Single-Sourcing vs. Multisourcing: An Empirical Analysis of Large Information Technology Outsourcing Arrangements

2023 | Information Systems Research | Citations: 0

Authors: Bapna, Ravi; Gupta, Alok; Ray, Gautam; Singh, Shweta

Abstract: As the information technology (IT) services landscape matures, clients are incre ... Expand

Abstract: As the information technology (IT) services landscape matures, clients are increasingly adopting multisourcing arrangements that involve multiple vendors. Although a large body of information systems (IS) literature addresses issues of whether to outsource (to a single vendor), what types of contracts to use, and how to achieve optimal relational governance, little is known about the antecedents and consequents of the single versus multisourcing decision. Moreover, while conceptual and analytical models of single-sourcing versus multisourcing have been developed, there is no empirical IS research using a large-scale data set with rigorous econometric analysis that examines the antecedents and consequents of multisourcing in the IT context. This paper fills this void, using the transaction cost economic lens and a data set of 49,057 large IT outsourcing arrangements that spans multiple industries and dates back 25 years. We find that there is a curvilinear relationship between number of IT services in an IT outsourcing arrangement and the likelihood of multisourcing. This relationship increases as the number of IT services increases to up to five services and then decreases. For managers who plan to multisource IT outsourcing arrangements, this research provides guidance to minimize exchange hazards through a better understanding of the relationship between sourcing choice, client IT outsourcing capabilities, the competitiveness of the vendor landscape, and the number of IT services in an IT outsourcing arrangement. We provide empirical evidence that the choice between single-sourcing and multisourcing is material to the performance of outsourcing contracts as an incorrect sourcing choice is likely to result in negative contract outcomes. History: Paul A. Pavlou, Senior Editor; Ning Su, Associate Editor. Collapse

Topics: outsourcing system integration IS management service desk data center

Methods: XGBoost robustness check machine learning k-nearest neighbor statistical hypothesis test

Theories: transaction cost economics game theory

Achieving digital transformation in the public sector through targeted insourcing

2023 | European Conference On Information Systems | Citations: 0

Authors: Thunes, Johanne; Kempton, Alexander

Abstract: Digital transformation in the public sector involves leveraging digital technol ... Expand

Abstract: Digital transformation in the public sector involves leveraging digital technology to perform a profound change in both the services offered by public sector organizations and the activities and structures that provide them. Practitioners and researchers alike have called for this kind of transformation to meet citizens' changing needs and expectations. However, there is a lack of knowledge on how to operationalize and achieve digital transformations in the sector, given its institutional and organizational complexity. In this paper, therefore, we present a case study of the establishment of a cross-domain digital transformation unit in a Scandinavian municipality. We conceptualize the approach to digital transformation carried out in this unit as targeted insourcing. We contribute to Information Systems literature on public sector digital transformation through our conceptualization and discuss its implications. Collapse

Topics: digital transformation insourcing organization structure outsourcing systems development

Methods: case study qualitative interview single case study theory development qualitative content analysis

Entrepreneurial Support Systems in the Digital Era: A Taxonomy of Digital Company Builders

2022 | Americas Conference on Information Systems | Citations: 0

Authors: Mittermeier, Ferdinand; Hund, Axel; Beimborn, Daniel

Abstract: New venture creation is at the core of entrepreneurship and regarded as the sou ... Expand

Abstract: New venture creation is at the core of entrepreneurship and regarded as the source of innovations and new employment. However, despite the potential that digitization bears for innovation and entrepreneurship, the failure rate of start-ups is still very high. In this context, digital company builders (DCBs) are becoming increasingly important as a new form of entrepreneurial support. Based on a multiple case study with ten DCBs we iteratively developed a taxonomy consisting of 13 dimensions, which describe how such organizations provide what kind of support to whom. Based on this taxonomy, we further grouped the cases into four main types of digital company building. These results may provide researchers a tool to systematically compare different entrepreneurial support systems, help both entrepreneurs and incumbents decide which support system is best suited to their individual needs, and furthermore be useful to the owners of DCBs themselves in their strategic positioning. Collapse

Topics: value creation digital service insourcing innovation management Spotify

Methods: qualitative interview multiple case study qualitative coding design methodology company material

Theories: general systems theory

DO YOU HAVE A ROOM FOR US IN YOUR IT? AN ECONOMIC ANALYSIS OF SHARED IT SERVICES AND IMPLICATIONS FOR IT INDUSTRIES

2021 | Management Information Systems Quarterly | Citations: 0

Authors: Chen, Min; Pang, Min-Seok; Kumar, Subodha

Abstract: We are witnessing an interesting and unique phenomenon in enterprise informatio ... Expand

Abstract: We are witnessing an interesting and unique phenomenon in enterprise information technology (IT) adoption and management in public-sector organizations: shared IT services. Instead of implementing separate IT services, governments come together to pool their IT resources into one single IT service. In this study, we develop a game-theoretic model to analyze the governments' decision to share IT services and understand how the introduction of shared services transforms the strategic interactions between the governments and the vendor. We study three common regimes used in the adoption of shared IT services: (1) a cost-sharing regime where costs are split proportionally, (2) a profit-center regime where one government charges a surplusmaximization price to the other, and (3) a coordination regime where governments coordinate their decisions to maximize aggregate surplus. Our analyses generate several intriguing findings. First, although charging a surplus-maximizing price seems to be a lucrative option, we find that a government does not always benefit by acting as a profit center. Second, the cost-sharing regime does not always incentivize the shared service adoption despite being often viewed as a fairer and more convenient arrangement. Third, we find that there can be significant under-utilization of shared services in the absence of proper coordination, in a sense that the governments may choose not to share their IT services even if doing so would increase their aggregate surplus. Finally, even though coordination promotes the adoption of shared IT services, it can sometimes be inefficient from the social welfare's perspective because the increase in governments' surplus can be outweighed by the decrease in the vendor's profit. We also present a range of extensions to our model to show that our main takeaways carry over when some model assumptions are relaxed. 1 "If we don't move to shared services, we have 190 agencies that are all trying to develop their own defenses against advanced protection and collection efforts….I don't think that is a wise approach. If we don't move to secure services and shared services, we will be behind the eight-ball for a very long time." Collapse

Topics: outsourcing economic surplus IS economics economies of scale insourcing

Methods: optimization model mathematical model economic model literature study

Theories: information systems theory game theory

Relational Embeddedness, Breadth of Added Value Opportunities, and Business Growth

2021 | Organization Science | Citations: 0

Authors: Mawdsley, John K.; Somaya, Deepak

Abstract: The current paper complements and extends traditional Penrosean theories of firm ... Expand

Abstract: The current paper complements and extends traditional Penrosean theories of firm growth by examining how a (supplier) firm’s relational embeddedness with its portfolio of existing buyers affects its business growth. Our theorizing rests on the foundation that a firm’s business growth stems from its breadth (or volume) of opportunities for creating added value with buyers, which more fully realizes the Penrosean vision that firm growth can be explained by a dynamic interaction between productive resources and demand-side market opportunities. Although relational embeddedness may give a supplier dyadic advantages with focal buyers, which supports business growth, we theorize that it can also lead to narrower added value business opportunities with the supplier’s entire portfolio of buyers. Critically, we hypothesize that the effect of relational embeddedness on business growth is moderated by a set of relational and demand-side attributes. These hypotheses are tested on a panel data set of patent law firms (suppliers) and their relationships with corporate clients (buyers). We find that greater relational embeddedness is associated with slower supplier business growth, and consistent with our hypotheses, this negative effect is alleviated when these firms have greater cross-servicing ability and receive more relational commitment from buyers but exacerbated when suppliers hold more buyer-specific knowledge and when buyers undertake more (internal) concurrent sourcing. In turn, our research demonstrates how the attributes of a supplier’s relationships with its portfolio of buyers can impact access to new business opportunities and thus opens up new directions for research on firm growth, demand-side strategy and buyer-supplier relationships. Collapse

Topics: insourcing interorganizational relationship outsourcing business-to-consumer value creation

Methods: longitudinal research theory development robustness check descriptive statistic statistical hypothesis test

Theories: transaction cost economics behavioral theory cooperative game theory

Implementing Global Business Services in a Plural Sourcing Context: Conceptualizing Modes of Service Governance

2021 | HICSS | Citations: 0

Authors: Plugge, Albert; Nikou, Shahrokh

Abstract: To increase organizational responsiveness , f i rms nowadays seek various approa ... Expand

Abstract: To increase organizational responsiveness , f i rms nowadays seek various approaches in delivering global shared business services. Today, global operating firms apply a plural sourcing model that consists of both in-house and outsourced business services. As such, service governance is needed to manage interdependencies between vendors, b o t h i n house and outsourced. However, as far as we know n o study has yet addressed how global business services are governed within thecontext of plural sourcing. We conducted 68 semi-structured interviews with executive management of international firms and d i strib uted a survey questionnaire to explore service g overna nce modes. As a result, we identify five servicegovernance modes: regional, global, centralized, d e-cent ra li zed and multifunctional. Our paper contributes to research on global business services and plural sourcing by exploring various service governance modes. Theoretical and practical implications are discussed . Collapse

Topics: outsourcing business process management procurement management organization structure IS sourcing

Methods: qualitative interview survey qualitative coding personal interview grounded theory

Orchestrating automation and sharing in DevOps teams: a revelatory case of job satisfaction factors, risk and work conditions

2020 | European Journal of Information Systems | Citations: 0

Authors: Hemon-Hildgen, Aymeric; Rowe, Frantz; Monnier-Senicourt, Laetitia

Abstract: Agile can be seen as an accelerator to develop software, yet it suffers from bot ... Expand

Abstract: Agile can be seen as an accelerator to develop software, yet it suffers from bottlenecks between development and operations. DevOps can overcome bottlenecks between agile development teams and operations, notably by providing continuous integration, delivery and deployment, thus improving end-to-end processes between development and operations functions. However, literature on DevOps effects is scant. Using job design characteristics theory and Herzberg’s job satisfaction theory, this paper investigates perceptions of job (dis)satisfaction, risks and work conditions among 59 employees working within 12 agile and DevOps teams in the same firm. Findings show that DevOps provides greater job satisfaction than agile alone. However, this case study also unveiled an effect of risk amplification with DevOps, and the greater need to orchestrate automation and sharing, contingent on work conditions. We theorise that orchestration of interactions between automation and sharing and related risks must be managed to improve job satisfaction when agile teams transition to DevOps. Collapse

Topics: devops job satisfaction systems development agile software development outsourcing

Methods: qualitative interview qualitative content analysis theory development theoretical contribution case study

Theories: two-factor theory job characteristics theory theory of job satisfaction

The Usefulness of the Recommendations Regarding the Information System Development Method Selection during the Era of Digitalization

2019 | HICSS | Citations: 0

Authors: Dahlberg, Tomi; Lagstedt, Altti

Abstract: The business criticality of information systems (IS) and their development (ISD) ... Expand

Abstract: The business criticality of information systems (IS) and their development (ISD) appear to have increased recently. Backsourcing, cosourcing and multisourcing of ISD are some of the consequences. They, in turn, extend the need for understanding how to select information systems development methods (ISDM). In this research, we first condensed the knowledge base of ISDM selection research into nine recommendations. We then interviewed 28 ISDM experts and asked them to evaluate how useful the extant ISDM selection recommendations of prior research are to IS user organizations. We discovered that most recommendations were perceived outdated and only limitedly useful. We finally contemplated that paying more attention to how ISDMs are used in business development contexts is a means to increase the usefulness of ISDM selection recommendations. Collapse

Topics: knowledge base perceived usefulness armed conflict outsourcing insourcing

Methods: qualitative interview structured literature research survey design descriptive statistic

Theories: organizational theory

Against Theory: With Apologies to Feyerabend

2019 | Journal of the Association for Information Systems | Citations: 52

Authors: Hirschheim, Rudy

Abstract: This essay explores the fixation the field of information systems has with "the ... Expand

Abstract: This essay explores the fixation the field of information systems has with "theory" and my frustration with this focus, examining where this theory focus came from, why it has been so widely adopted, and how it has led to dysfunction. It also offers some recommended action items that the field can take to redirect its efforts in order to become more relevant, resilient, and resourceful. These actions include, broadening the aperture of what legitimate IS research should include, imploring journal editors to change the way "applied" research is handled, bringing back books as an accepted and valued publication outlet, and moving the field in the direction of engagement. Collapse

Topics: outsourcing systems development insourcing IT workforce

Methods: design science data modeling literature study operations research theoretical contribution

How Does Strategic Alignment Affect Firm Performance? The Roles of Information Technology Investment and Environmental Uncertainty

2019 | Management Information Systems Quarterly | Citations: 72

Authors: Sabherwal, Rajiv; Sabherwal, Sanjiv; Havakhor, Taha; Steelman, Zach

Abstract: The alignment between a firm’s business and information technology (IT) strategi ... Expand

Abstract: The alignment between a firm’s business and information technology (IT) strategies continues to be important for research and practice. Prior research investigating the performance consequences of strategic IT alignment (SITA) has produced inconsistent results. This paper distinguishes between two roles of SITA: (1) as a state of congruence between business and IT, which is the primary focus of empirical studies, and (2) as reflecting a capability that may enable or inhibit the leveraging of IT investments, as has been discussed theoretically but not examined empirically. Based on the resource-based view (RBV), IT investment (ITI) is explicitly included as the resource that SITA as a capability can inherently help leverage. Also based on RBV, we argue that environmental uncertainty, which is examined in terms of dynamism, complexity, and munificence, moderates the effect of SITA on the relationship between ITI and firm performance. The research model is tested through panel-data analyses of data from 1999–2008, including 758 firm-year observations from 242 firms. This study is the first to find that SITA as a state directly improves firm performance even when considering ITI and its interaction with SITA. Moreover, the effect of the interaction between SITA and ITI on firm performance increases with an increase in environmental dynamism or complexity and with a decrease in environmental munificence. We also find that the effect of the interaction between SITA and ITI can be negative under some environments. Specifically, the results suggest that (1) in dynamic, complex, and hostile environments, SITA does reflect a capability that enhances the positive effect of ITI on firm performance, but (2) in stable, simple, and munificent environments, SITA reflects a rigidity that reduces the positive effect of ITI on firm performance. The results are robust under a variety of statistical specifications and estimations. Collapse

Topics: organizational productivity strategic management environmental uncertainty IT investment information systems strategy

Methods: longitudinal research robustness check survey descriptive statistic data imputation

Theories: resource based view of the firm