Abhijit Chaudhury

A two-level investigation of information systems outsourcing

O UTSOURCING is the contracting of various systems to outside information systems (IS) vendors. Ever since the Eastman Kodak--IBM partnership was reported in 1989 [15], outsourcing has emerged and has been recognized as a key method of managing IS. In previous studies of outsourcing [4, 5, 12, 15, 17, 20], two gaps are noticeable. The first relates to the fact that requirements for outsourcing are not uniform, and managers have different approaches to the process. Yet most previous research studies have phrased their inquiries unidimensionally in terms of the extent or degree of outsourcing: either as a binary variable or as size of contract in terms of the percentage of total IS budget [5, 15]. Neither unidimensional gauge is sufficiently expressive; neither allows representation of diverse patterns of outsourcing. Second, even though the IS industry had not used the term “outsourcing” explicitly in the past, outsourcing is not a new concept and has existed for many years in one form or another. Even though firms have repetitively used outside vendors for years, researchers have neither considered prior relationships in their studies of IS outsourcing nor studied the intentions of client firms to continue the partnership with the outsourcing vendors in the future. In this study, IS outsourcing decisions are investigated at two levels. The first level deals with the initial outsourcing decision of client firms. The second level pertains to the intention to continue the relationships with current outsourcing vendors in the future. The following three research questions are explored at these two levels (in contrast to the singlelevel approach taken by most researchers): • What are the dimensions of outsourcing decisions? Two dimensions, extent of substitution by vendors and strategic impact of IS applications, are proposed in order to conceptualize the diverse types of outsourcing relationships between clients and vendors. Based on these two dimensions, four types of outsourcing relationships are proposed. • What are the determinants that affect the dimensions of outsourcing decisions at the first level? The concepts derived from incomplete contracts [2, 9] and transactions cost economics [23, 24] theory are used with information technology (IT) organizational contexts and processes as a foundation to study the determinants of the two dimensions of outsourcing decisions. Information Syst

An empirical investigation of decision-making satisfaction in web-based decision support systems

Web-based information systems are increasingly being used for decision support applications. However, few empirical studies have been conducted on web-based decision support systems (DSS). This experimental research endeavors to understand factors that impact decision-making satisfaction in web-based decision support systems. Using structural equation modeling (SEM) approach, the analysis reveals that information quality and system quality influence decision-making satisfaction, while information presentation does not have an effect on decision-making satisfaction.

A relationship perspective on IT outsourcing

A longitudinal study at four companies provides valuable insights about the evolution of IT outsourcing relationships.

Management of Information Systems Outsourcing: A Bidding Perspective

Abstract:Outsourcing is the contracting of various information systems’ subfunctions by user firms to outside information systems vendors. A critical factor in the outsourcing process is the bidding and vendor selection mechanism. This paper describes the process of outsourcing and identifies the various stages involved. Subsequently, considering that cost reduction is a driving force of outsourcing for user-firms, this paper proposes a bidding mechanism to reduce expected outsourcing costs in the final bidding and vendor selection process. The paper studies outsourcing contracts of routine and repetitive activities such as maintenance and operation of telecommunication networks. A realistic scenario is studied, wherein multiple vendors bid for such contracts and where one vendor has cost and expertise advantages over other vendors and as a result tends to inflate bids. A mixed integer programming model is formulated for a multiple vendor scenario. In general, the results suggest a prescription that calls...

Knowledge acquisition via three learning processes in enterprise information portals: learning-by-investment, learning-by-doing, and learning-from-others

An enterprise information portal (EIP) is viewed as a knowledge community. Activity theory provides a framework to study such a community: members of an EIP conduct specific tasks that are assigned through a division of labor. Each member of an enterprise information portal can undergo three distinct types of learning processes: learning-by-investment, learning-by-doing, and learning-from-others. Through these three types of learning processes, each member achieves specialized knowledge that is related to his or her own task. Cumulative knowledge resulting from the learning processes is considered in terms of two distinct attributes: depth and breadth of knowledge. This paper formulates a mathematical model and defines the goal of an EIP member as maximizing the net benefits of knowledge resulting from individual investment and effort. Numerical examples are provided to analyze patterns of optimal investment and effort plans as well as the resulting accumulated knowledge. The results provide useful managerial implications. In business conditions characterized by high interest rates or high internal rate of returns, it is preferable for members to delay spending their resources for learning. Intensive investment and efforts to obtain knowledge are preferable when the discount rate of costs is high, when knowledge is durable, when the value of knowledge is high, when the initial level of knowledge is high, when the productivity of the learning process is high, and when sufficient knowledge is transferred from other members. On the other hand, the size of the EIP has a positive or negative effect depending on the attribute of knowledge and the productivity of learning processes. Further properties of the optimal decisions and learning processes are analyzed and discussed.

Research Note---A Value-at-Risk Approach to Information Security Investment

Information security investment has been getting increasing attention in recent years. Various methods have been proposed to determine the effective level of security investment. However, traditional expected value methods (such as annual loss expectancy) cannot fully characterize the information security risk confronted by organizations, considering some extremal yet perhaps relatively rare cases in which a security failure may be critical and cause high losses. In this research note we introduce the concept of value-at-risk to measure the risk of daily losses an organization faces due to security exploits and use extreme value analysis to quantitatively estimate the value at risk. We collect a set of internal daily activity data from a large financial institution in the northeast United States and then simulate its daily losses with information based on data snapshots and interviews with security managers at the institution. We illustrate our methods using these simulated daily losses. With this approach, decision makers can make a proper investment choice based on their own risk preference instead of pursuing a solution that minimizes only the expected cost.

Studying the current status of technology adoption

Examining the extent and nature of adoption of technologies by micro, small, and medium-sized manufacturing firms in the greater Boston area.

Web channels in e-commerce

A popular commercial use of the Web is for busi-ness advertising. When companies set up their Websites, their first goal is usually to advertise the prod-ucts and services they offer. Applications of thiskind are called “shop-front” applications. MostWeb sites evolve from shop-front sites to providingsome elements of interactivity. Customers canreview products, send comments to the Web mas-ter, leave behind some demographic information,customize their user profiles, and so forth. Webapplications have historically progressed from thissimple interactive level to becoming full-fledgedordering systems. Activities such as customer sup-port, customer services and after-sales support areprimarily information-based and, therefore, theWeb can play a significant role. For a businessintending to serve its customers, the Web canreplace expensive 800-number help lines andpaper-based documents with interactive servicesand easily updateable online information. Theinvestment in hosting such services can save moneyand please customers at the same time [5].

Information systems outsourcing

I NFORMATION systems (IS) outsourcing-the contracting of various IS functions, such as data center management, operations , telecommunications, and software maintenance by user-firms to outside vendors has existed in one form or another for years. Recently, however, the trend towards outsourcing has become a major IS phenomenon, as evidenced by increasing press coverage. A number of major contracts have been reported: IBM and MCI running Merrill Lynchs network, McDonnell Douglas and Genix running American Stan-dards data and network operations, as well as the

Technology management education in MBA programs: a comparative study of knowledge and skill requirements

3 billion partnership between Computer Sciences and General Dynamics. Traditionally, as small firms grew larger, they integrated important subfunctions within their boundaries. But these customs have evolved, especially in recent years. Indeed, current outsourcing trends show that large companies are relinquishing their IS operations and are reported to be major outsourc-ing clients. Moreover, outsourcing contract costs may run into hundreds of millions of dollars. An example is the