Eliminating the Weakest Link: Leveraging Human Capital with Strategic Alliances in IT Outsourcing Supply Chains

Abstract

As organizations shift from tactical to strategic approaches with IT outsourcing, their human capital portfolios of knowledge, skills, competencies, and organizational capabilities need to be reconfigured accordingly. This chapter outlines a model for constructing human capital portfolios that enable firms to strategically leverage IT outsourcing. Two organizational capabilities—rational strategic management process and connective capabilities—provide the integrating mechanisms for competencies from three sub-units that are human resource information systems (HRIS), the IS function, and supply chain management. Knowledge and skills at the individual and sub-unit level enable the development of competencies that are integrated by organizational capabilities. Given the dynamic nature of competitive contexts, managers have to reconfigure their organizations’ human capital portfolio to align their firms with the external environment. In sum, creating human capital portfolios for strategic IT outsourcing supply chains requires a multi-level and multi-disciplinary approach to identify and strengthen the weakest links.