Information Systems Outsourcing Decision Making: A Managerial Approach

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The question of outsourcing is inherently part of organizing the information systems function of any organization. It is an important decision, that can have far reaching consequences on short and long term strategic plans of any organization. Information Systems Outsourcing Decision Making: A Managerial Approach is a book that is intended to support organizations that are considering or have chosen to outsource. In this book, Leon de Looff provides a model for IS outsourcing decision making that managers can use...

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Overview

The question of outsourcing is inherently part of organizing the information systems function of any organization. It is an important decision, that can have far reaching consequences on short and long term strategic plans of any organization. Information Systems Outsourcing Decision Making: A Managerial Approach is a book that is intended to support organizations that are considering or have chosen to outsource. In this book, Leon de Looff provides a model for IS outsourcing decision making that managers can use during analysis of whether outsourcing will be sensible and beneficial for their organization, and during selection of a supplier and design and management of the outsourcing relationship.

Leon A. de Looff is a Research Associate in the Faculty of Mathematics and Informatics at the Delft University of Technology in The Netherlands. He is an accomplished lecturer on information economics and information management. His research interests over the past several years have included organizational and economic aspects of information technology management, particularly the role of outsourcing and how organizations can utilize its concepts and practice to improve their strategic and market postures.

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Product Details

Table of Contents

Renewed Attention for IS Outsourcing 2
Relevance of IS Outsourcing 6
IS Outsourcing Decision Making 8
Information Systems Function 19
Division of Labor and Coordination 49
Transaction Cost Theory 60
Agency Cost Theory 70
Competitive Strategy 76
Case Studies 96
Designing the Outsourcing Relationship 205
Implementation, Management and Termination 230
Consequences of Outsourcing Decisions 259
Situational Factors 261
A Model for IS Outsourcing Decision Making 268
Selecting the IS Supplier 271
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Preface

Organizations are increasingly considering outsourcing part or all of their information systems activities to external suppliers. Some client organizations have very high expectations of outsourcing, fed by positive media attention and eloquent suppliers. Other clients doubt whether the improvements attributed to outsourcing will arise and fear that they will become overly dependent on external suppliers. The main conclusion of the research presented in this book is that outsourcing only leads to the improvements decision makers expect if specific conditions are fulfilled, and that it may otherwise even appear to be detrimental to the organization. Improvements from outsourcing are never achieved automatically but must be supervised, and enforced if necessary, by the client organization. The question of outsourcing is an inherent part of organizing the IS function of any organization. It is an important decision, that can have-reaching short and long term consequences, both positive and negative. The management of any organization should, when (re)organizing the IS function, decide what part of the IS function is to be performed internally and what part could be better outsourced to external suppliers.

IS outsourcing decisions should be taken with care, as today the IS function plays an important role in most organisations. The IS function is the aggregate of activities and resources needed to establish and sustain the information systems an organization needs. The IS function often takes up an increasingly large part of an organization's expenditures. Nowadays almost every organization depends to some extent on computerized information systems and the IS function is often of strategic importance to the organization. Furthermore the strategy of an organization can be supported or limited by the possibilities of information technology. Innovative information systems can even support and pave the way for new products or services. The question of who is to provide these information systems is therefore very important.

The research described in this book is intended to support the management of organizations that are considering or have chosen to outsource. A model for IS outsourcing decision-making is provided in this book. Managers can use this model during analysis to decide whether outsourcing will be sensible and beneficial for their organization. The model is also intended to be used during the supplier selection process and to design and manage the outsourcing relationship. The model is based upon established organizational theories and case study research. The model is described in chapter 5, which can be read and used independently from the other chapters of this book.

Recommendations for IS suppliers are given which can used when developing marketing strategies and strategies for the acquisition and tendering process. The result of this research is intended to be used in practice, I therefore look forward to receiving comments and suggestions, and I am willing to answer questions from practitioners implementing the guidelines provided in this book.

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