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Top2. Research Question
Building on the problem statement as discussed in previous section, this paper proposes an alternative approach, based on the concept of modularity, to identify outsourcing risks ex-ante. The modularity concept states that a system can be decomposed into several interrelated subsystems (i.e., modules). This concept, originating from systems theory, turned out to be a successful means for controlling complex systems in several domains, including product design, software design, etcetera (Baldwin & Clark, 2000). Because outsourcing projects are generally conceived as being complex, especially in dynamic environments, it seems reasonable to explore the possibilities of using the modularity concept in addressing outsourcing complexities. As a matter of fact, several scholars have recently suggested a possible link between the general concepts of ‘modularity’ and ‘outsourcing’ (see e.g., (Campagnolo & Camuffo, 2010; Tiwana, 2008)). More specifically, various authors link modularity to the explanation of outsourcing failures (Hecker & Kohleick, 2006; Zirpoli & Becker, n.d.). However, many of these scholars only identify this link while the call for more in-depth case analyses remains unresolved.
Given this lack of in-depth research, it seems plausible that such an alternative perspective can help in complementing existing outsourcing risk analyses with new and deeper insights, as such providing a more complete basis to define a more exhaustive list of mitigating actions. The research question of this paper can therefore be formulated as follows: How can the concept of modularity help in obtaining a better ex-ante understanding of outsourcing risks? To answer this question, this paper analyzes the BSkyB outsourcing case: a failed outsourcing project between EDS (the vendor) and BSkyB (the client), of which extensive and objective case details are publicly available in the form of court proceedings. Even though this outsourcing case has already been scrutinized by some scholars (Verner & Abdullah, 2012), to the best of our knowledge no profound case analysis has discussed this case in relation to the modularity concept.