Jens Dibbern

An Introduction to a Permutation Based Procedure for Multi-Group PLS Analysis: Results of Tests of Differences on Simulated Data and a Cross Cultural Analysis of the Sourcing of Information System Services Between Germany and the USA

To date, multi-group comparison of Partial Least Square (PLS) models where differences in path estimates for different sampled populations have been relatively naive. Often, researchers simply examine and discuss the difference in magnitude of specific model path estimates from two or more data sets. When evaluating the significance of path differences, a t-test based on the pooled standard errors obtained via a resampling procedure such as bootstrapping from each data set is made. Yet problems can occur if the assumption of normal population or similar sample size is made. This paper provides an introduction to an alternative distribution free approach based on an approximate randomization test – where a subset of all possible data permutations between sample groups is made. The performance of this permutation procedure is tested on both simulated data and a study exploring the differences of factors that impact outsourcing between the countries of US and Germany. Furthermore, as an initial examination of the consistency of this new procedure, the outsourcing results are compared with those obtained from using covariance based SEM (AMOS 7).

The impact of cultural differences in offshore outsourcing--Case study results from German---Indian application development projects

Offshore outsourcing to vendors in foreign countries causes unique challenges which need to be understood and managed effectively. This paper explores cultural differences in IS offshoring arrangements involving German client organizations that outsource application development activities to Indian vendors. For this purpose, a research framework is developed based on both theoretical considerations and specific empirical observations from multiple case studies. The goal is to (1) explore the nature of cultural differences in offshore outsourcing arrangements in depth and to (2) analyze the relationship between those cultural differences and offshore outsourcing success. Based on the case findings, implications and practices for the management of offshore development projects are outlined. The results indicate that cultural differences in terms of power distance, IS designer values, and an active versus passive working attitude critically affect several dimensions of relationship quality, thereby influencing offshore outsourcing success. A clear definition of roles and mechanisms, strong leadership, and an active management of culture by adapting to either the client’s or the vendor’s national culture appeared to be effective ways to manage cultural differences.

Risks and benefits of business process outsourcing: A study of transaction services in the German banking industry

We developed a model of the adoption of business process outsourcing (BPO) based on risk-benefit analysis. The model was tested in the German banking industry in four areas of transaction processing. Our results showed that, in general, perceived BPO benefits have a substantially stronger impact on intention to increase the level of BPO than perceived risks. However, the experience that banks have with the BPO process, [whether already decided on BPO (Pro), still in the pre-decision phase (Neutral), or opted against BPO (Contra)], moderated the impact of factors affecting the perceived risks and benefits of BPO. Banks that opted for BPO were mostly driven by a desire to focus on their core business while considering financial risks. Banks in the neutral position had the most balanced view of risks and benefits, mainly financial and performance ones, and also focusing on the core business and increased business process performance. Those banks that decided against BPO mostly focused on benefits while the perceived risks were mostly formed by strategic and performance risks rather than financial ones. The results point out the path dependencies of the BPO decision.

A Process Model of Complementarity and Substitution of Contractual and Relational Governance in IS Outsourcing

This paper develops a process model of how and why complementarity and substitution form over time between contractual and relational governance in the context of information systems outsourcing. Our analysis identifies four distinct process patterns that explain this formation as the outcome of interaction processes between key elements of both contractual and relational governance. These patterns unveil the dynamic nature of complementarity and substitution. In particular, we show that the relationship between contractual and relational governance oscillates between complementarity and substitution. Those oscillations are triggered mainly by three types of contextual events (goal fuzziness, goal conflict, and goal misalignment). Surprisingly, substitution of informal control did not occur as an immediate reaction to external events but emerged as a consequence of preceding complementarity. Thus, our study challenges the prevailing view of an either/or dichotomy of complementarity and substitution by showing that they are causally connected over time.

Information Systems Outsourcing in the New Economy — An Introduction

When Eastman Kodak announced that it was outsourcing its information systems (IS)1 function in 1989 to IBM, DEC and Businessland it created quite a stir in the information technology (IT) industry. Never before had such a well-known organization, where IS was considered to be a strategic asset, turned it over to third party providers (Applegate and Montealegre, 1991). Since then both large and small companies have found it acceptable, indeed fashionable, to transfer their IS assets, leases and staff to outsourcing vendors (Arnett and Jones, 1994). Kodak appears to have legitimized outsourcing, leading to what some have called “the Kodak effect” (Caldwell, 1994). Senior executives at well known companies in the U.S. have followed Kodak’s example and signed long term contracts worth hundreds of millions of dollars with outsourcing “partners”. A number of highprofile multi-billion dollar “mega-deals” have been signed which has raised awareness even more. A recent Dataquest report (2000) notes that since 1989 there have been over 100 of these mega-deals (Young, 2000).

Foreword to the special issue on IS sourcing

Information systems (IS) sourcing refers to the entire set of processes ranging from initiating and preparing the decision to provide an organizations IS functions. IS sourcing is closely related to the steady change and provides a collection of research studies that have either addressed one or more of the research gaps in traditional IS outsourcing. It gained momentum by the appearance of IS outsourcing megadeals involving clients such as Kodak, Continental Bank, and BP with providers such as Electronic Data Systems and International Business Machines. The IS outsourcing phenomenon has moved beyond the boundaries of the IS function to include entire information technology (IT)-supported business processes.

Der Einfluss kultureller Unterschiede beim IT-Offshoring

KernpunkteDieser Beitrag zeigt auf der Basis von sechs Anwendungsentwicklungsprojekten in Indien, welche kulturellen Einflussgrößen bei der Auslagerung von IT-Projekten einzubeziehen sind, wie diese Determinanten den Projekterfolg beeinflussen und durch welche Maßnahmen von Seiten des Managements kulturelle Herausforderungen zur Sicherung des Projekterfolgs gemeistert werden können:Als kritische Kulturfaktoren haben sich Unterschiede in der Machtdistanz, dem Designverständnis und der aktiven versus passiven Arbeitseinstellung herauskristallisiert.Diese Faktoren wirken direkt auf wichtige Stellgrößen der Beziehungsqualität, wie dem Vertrauen, der Leistung des Anbieters, dem Grad der Kooperation und auftretenden Konflikten. Auf diese Weise wirken sie indirekt auf den Erfolg von Offshoring-Projekten.Eine klare Definition von Rollen und Mechanismen, starke Mitarbeiterführung und ein aktives Kulturmanagement, das eine Anpassung an die Kultur des Kunden oder an die des Anbieters beinhaltet, haben sich als effektive Managementmaßnahmen zur Bewältigung kultureller Herausforderungen herausgestellt.AbstractRecently, offshoring of information systems (IS) services to external vendors has seen considerable growth. Outsourcing to vendors in foreign countries causes unique challenges which need to be understood and managed effectively. This paper explores cultural differences in IS offshoring arrangements involving German client organizations that outsource application development activities to Indian vendors. For this purpose, a research framework is developed based on both theoretical considerations and specific empirical observations from multiple case studies. The goal is to (1) explore the nature of cultural differences in offshoring arrangements in depth and to (2) analyze the relationship between those cultural differences and offshoring success.

Interpretation des Sourcings der Informationsverarbeitung: Hintergründe und Grenzen ökonomischer Einflussgrößen

This article aims to develop a more profound understanding of the heterogeneous behaviour in the field of Information Systems (IS) Outsourcing in German organizations. Based on multiple case studies in the German Manufacturing Industry, it demonstrates that resource deficits serve as an overriding contingency for the outsourcing decision. However, specific knowledge on internal business processes may lead to production cost advantages for the firm and, thus, inhibits the outsourcing of IS functions. Furthermore, cultural variables like distrust and sociability serve as additional contingencies for explaining heterogeneous outsourcing patterns.

Rethinking ERP-outsourcing decisions for leveraging technological and preserving business knowledge

During the selection, implementation and stabilization phases, as well as the operations and optimization phase of an ERP system (ERP-lifecycle), numerous companies consider to utilize the support of an external service provider. This paper analyses how different categories of knowledge influence the sourcing decision of crucial tasks within the ERP lifecycle. Based on a review of the IS outsourcing literature, essential knowledge-related determinants for the IS outsourcing decision are presented and aggregated in a structural model. It will be hypothesized that internal deficits in technological knowledge in comparison to external vendors as well as the specificity of the synthesis of special technological and specific business knowledge have a profound impact on the outsourcing decision. Then, a classification framework will be developed which facilitates the assignment of various tasks within the ERP lifecycle to their respective knowledge categories and knowledge carriers which might be internal or external stakeholders. The configuaration task will be used as an example to illustrate how the structural model and the classification framework may be applied to evaluate the outsourcing of tasks within the ERP lifecycle.

Outsourcing of Information Systems in Small and Medium Sized Enterprises: A Test of a Multi-Theoretical Causal Model

This paper examines the situation of information systems (IS) outsourcing in a business sector intrinsic to small and medium sized enterprises (SME). Based on transaction cost theory, resource-based theory and power theory, the critical determinants for IS outsourcing are deduced and summarized within a theoretical framework. The framework is transformed into a structural equation model and empirically tested using 34 SME across five different IS functions. The main results of this study are as follows: Overall, the share of IS outsourcing in SME may be categorized as moderate. The IS functions in SME are selectively outsourced, i.e., the degree of outsourcing varies across different IS functions. Whereas applications development makes up the largest share thereof, planning and management remain mostly within the boundaries of the firm. An assessment of internal resource deficits vis-a-vis external service providers establishes the predominate determinant which explains the varying degrees of outsourcing IS functions. Contrastingly, rationality calculations, such as consideration of transaction costs and assessment of the strategic significance of IS, seem to recede to the background.