Kichan Nam

The role of service level agreements in relational management of information technology outsourcing: an empirical study

This study extends the view that formal contracts and relational governance function as complements rather than as substitutes. We investigate how specific characteristics of service level agreements (SLAs) impact relational governance in information technology outsourcing relationships. Eleven contractual elements (categorized into three SLA characteristics: foundation, change, and governance characteristics) are hypothesized to act as complements of three relational governance attributes: relational norms, harmonious conflict resolution, and mutual dependence. Data for the study were collected through a survey of South Korean IT executives. Results of the study support the fundamental proposition of complementarity between formal contracts and relational governance, and indicate that well-structured SLAs have significant positive influence on the various aspects of relational governance in IT outsourcing relationships. However, the study also reveals that change characteristics of SLAs may act as a substitute for relational governance as these characteristics were found to dampen the level of trust and commitment through moderation effects. Overall, the findings support the proposition that well-developed SLAs not only provide a way to measure the service providers performance, but also enable effective management of outsourcing engagements through the development of partnership-style relationships with high levels of trust and commitment.

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

A relationship perspective on IT outsourcing

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

An investigation of factors that influence the duration of IT outsourcing relationships

Past studies in the IT outsourcing area have examined the management of IT outsourcing relationships from a variety of perspectives. The present paper extends this line of research. In this study, we take a multi-theoretic perspective to explore factors that determine the duration of continuing IT outsourcing relationships between vendor and client firms. Five ex-ante and two ex-post factors that may influence relationship duration were examined in this study. Data for this study were collected using a nationwide survey. To investigate the dynamics of continuing outsourcing relationships through repetitive contracts, we performed survival analysis using an accelerated failure-time (AFT) model. Four factors are found to have a significant relationship with relationship duration as hypothesized. However, three factors, of which two are ex-post factors, are found to not have a significant impact on outsourcing relationship duration. Implications and contributions of the study are discussed.

Validating E-learning factors affecting training effectiveness

The development of information technologies has contributed to the growth in online training as an important education method. E-learning provides trainees with education opportunities in diverse ways. It has led to a range of innovative services offering one-stop educational solutions within the e-business sector. The online training environment enables trainees to undertake customized training at any time and any place. Moreover, information technology allows both the trainers and trainees to be decoupled in terms of time, place, and space. The purposes of this research are twofold: (1) To discover the determinants of effective online training and; (2) To reveal how those variables affect learning performance and transfer performance, two important aspects of training effectiveness in the workplace. This paper demonstrates, through empirical data, a positive relationship between individual, organizational and online training design constructs and training effectiveness constructs (learning and transfer performance).

User behaviour towards protective information technologies: the role of national cultural differences

Computer technologies that protect data and systems from viruses, unauthorized access, disruptions, spyware and other threats have become increasingly important in the globally networked economy and society. Yet little is known about user attitudes and behaviour towards this category of information technologies. Comparative studies across different cultures in this context are even rarer. In this study, we examine the cross‐cultural differences between South Korea and the United States in user behaviour towards protective information technologies. We develop a theoretical model of user behaviour based on the framework of the theory of planned behaviour and national cultural dimensions and indices. We posit that cultural factors moderate the strength of the relationships in the behavioural model in the context of protective information technologies. The model was then empirically tested using structural equation modelling techniques in conjunction with multi‐group analysis. Most of the hypothesized moderating effects of national cultural factors were found to be statistically significant. Our findings suggest that cultural factors should be considered in order to design effective information security policies, practices and technologies in global networks where multiple cultures coexist. Theoretical and practical implications of the study are discussed.

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...

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

Contract as a Source of Trust--Commitment in Successful IT Outsourcing Relationship: An Empirical Study

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

Do e-business strategies matter? The antecedents and relationship with firm performance

4.1 billion, 10-year partnership between Xerox and EDS. In contrast to traditional IS management, many IS functions today are being transferred to IS vendors. Depending on the types of contracts , IS employees are also transferred sometimes. Previously, it was a given that nonstrategic IS applications would be outsourced, while strategic IS applications would be in-sourced. However, vendors whose roles have been limited to noncore and commodity functions are gradually handling strategic applications. As clients gain confidence that vendors can manage strategic applications effectively, strategic functions are expected to be outsourced. Nevertheless, there still exists conflicting arguments for and against outsourcing. Proponents of the practice argue that it results in significant cost reduction with increased management control, effective use of staff, capacity on demand, and access to advanced facilities. Outsourcing is becoming especially attractive for firms involved in mergers, acquisitions , and leveraged buyouts. Also, firms