Concept of Outsourcing Information Technology - Literature review Example

Outsourcing Information Technology Name Institution Course Date Table of Contents Table of Contents 2 1.0 Introduction 3 2.0 The concept of Outsourcing 4 3.0 Reasons Organizations Outsource IT 7 3.1 Financial Reasons 7 3.2 Business Reasons 8 3.3 Technical Reasons 10 3.4 Environmental Reasons 12 4.0 Benefits of Outsourcing Information Technology 12 4.1 Access to Advanced technology 13 4.2 Profitability 13 4.3 Cost Effectiveness 13 4.4 Maximization of Efficiency 14 4.5 Flexibility 14 5.0 Critical Issues in Outsourcing 15 5.1 Cost Increase 15 5.2 People Issues 16 5.3 Loss of Control 16 6.0 Recommendations 17 6.1 Alignment with Business Strategy 17 6.2 Communication 17 6.3 Culture 18 6.4 Change Management 18 7.0 Conclusion 19 8.0 References 21 1.0 Introduction The aspect of outsourcing business activities outside an organization has become prevalent in today’s business environment. According to a research study conducted by Kremic, Tukel and Rom (2006), in 2001, companies in the United States spent more than $300 billion on outsourcing of human resource and Information Technology activities. This trend is also widespread in other countries such as Australia, United Kingdom and Canada among other nations. There are many issues that are associated with outsourcing of Information Technology. Although outsourcing brings many benefits to an organization, it leads to many challenges as well. According to Gnuschke et al. (2004), outsourcing is described as the process of using a third-party provider to perform business functions that are non-core to companies. In addition to Information Technology, businesses outsource other activities such as warehousing, distribution, manufacturing, human resources, stock control, etc. As companies become more globalized, they acknowledge that in-house operations sometimes may be inefficient to emerging markets due to the costs incurred and the different organization systems required (Lau and Zhang, 2006). And as such, the need to outsource some operations to a third-party emerges. Companies decide to outsource for various reasons such as financial reasons, business reasons, technical reasons and political reasons. However, in order for them to yield benefits, companies should endeavour to manage outsourcing relationships. Outsourcing could backfire if productivity, staff turnover and other business issues are not managed (Power, Bonifazi and Desouza, 2004). The purpose of this paper is to critically discuss the issues associated with outsourcing of Information Technology. The paper will discuss why companies choose to outsource their Information Technology activities. It will also draw on relevant literature and discuss the issues in managing outsourcing relationships. By offering relevant real-world example, the report will discuss the benefits and challenges that come with outsourcing decision. Finally, it will offer numerous recommendations that organizations can utilize to ensure successful outsourcing. 2.0 The concept of Outsourcing The concept out outsources came into existence in the 1990s with the changes brought about by globalization and technological innovation. In the early days, outsourcing was seen as a tool that could cut operational costs (Lee et al., 2003). This concept gained rapid development and engulfed in almost all organizations across the globe. Although outsourcing gained popularity in the 1990s, businesses were not self-sufficient in the previous years. Companies used to transfer services that were not useful to other service providers. Due to pressure of high competition, companies began to outsource important functions that were not linked to core businesses with an aim of cost-saving (Lee et al., 2003). Mangers formed partnership with outsourcing companies which offered accounting, ecommerce, security and human resource services at a fee. Although outsourcing of business activities is a new phenomenon, the economic crisis that came into existence due to global recession assisted in staging it as more and more businesses are going for it (Lacity, Khan and Willcocks, 2009). Outsourcing is a concept that has attracted the attention of scholars and professional alike (Lacity, Khan and Willcocks, 2009). Due to the changing business environment, many organizations are considering outsourcing non-core business activities in order to focus on what really matter toothier customers. In the United Kingdom, the United States and Australia, the concept has become very prevalent especially in the retail industry (Lacity, Khan and Willcocks, 2009). Due to technological advancement, Information technology has become an important part of production and distribution and cannot be ignored for companies that chase success. According to Gottschalk and Solli (2005), outsourcing can be considered as a new business concept since in the past companies used to do all its business activities without the help of outside party. Today, organizations opt to hire third-party providers who can assist their operations and simplify their mandate. The concept of outsourcing has come as a response to changing market dynamics and organization conditions. In contrast to vertical integration, outsourcing has enabled companies to make gains and to focus more on in-house activities (Goo, Huang and Hart, 2008). Outsourcing is reinforced by the basis of whether a company should purchase or produce a service (Baldwing, Irani and Love, 2001). Outsourcing originates from two fundamental concepts; transferring ownership of a service to an outside party and allowing full focus on in-house core competencies that translate into high quality outputs. The concept of transferring ownerships to a third-party has dramatic impact on a business’s productivity, growth and transaction cost. Gonzalez, Gasco and Llopis (2005a) conducted a study involving 192 organizations in the United States to determine the influence of outsourcing on organizations. They found out that the prevalent of outsourcing in the country was associated with the need to relieve jobs, save time and reduce cost of operations. From this study, it is evident that outsourcing activity has the potential to turn a fixed cost organization into one that has flexible costs (Gonzalez, Gasco and Llopis, 2005a). Outsourcing is therefore an activity that works best in organizations that have activities that vary in turnover annually or those that face extreme pressure to minimize overhead costs. The success of business originates from core business competencies that are sources of competitive advantage, growth and development and customer satisfaction. Kehal and Singh (2006) argue that core business competencies are activities and functions that have the ability to evolve gradually through information distribution and shared knowledge. And as such, these functions cannot be rapidly boosted with monetary investments but they can only remain as the main focus of any business dominating organization decisions (Baldwing, Irani and Love, 2001). It is difficult to determine what core competency of a business is. Many companies have failed due to lack of knowledge in regards to their core competencies. The Continental Bank of the United States faced challenges in the 1980s due to lack of knowledge of their core competencies. In the early years, the bank was one of the first businesses to outsource its Information Technology functions to India and China (Baldwing, Irani and Love, 2001). Before this decision was made, the bank faced financial breakdown that threatened its survival. This decision to outsource came only after the bank comprehended that Information Technology was not its core competency but customer service was the one. For any function to be considered a core competency, it should result in the increase in shareholder value. It should also be strategic in nature, a translation into customer satisfactions and should span more than one market. According to Claver et al. (2002), outsourcing is a fundamental repositioning of a company around the core competencies and long-standing relationships. It can also be considered an old-fashioned relationship between a supplier and a buyer that takes into consideration the services to be transferred from one party to another. The outsourcing of Information Technology began on 1990 when companies realized that although technology was part of the core business, it was not necessarily about owning technology but of accessing the information required in improving products and operations (Lee et al., 2003). Businesses today focus lesson owning technologies and more on creating strategic partnerships that can enhance operational success. Therefore, companies today prefer to outsource Information Technology as long as they receive effective results that could boost sustainable competitive advantage (Pisano, 2009). 3.0 Reasons Organizations Outsource IT Companies decide to outsource Information Technology for a number of reasons. There is a consistency of reasoning between reasons presented by different scholars. The reasons for outsourcing Information Technology can be presented into four categories. These categories include financial, business, environmental as well as technical reasons. 3.1 Financial Reasons The main financial reasons that drive companies to outsource IT include reducing operating costs, restructuring Information Technology Budget and improving cost control. According to Claver et al. (2002), it is evident in many companies that third-party providers can offer the same level of services related to IT at lower cost when compared to the internal IT department. This view has been supported by different authors who agree that organizations that decided to conduct their own IT operations incur high expenses related to research and development and placement. In addition, the cost reductions associated with outsourcing of Information Technology result in effective and latest technology (Claver et al., 2002). This rationale is derived from the notion that the third-party providers often have better access to high quality and low-cost labour pool, enjoy huge economies of scale, and have tauter control over peripheral benefits. Although, outsourcing is linked to reduced operating cost, saving through such as strategy is controversial since the third-party provider often keep under wraps the identical infrastructures that are involved in the service provision and the profits generated (Kirk, 2010). However, numerous companies have provided evidence to support the notion that IT outsourcing translate into reduction in IT costs. Another financial reason for IT outsourcing is improving cost control. According to Cullen, Seddon and Willcocks (2005), most third-party providers often operate leaner overhead structures compared to their clients. When this aspect is combined with the baseline approach to fees payable, companies can be able to improve their long-term cost control. Besides, organizations can improve their cost control abilities by allowing an external vendor to leverage them and provide low-cost labor pool especially for non-base services (Cullen, Seddon and Willcocks, 2005). Furthermore, outsourcing can ensure organizations restructure their IT budgets. According to evidence from numerous research studies, IT budgets are more predictable when placed under outsourcing arrangement. This originates from the fact that outsourced IT services often convert fixed cost overheads to fixed costs and variable cost components. Also, budgets that are associated with IT outsourcing can be restricted into technical capital intensive outlays Cullen, Seddon and Willcocks (2005). Outsourcing of Information technology can also result in cash infusion. In many instances, many organizations outsource their IT activities in order to liquidate their assets (Gonzale, Gasco and Llopis, 2005a). Liquidation of assets is possible through forming an arrangement with the third-party provider who obtains a company’s IT infrastructure and employs it as part of the baseline fee. The transformation of IT infrastructure into capital is often beneficial to organizations that require additional working capital urgently (Gonzale, Gasco and Llopis, 2005a). Also, IT outsourcing is also associated with the reduction of the need to invest money in non-core competencies which creates capital for core business functions. 3.2 Business Reasons In addition to outsourcing for financial reasons, companies outsource IT functions for business reasons including the need to return to core competencies, share risks of operations, and technical reasons. Baldwing, Irani and Love (2001) argue that the main business reason why companies decide to outsource IT is to simplify their business agenda in order to ensure that they put more focus on the core business functions that are valuable in bringing value and long-term success. Outsourcing has enabled organizations to deploy resources to its core competencies and activities and retain the fundamental aspects of their operations (Gonzale, Gasco and Llopis, 2005a). There has been a shift from the notion that Information Technology is the main responsibility of a business to the view that it can be passed to an external vendor. An organization is able to concentrate on the major in-house responsibility by outsourcing peripheral functions (Gonzale, Gasco and Llopis, 2005a). In addition, another business reason that necessitates the outsourcing of IT services is the ability to share and manage risks (Deepen, 2007). Research suggests that outsources spread risks especially those that are linked to non-core business functions. In any outsourcing relationship, the external vendor is in a better position to weigh the alternatives that ensure effective spread of risks across different clients (Gonzale, Gasco and Llopis, 2005a). When these non-core business activities are left in the hands of organizations, they often attract risks that can affect the profit margins. Therefore, to avoid such situations, businesses choose to forego such functions by reassigning them to an external provider (Gonzale, Gasco and Llopis, 2005a). Another business reason that force companies to outsource IT functions is the need to gain competitive advantage. Outsourcing of IT functions is considered a managerial decision that affects many operational factors. According to Jiang and Qureshi (2006), there are numerous factors that assist managers decide whether or not to outsource IT activities; dependency risks, proficiency, trust and flexibility among others. Such influences are the base for outsourcing deals in many companies today (Gonzale, Gasco and Llopis, 2005a). Focussing on these factors often yield to a success. For instance, in 1999, BP Company decided to outsource their IT functions by putting into consideration these factors and the result was evident from its long-term success. Achieving competitive advantage was an important reason that drove the company to outsource some non-core activities. Jiang and Qureshi (2006) conducted a study to show the link between outsourcing and sustainable competitive advantage. The research showed that with the supply of highly qualified labour pool from a different environment, organization can achieve competitive advantage. More studies have offered evidences that IT is a collective structure made up of activities that has an immediate link with organizational performance. 3.3 Technical Reasons Many companies outsource IT functions due to technical reasons such as the need to improve technical services, access high qualified labour and access new technologies and innovations (Lacity, Khan and Willcocks, 2009). The capacity to enhance technical quality of service delivery is a motivating factor that has made many organizations to rely on external vendors. As a result of rapid advancement in technology, many companies have IT departments that lack up-to-date technical proficiency and equipment that guarantee high quality delivery. Therefore, outsourcing can act as tool for creating and re-tooling an IT infrastructure with minimal monetary investment (Lacity, Khan and Willcocks, 2009). Also, outsourcing can be used as a toll for minimizing time required to market new Information Technology services. In any business setting, the delivery of new corporate solutions requires appropriate and adequate resource allocation. In such a case, outsourcing of IT can assist by offering the new technology solution and releasing existing resources that can be useful in improving technical services (Lacity, Khan and Willcocks, 2009). Also, outsourcing of IT services translates into access to technical talent. In today’s business environment, it is difficult for companies to recruit and retain IT employees who can develop and upgrade current technological systems (Lin, Pervan and McDermid, 2007). In order to solve this challenge, organizations opt to outsource IT functions which result in access to human resources that lack internally. Outsourcing can also offer greater access to highly qualified personnel that are necessary in driving organizational success. It can also ensure companies acquire expertise and capabilities that were absent internally (Lacity, Khan and Willcocks, 2009). This is paramount especially when an organization is expanding to new countries or market segment. Equally important is the ability of outsourcing to offer access to new technologies. According to Claver et al. (2002), outsourcing is a great opportunity for companies to gain access to world class capabilities from third-party providers. In order to be competitive in today’s challenging bossiness enrolment, organizations opt for the use of leading-edge IT practices that can effectively be delivered through the use of outsourcing services. These practices compliment the in-house skills and capabilities in driving competitive advantage. Gonzalez, Gasco and Llopis (2005a) argues that the development of new technologies require high capital and human resource investment which can affect the budgetary allocation of businesses. To avoid this, many organizations have chosen to outsource IT services that can meet customer needs. Also, companies decide to outsource IT services in order to focus internal IT staff on their core functions. The decision to outsource selective IT functions ensures that a business focuses on developing technological solutions that meet immediate its needs (Lacity, Khan and Willcocks, 2009). Outsourcing of IT functions creates a win-win situation since a company can yield immediate value internally while the external party develop new technologies. 3.4 Environmental Reasons Factors such as economic trends and third-party’s pressure are some of the environmental reasons that drive outsourcing of IT functions. Industry and economic trends are not specific to an organization by influence the decision to outsource (Lacity, Khan and Willcocks, 2009). For instance, the contractual attractiveness that results from good economic condition may push companies to outsource their IT services. The economic condition of a country influences the availability of qualified third-party providers who can provide outsourced IT services to businesses. Also, intense vendor pressure may drive company to the decision of outsourcing (Claver et al., 2002). Outsourcing of IT services has attracted numerous third-party providers who endeavour to promote a wide range of IT services to companies in an environment that lacks IT equipment that boost competitive advantage. For instance, third-party providers in countries such as China and India have energetic teams that have done well in promoting their outsourcing services to companies in the developing countries (Lau and Zhang, 2006). This has put pressure of companies to outsource excess IT functions especially due to low price offering. 4.0 Benefits of Outsourcing Information Technology The importance of outsourcing Information Technology is determined the assorted characteristics of an organization. Prior conducted researches have indicated that various small as well as medium sized enterprises (SME’s) gain greatly from outsourcing Information Technology compared to other large-scale enterprises (Lau and Zhang, 2006). Furthermore, outsourcing Information Technology also plays a huge role in both increasing assets as well as minimizing costs in the next financial period. In addition, there have been records of substantial savings in both operational as well as capital costs in establishments that are take part in outsourcing Information Technology in conducting their in-house operations. Smith, Smith and Stringer (2000) concluded in their research that there existed a correlation between outsourcing as high performance of organizations. Therefore, there are various benefits of outsourcing Information Technology to organizations which include the following: 4.1 Access to Advanced technology Organizations that have outsourced Information Technology have proven to have leverage of using technology from their supplies since they are substantially more sophisticated and hence make use of the latest technology in the industry (Lau and Zhang, 2006). Furthermore, organizations get to identify their most effective operations after constant use of this technology. Also, as the effects are not as obvious as they seem, Kirk (2012) claim that outsourcing Information Technology has assisted in destabilizing the power of trade. 4.2 Profitability Most of times, when business is flourishing organizations think of expanding their business while concurrently taking control of the production costs (Gnuschke et al., 2004). Therefore, when organizations outsource Information Technology in the most effective way possible, they can yield the best outcomes in a rise in profit. Secondly, in terms of capabilities, outsourcing of Information Technology has allowed organizations to take advantage of employing experts while at the same time “not owning” the individual reducing the cost to a minimum (Gnuschke et al., 2004). 4.3 Cost Effectiveness Jiang and Qureshi (2006) categorized an increase in credibility as well as organizational status as a possible advantage of relating with service providers. In addition, outsourcing of Information Technology has enhanced greater credibility of an organization as well as their workforce flexibility. Researches have been conducted and it has been found that outsourcing of Information technology has also alleviated short-term cost savings as well as savings on overheads (Gnuschke et al., 2004). Additionally, Information Technology is mostly introduced in businesses with a clear goal of saving costs and maximizing the amount of profits. 4.4 Maximization of Efficiency Furthermore, Lau and Zhang (2006) offer a clear indication that in order for an organization to heighten their efficiency of their core values, they ought to specialize in outsourcing their Information technology. This would help the organization reduce significantly their costs as well as enable them take advantage of new channels of distribution in order to have a global reach. This in turn increases their efficiency which also influences the sales growth and profitability of an organization (Lau and Zhang, 2006). 4.5 Flexibility Flexibility can be evaluated in terms of an improvement in demand as well as a change in demand (Gnuschke et al., 2004). Therefore, in order for an organization to possess the capability of effectively meet and satisfy the demands of their customers, they ought to invest in outsourcing Information Technology. This offers an opportunity for the organization to come in terms with aspects such as change in volume of production and seasonal changes to mention a few. Therefore, outsourcing of Information Technology is advantageous since it enables an organization navigate through such constraints through offering opportunities for meeting changes in production volume and seasonal changes with regards to the market conditions based on the demands of the customers (Gnuschke et al., 2004). 5.0 Critical Issues in Outsourcing 5.1 Cost Increase According to Gonzalez, Gasco and Llopis (2005b), although outsourcing has benefited many organizations, it may not achieve cost-saving benefits. In some cases, outsourcing has been associated with increasing costs of operations since it may be inexpensive to administer IT functions in-house that to pass them to a third-party provider. This notion has been supported by many scholars like Bahli and Rivard (2005) who highlighted that the reason for high costs associated with outsourcing is because Information Technology is still in its infancy. In many instances, IT products are always tailored to organization’s requirements which often increase develop costs. Bahli and Rivard (2005) justified this notion by offering real world examples. For instance, BP created an international outsourcing agreement with Exult. This contract led to the increase in cost by one third in 2001. The company admitted that the increase in the cost was caused by the outsourcing contract which necessitated the provision of Human Resource and Information technology services. Other examples that illustrate the effects of outsourcing on cost include that of Federal Energy Regulatory Commission (FERC) (Gongzalez, Gasco and Llopis, 2005b). The federation outsourced its Human Resource functions to VAS system. The initial payment agreement was $1.2million but the company ended up paying $2.6 million thereby incurring loss. Also, Transportation Security Administration (TSA) suffered the same fate when it outsourced Human Resource and information technology functions to NCS Pearson. The company suffered a loss of $597 million from the agreement (Gongzalez, Gasco and Llopis, 2005b). 5.2 People Issues Another study conducted by Kremic, Tukel and Rom (2006) provided evidence that show that although outsourcing is beneficial to organization, it may lead to people issues. However, this is the most arguable facet of outsourcing. Power, Bonifazi and Desouza (2004) conducted a research study to illustrate the association between outsourcing and lack of trust among employees. The study established that one of the greatest challenges facing outsourcing of Information Technology is cultural and political factors. In most cases, outsourcing activities often take part between companies situated in different countries (Gongzalez, Gasco and Llopis, 2005b). For instance, evidences suggest that most companies in the United Kingdom, Australia and the United States often outsource their non-core business functions to China and India. When IT functions are outsourced outside a given country, they pose a huge threat to employee trust. In most cases, third-party providers have business environments that are not commiserating with the environment of their customers which result in contention of issues. Many companies have suffered from cultural and political issues when outsourcing services (Kremic, Tukel and Rom, 2006). For instance, the Bank of America suffered dramatically when it decided to outsource Human Resource and IT functions to Exult Company. Workers were worried about the relationship dynamics after the arrangement. The outsourcing arrangement led to challenges related to trust among employees of the two entities which threatened to destroy Bank of America. 5.3 Loss of Control Despite the benefits that come with outsourcing, many companies still question the concept due to the thought of losing control over business processes. According to Bahli and Rivard (2005), outsourcing often leads to the loss of control to the contracting company. Gonzalez, Gasco and Llopis (2005b) conducted a research study involving different executives from companies in the states to determine the effects of outsourcing. They found out that about 48% of the executives interviewed expressed the fear of loss of control as the greatest impediment affecting outsourcing decisions. There is often a possibility that outsourcing brings an adverse mismatch of hierarchy in an organization which yields a challenge where an organization and a third-party vendor do not synchronise their working. 6.0 Recommendations Successful outsourcing is possible through effective management of outsourcing relationships. In order to facilitate successful transfer of functions to third-party providers, there are numerous things an organization should consider. 6.1 Alignment with Business Strategy According to Jiang and Qureshi (2006), it is important for outsourcing decisions to be made in the context of business strategies. When outsourcing is aligned to business strategy, companies can establish suitable controls into the contract. For instance, if an organization decides to grow through acquisition strategy, it is recommended that the pricing tables take into consideration the planned growth. In the same line, when the third-party vendor is expected to perform integration projects, an organization should select along with terms and conditions based on pricing mechanism, lead times, etc. When companies align their outsourcing decisions to business strategy, the management become more committed to the activities and support the entire project (Jiang and Qureshi, 2006). Commitment of management and employees translate into successful outsourcing transactions. 6.2 Communication As mentioned earlier, one of the major challenges facing outsourcing transactions is cultural issues that create distrust among the two contracting companies. According to Smith, Smith and Stringer (2000), effective communication is very important in maintain a good working relationship during outsourcing arrangement. Managers who focus on creating clear lines of communication are able to build trust amongst the parties involved, leading to high productivity and motivation. Poor communication often results in distrust between employees who may question their confidence in delivering required services. Therefore, companies should work towards improving its communication channel with the outsourcing third-party providers (Kehal and Singh, 2006). With clear line of communication, companies can express their goals and expectations and clearly deliver messages to the external vendors. Also, effective communication ensures every party is involved in outsourced activities. 6.3 Culture In many instances, outsourcing arrangements run for several months and even years. It is therefore very significant for the parties involved to work in cooperation over the period of contract (Kishore et al., 2003). Effective working relationship is possible through the use of third-party service providers who share the same corporate culture with the contracting company. Similar corporate culture between an organization and the external vendor increases the chances of successful outsourcing. Lack of cultural compatibility may result in disagreements and miscommunication (Kishore et al., 2003). Also, lack of cultural compatibility creates a situation that only allows transactional relationship that rarely allows companies to enjoy the skills and expertise offered by service providers. Therefore, companies should always endeavour to form an outsourcing relationship with third-party providers who share the same corporate culture in order to increase the chances of success (Kishore et al., 2003). 6.4 Change Management Building an enduring relationship between a company and a third-party provider is only possible when a comprehensive change management policy is established (Kishore et al., 2003). Change management is considered an important element during outsourcing arrangements. Research studies have offered evidences that suggest that more than 50% of outsourcing contracts fail due to the inability of organization’s employees to properly interact with external vendors. Today, many companies acknowledge the importance of change management policy during outsourcing. Companies that fail to manage changes brought about by outsourcing suffer a great deal (Smith, Smith and Stringer, 2000). Therefore, active employment of change management is necessary in accomplishing the procedural changes associated with outsourcing. It is important for companies to adapt change management in order to assist the employees overcome fear and reduce the chances of change resistance. 7.0 Conclusion The main purpose of this paper was to determine the main reasons that encourage companies to outsource Information Technology and the benefits and challenges associated with the decision. Findings from the report reveal that the main reasons for outsourcing are categorized into technical reasons, environmental reason, business reasons and financial reasons. For instance, an organization may decide to outsource in order to reduce operations cost, increase competitive advantages and take advantage of technological innovation. Various benefits have been identified in companies that outsource their IT functions. Such benefits include flexibility, efficiency and cost saving among others. Despite all these benefits associated with outsources, many companies have suffered tremendously. Outsourcing leads to increasing operational cost, loss of control and people issues. The shortcoming associated with outsources are situations that can be rectified and addressed in order to survive. Success depends on effective management of outsourcing relationships through establishing clear line of communication, employing change management, and aligning cultures of the parties involved. 8.0 References Bahli, B & Rivard, S 2005, Validating measures of information technology outsourcing risk factors. Omega, vol. 33, no. 2, pp. 175-187. Baldwing, LP; Irani, Z and Love, P 2001, Outsourcing Information Systems: Drawing Lessons from a Banking Case Study. European Journal of Information Systems, Vol. 10, No. 1, pp. 15-24. Claver, E.; Gonzalez, R.; Gasco, J. and Llopis, J 2002, Information Systems Outsourcing: Reasons, Reservations and Success Factors. Logistics Information Management, Vol. 15 No. 4, pp. 294-308. Cullen, S., Seddon, P. B., & Willcocks, L. P 2005, IT outsourcing configuration: Research into defining and designing outsourcing arrangements. The Journal of Strategic Information Systems, vol. 14, no. 4, pp. 357-387. Deepen, J 2007, Logistics outsourcing relationships measurements, antecedents, and effects of logistics outsourcing performance, Heidelberg New York, Physica Verlag. Gnuschke, J.E., Wallace, J., Wilson, D.R. and Smith, S.C 2004, “Outsourcing production and jobs: costs and benefits. South Dakota Business Review, vol. 62, no. 4, pp. 1-7. Gonzalez, R.; Gasco, J. and Llopis, J 2005a, Information Systems Outsourcing Reasons in the Largest Spanish Firms. International Journal of Information Management, Vol. 25 No. 2, pp. 117-136. Gonzalez, R., Gasco, J and Llopis, J 2005b, Information Systems Outsourcing Risks: a Study of Large Firms. Industrial Management & Data Systems, Vol. 105 No. 1, pp. 45-62. Goo, J., Huang, C. D., & Hart, P 2008, A Path to Successful IT Outsourcing: Interaction Between Service-Level Agreements and Commitment. Decision Sciences, vol. 39, no. 3, pp. 469-506. Gottschalk, P & Solli-Sæther, H 2005, Critical success factors from IT outsourcing theories: an empirical study. Industrial Management & Data Systems, 105(6), pp. 685-702. Jiang, B. and Qureshi, A 2006, Research on outsourcing results: current literature and future opportunities. Management Decision, vol. 44, no. 1, pp. 44-55. Kehal, H & Singh, V 2006, Outsourcing and offshoring in the 21st century: a socio-economic perspective. Hershey, PA: Idea Group Pu. Kirk, S 2010, IT outsourcing: concepts, methodologies, tools, and applications, Hershey, PA: Business Science Reference. Kishore, R., Rao, H. R., Nam, K., Rajagopalan, S & Chaudhury, A 2003, A relationship perspective on IT outsourcing. Communications of the ACM, Vol. 46, no. 12, pp. 86-92. Kremic, T., Tukel, O.I. and Rom, W.O 2006, Outsourcing decision support: a survey of benefits, risks, and decision factors. Supply Chain Management, vol. 11, no. 6, pp. 467-482. Lacity, M. C., Khan, S. A., & Willcocks, L.P 2009, A review of the IT outsourcing literature: Insights for practice. The Journal of Strategic Information Systems, 18(3), pp. 130-146. Lau, K.H. and Zhang, J 2006, Drivers and obstacles of outsourcing practices in China. International Journal of Physical Distribution and Logistics Management, vol. 36, no. 10, pp. 776-792. Lee, J. N., Huynh, M. Q., Kwok, R. C. W & Pi, S. M 2003, IT outsourcing evolution: past, present, and future. Communications of the ACM, vol. 46, no. 5, pp. 84-89. Lin, C., Pervan, G & McDermid, D 2007, Issues and recommendations in evaluating and managing the benefits of public sector IS/IT outsourcing. Information Technology & People, vol. 20, no. 2, pp. 161-183. Pisano, G. P 2009, The U.S is Outsourcing Away Its Competitive Edge, International Business, Harvard Business Review. Power, M., Bonifazi, C. and Desouza, K.C. 2004, The ten outsourcing traps to avoid. Journal of Business Strategy, vol. 25, no. 2, pp. 37-42. Smith, K., Smith, D & Stringer, C 2000, Managing the outsourcing relationship, Sydney, UNSW Press Chartered Accountants ACMAD. Read More