Information systems outsourcing: a survey and analysis of the literature
In the last fifteen years, academic research on information systems (IS)
outsourcing has evolved rapidly. Indeed the field of outsourcing research
has grown so fast that there has been scant opportunity for the research
community to take a collective breath, and complete a global assessment of
research activities to date. This paper seeks to address this need by
exploring and synthesizing the academic literature on IS outsourcing. It
offers a roadmap of the IS outsourcing literature, highlighting what has
been done so far, how the work fits together under a common umbrella, and
what the future directions might be.
In order to adequately address the immense diversity of research on IS
outsourcing and outsourcing in general, we develop a conceptual framework
that helps us to categorize the literature. In particular, we look at the
research objectives, methods used and theoretical foundations of the papers.
In identifying the major research objectives, we view outsourcing as an
organizational decision process and adapt Simon's stage model of decision
making. This allows us to identify five major sourcing issues, from which at
least one is covered by each academic article. These are the questions of <i>why</i>
to outsource, <i>what</i> to outsource, <i>which</i> decision process to
take, <i>how</i> to implement the sourcing decision, and what is the outcome
of the sourcing decision. In analyzing the literature, we identify and
structure the main explanatory factors and theoretical relationships within
each of these sourcing stages. Based on our discussion of the research
objectives, theoretical foundations and research approaches taken in the
literature, we show how the various research streams hang together and we
come up with a number of implications for research. Moreover, we identify a
number of emerging sourcing issues. We believe that research on these "new"
phenomena such as offshore outsourcing, application service providing and
business process outsourcing would benefit from 'standing on the shoulders'
of what has already been accomplished in the field of IS outsourcing.
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ERP Domain .Com
A region in a solid within which elementary atomic or molecular magnetic or
electric moments are uniformly aligned.
Ferromagnetic domains are regions of parallel-aligned magnetic moments. Each
domain may be thought of as a tiny magnet pointing in a certain direction. The
relatively thin boundary region between two domains is called a domain wall.
Within a wall the magnetic moments rotate from the direction of one of the
domains to the direction in the adjacent domain.
A ferromagnet generally consists of a large number of domains. For example, a
sample of pure iron at room temperature contains many domains whose directions
are distributed randomly, making the sample appear to be unmagnetized as a
whole. Iron is called magnetically soft since the domain walls move easily if a
magnetic field is applied. In a magnetically hard or permanent magnet material a
net macroscopic magnetization is introduced by exposure to a large external
magnetic field, but thereafter domain walls are difficult to either form or
move, and the material retains its overall magnetization.
Antiferromagnetic domains are regions of antiparallel-aligned magnetic moments.
They are associated with the presence of grain boundaries, twinning, and other
crystal inhomogeneities.
Ferroelectric domains are electrical analogs of ferromagnetic domains. See also
Antiferromagnetism; Ferroelectrics; Ferromagnetism; Magnetic materials;
Magnetization; Twinning (crystallography
ERP Project Management experts
Outsourcing occurs when a company purchases products or services from an outside
supplier, rather than performing the same work within its own facilities, in
order to cut costs. The decision to outsource is a major strategic one for most
companies, since it involves weighing the potential cost savings against the
consequences of a loss in control over the product or service. Some common
examples of outsourcing include manufacturing of components, computer
programming services, tax compliance and other accounting functions, training
administration, customer service, transportation of products, benefits and
compensation planning, payroll, and other human resource functions. A relatively
new trend in outsourcing is employee leasing, in which specialized vendors
recruit, hire, train, and pay their clients' employees, as well as arrange
health care coverage and other benefits.
The growth in outsourcing in recent years is partly the result of a general
shift in business philosophy. Prior to the mid-1980s, many companies sought to
acquire other companies and diversify their business interests in order to
reduce risk. As more companies discovered that there were limited advantages to
running a large group of unrelated businesses, however, many began to divest
subsidiaries and refocus their efforts on one or a few closely related areas of
business. Companies tried to identify or develop a "core competence," a unique
combination of experience and expertise that would provide a source of
competitive advantage in a given industry. All aspects of the company's
operations were aligned around the core competence, and any activities or
functions that were not considered necessary to preserve it were then
outsourced. Today, outsourcing is embraced by companies of all sizes and
industry orientations. As analysts Tom Osmond commented in Employee Benefit
News, "many companies have decided that transactional and administrative
functions are neither core competencies nor value-added activities. In fact,
some companies are putting themselves at risk as a result of using outdated
technology and not complying with government regulations. Vendors, by focusing
on administration as part of their business model, provide better service
enforced by contracts and service-level agreements."
Successful outsourcing requires a strong understanding of the organization's
capabilities and future direction. As William R. King explained in Information
Systems Management, "[d]ecisions regarding outsourcing significant functions are
among the most strategic that can be made by an organization, because they
address the basic organizational choice of the functions for which internal
expertise is developed and nurtured and those for which such expertise is
purchased. These are basic decisions regarding organizational design."
Outsourcing based only upon a comparison of costs can lead companies to miss
opportunities to gain knowledge that might lead to the development of new
products or technologies.
Outsourcing can be undertaken to varying degrees, ranging from total outsourcing
to selective outsourcing. Total outsourcing may involve dismantling entire
departments or divisions and transferring the employees, facilities, equipment,
and complete responsibility for a product or function to an outside vendor. In
contrast, selective outsourcing may target a single, time-consuming task within
a department, such as preparing the payroll or manufacturing a minor component,
that can be handled more efficiently by an outside specialist.
Vendors providing outsourcing services are generally grouped into two models:
Business Process Outsourcing (BPO) and Application Service Provider (ASP). In
the BPO model, major resources and assets are transferred from the company to
the vendor. Under the ASP model, on the other hand, vendors concentrate on
providing selected services for multiple clients. But as Osmond told Employee
Benefit News, many variations exist within these two models. "Each vendor has a
particular focus and/or point of entry to the market, particularly in the ASP
space," Osmond stated. "There is also a wide range of pricing models and option.
The good news is that there is a seemingly endless combination of service,
pricing, and delivery, providing a solution for most situations. The bad news is
that it can be difficult to compare vendors on an apples-to-apples basis."
Advantages of Outsourcing
Internet- project management software - accounting ERP system
Title: Internet based supply chain management: A classification of approaches to
manufacturing planning and control
Author(s): Dennis Kehoe, Nick Boughton
Journal: International Journal of Operations & Production Management
ISSN: 0144-3577
Year: Apr 2001 Volume: 21 Issue: 4 Page: 516 - 525
DOI:
Publisher: MCB UP Ltd
Abstract: Today the Internet provides a real opportunity for demand data and
supply capacity data to be visible to all companies within a manufacturing
supply chain. Consequently there is a need for manufacturing organisations to
explore alternative mechanisms for the management of their operations network,
in particular the role of manufacturing planning and control systems. This paper
describes current research which examines the classification of manufacturing
supply chains and positions Internet-based applications in order to identify the
operations management challenges for the next generation of manufacturing
planning and control systems.
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