers. In recent years, the…

5242

Abstract

Explores the supply‐side of the global IT outsourcing marketplace. Argues that companies should seek to understand the strategic positioning of IT suppliers. In recent years, the large IT service providers have made inroads into new vertical markets from health care to e‐commerce. They have also expanded their service offerings to include business process outsourcing (BPO), customer relationship management (CRM) and e‐business. Explores some of these changes and presents a conceptual framework which captures some of the dynamic changes in the software and computing services industry. These involve mergers, acquisitions, joint ventures and partnering.

Details

International Journal of Physical Distribution & Logistics Management, vol. 30 no. 3/4
Type: Research Article
ISSN: 0960-0035

Keywords

Article
Publication date: 20 February 2009

Ari‐Pekka Hameri and Teemu Tunkelo

The purpose of this paper is to examine how companies should off‐shore complex product related tasks to low‐cost countries, without jeopardizing their competitive advantage and…

1346

Abstract

Purpose

The purpose of this paper is to examine how companies should off‐shore complex product related tasks to low‐cost countries, without jeopardizing their competitive advantage and intellectual property, while building solid and sustainable business in the sourcing country.

Design/methodology/approach

The underlying case concerns a multinational, globally operating engineering company delivering complex system products used as part of industrial and social infrastructure, and its entry to off‐shoring and how it has evolved from a green field operation to sizeable value center over the past six years.

Findings

The case provides support to the fact that companies understanding that building permanent, knowledge‐based and proprietary presence with full product management responsibility in lower labor cost countries will be more responsive in serving customers, cost efficient in maintaining old infrastructure products and in delivering new ones in the future. Further, complex product business companies focusing on long term and knowledge based legacy building in emerging economies will develop, not only more robust global business platform for themselves, but they will also contribute to the sustainable development of the global economy.

Originality/value

The paper presents unique descriptive data on the overall outsourcing strategy of a global engineering company and how one of its off‐shoring units has evolved over time since its inception.

Details

Strategic Outsourcing: An International Journal, vol. 2 no. 1
Type: Research Article
ISSN: 1753-8297

Keywords

1 – 10 of over 16000