Global Services Outsourcing

✍ Scribed by Ronan McIvor

• Publisher: Cambridge University Press
• Year: 2010
• Tongue: English
• Leaves: 300
• Edition: 1
• Category: Library

✦ Synopsis

Services outsourcing is an increasingly attractive option for firms seeking to reduce costs and achieve service improvements. Many organisations now choose to transfer responsibility for entire functions such as human resources, finance and information technology services to both local and global vendors. Yet outsourcing such functions is a complex process, one that is driven by factors that transcend cost considerations alone. Issues such as service design, unbundling processes, managing work across different cultures and time zones, and business process redesign have all become important elements of managing services outsourcing arrangements. This book uses tools and techniques from a variety of disciplines to show how to successfully plan, implement and manage services outsourcing arrangements. Based on in-depth analysis of large-scale outsourcing arrangements across a wide range of sectors, this is an excellent resource for both academics and practitioners who wish to understand more about this complex phenomenon.

✦ Table of Contents

Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 7
Figures......Page 10
Tables......Page 11
Illustrations......Page 13
Acknowledgements......Page 15
1 Introduction......Page 17
2.2 The services revolution......Page 23
2.3 Services outsourcing......Page 26
Local in-house sourcing......Page 29
Sourcing from foreign subsidiaries......Page 30
Outsourcing to foreign vendors......Page 31
Select the outsourcing strategy......Page 32
Business process perspective......Page 33
Developments in information and communication technologies (ICTs)......Page 37
Globalisation and emerging economies......Page 39
The shareholder value model......Page 42
Corporate restructuring......Page 43
2.7 The arguments for services outsourcing......Page 44
2.8 The arguments against services outsourcing......Page 46
2.9 Influences on the mobility of service processes......Page 47
Customer contact......Page 48
The need for physical presence......Page 49
Security and confidentiality influences......Page 50
2.10 How service characteristics create outsourcing challenges......Page 53
2.11 Summary implications......Page 56
Notes and references......Page 57
Recommended key reading......Page 59
3.1 Introduction......Page 61
3.2 Transaction cost economics and the resource-based view......Page 62
3.4 An overview of the outsourcing methodology......Page 64
Contribution of the process to competitive advantage......Page 66
Relative capability position in the process......Page 67
Potential for opportunism......Page 69
Invest to perform internally......Page 72
Outsource......Page 74
Perform internally and develop......Page 76
Outsource......Page 77
Quadrant Three......Page 78
Outsource......Page 81
3.6 The outsourcing relationship......Page 82
Recurrent contracting......Page 84
Relational contracting......Page 85
3.7 Summary implications......Page 92
Notes and references......Page 93
Recommended key reading......Page 94
4.1 Introduction......Page 95
4.2 Location choice......Page 96
Culture......Page 97
Geographic distance......Page 99
Language......Page 100
How culture, language and geographic distance affect the location distance choice......Page 101
Infrastructure......Page 102
Legal factors......Page 103
Labour issues......Page 105
4.3 Sourcing model choice......Page 108
Captive model......Page 109
The build–operate–transfer model......Page 110
Fee-for-service model......Page 111
Process interdependencies......Page 114
Risk......Page 115
Knowledge intensity......Page 116
Codification......Page 120
Standardisation......Page 121
Modularisation......Page 122
4.6 Summary implications......Page 125
Notes and references......Page 127
Recommended key reading......Page 128
5.1 Introduction......Page 130
5.2 Software development outsourcing......Page 131
5.3 Strategies for managing global software development outsourcing projects......Page 133
Formal strategy......Page 135
Preliminary requirements analysis......Page 137
Evaluation......Page 138
Contracting......Page 139
Establish effective client–vendor interfaces......Page 141
Employ appropriate communication media......Page 146
Knowledge management......Page 150
Managing culture......Page 154
Managing time zone differences......Page 157
5.6 Summary implications......Page 161
Notes and references......Page 162
Recommended key reading......Page 164
Benefits of shared services......Page 165
Drivers of shared services arrangements......Page 166
6.2 Structured project management approach......Page 170
Development a ‘vision’ for the new arrangement......Page 172
6.4 Vendor engagement......Page 175
Negotiation......Page 177
Consortium selection......Page 179
Online service......Page 181
6.6 Change management......Page 183
HR professionals......Page 184
6.7 Stakeholder management......Page 185
Departmental HR staff......Page 188
Line managers......Page 189
6.8 Business process redesign......Page 191
6.9 Strategic partnership development......Page 193
6.10 Summary implications......Page 194
Notes and references......Page 196
Recommended key reading......Page 197
7.1 Introduction......Page 198
7.2 Services outsourcing and performance management......Page 199
Performance management and managing outsourcing arrangements......Page 200
Stage 1: Cost analysis......Page 202
Stage 2: Benchmarking......Page 207
Analyse the process......Page 208
Identify potential partners......Page 212
Collect and analyse data......Page 213
Stage 3: Sourcing option selection......Page 216
Determine requirements......Page 217
Establish performance measures and standards......Page 218
Stage 5: Vendor performance evaluation......Page 220
Resource commitment......Page 221
Flexibility......Page 222
Stage 6: Take appropriate action......Page 224
7.4.Challenges and benefits of performance management in the outsourcing process......Page 225
7.5 Summary implications......Page 226
Notes and references......Page 227
Recommended key reading......Page 229
8.1 Introduction......Page 230
8.2 Background to the spin-off......Page 234
The search for a vendor......Page 235
8.4 The structure of the spin-off arrangement......Page 236
Selection of target markets......Page 238
Capability development through acquisitions......Page 239
Lack of expertise in acquisitions......Page 240
Overdependence on the IT services market......Page 241
Ineffective service level agreements (SLAs)......Page 242
Restructuring the spin-off company......Page 243
Addressing the relationship difficulties......Page 244
Plan and implement an achievable growth path......Page 250
Understand processes and interdependencies......Page 251
Recruit new talent......Page 252
Notes and references......Page 253
Recommended key reading......Page 254
9.1 Introduction......Page 255
9.2 Business process outsourcing: a case of failure......Page 256
9.4 Effective sourcing strategy......Page 264
9.5 Business process analysis and redesign......Page 269
9.6 Knowledge management......Page 271
9.7 Employing contracting and collaboration as complements......Page 277
9.8 Summary implications......Page 279
Notes and references......Page 281
Recommended key reading......Page 282
Conflicting incentives......Page 283
Skills deficit......Page 284
Unbundling service processes......Page 285
Deciding where to outsource......Page 286
Determining requirements from outsourcing......Page 287
Stakeholder management......Page 288
Performance management......Page 289
Formal and relational contracting as complements......Page 290
Notes and references......Page 291
Glossary......Page 292
Index......Page 297