Process and Structural Implications for IT-Enabled Outsourcing

Process and Structural Implications for IT-Enabled Outsourcing

Paul Drnevich (University of Alabama, USA), Thomas H. Brush (Purdue University, USA) and Gregory T. Luckock (Raytheon Professional Services LLC, USA)
DOI: 10.4018/jsita.2011100103
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Abstract

Recent research examined the non-traditional, but increasingly common case of the use of IT to facilitate theoretically inconsistent outsourcing decisions involving (strategic) core firm resources and asset-specific capabilities. It further illustrated how IT can enable such outsourcing decisions and how performance advantages may ensue. However, the process and structural implications of such practices remain unexamined. This paper extends this area of research by proposing three distinct approaches to IT-enabled business process outsourcing (BPO). The authors differentiate these approaches by the timing of when the outsourcing vendor takes ownership of the activity, and when and where any transformation of the activity takes place. The authors label these processes by the order of the initial activities that lead the outsourcing process, (e.g., transformation, transition, or a transfer of an organizational activity). The authors illustrate and discuss the implications of the propositions through several real-world case examples.
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Theory Development

In this section, we illustrate three distinct approaches to IT-enabled BPO and KPO (Graf & Mudambi, 2005; Sen & Shiel, 2006) which appear to conflict with current theoretical arguments for outsourcing. We differentiate these approaches by the timing of when the outsourcing vendor takes ownership or responsibility for the activity associated with the knowledge resource or capabilities, and when and where any transformation of the activity takes place. We label these processes by the order of the initial activities that lead the outsourcing process, (e.g., transformation, transition, or a transfer of an organizational activity). Borrowing from commonly accepted consulting terminology, we term these three outsourcing processes as transform-transition, transition-transform, and transfer, based on the order and combination of outsourcing activities.

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