OUTSOURCING OF INFORMATION TECHNOLOGY

Outsourcing of Information Technology as the Competitive Advantage

By

ACKNOWLEDGEMENT

Iwould take this opening to express gratitude my study supervisor, family and associates for their support and guidance without which this study would not have been possible.

DECLARATION

I, [……], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own attitudes and not inevitably those of the University.

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Abstract

Aim - To investigate contribution of outsourcing of information technology, towards gaining competitive advantage

Purpose - This paper seeks to provide competitive advantage and assessment methodologies for executives of global conglomerates with the selection of variables which can help them evaluate outsourcing decisions.Design/methodology/approach - The range of established theories, which addressed outsourcing decisions, are identified. Major determinants of international outsourcing were then formulated into an integrated model. Each of variables identified was validated using multiple theories. Finally, the weighted score index was used to demonstrate how variables can be used to evaluate outsourcing decisions.Findings - It provides an overview of outsourcing theories about variety of major reasons and their associated determinants as well as attributes that are relevant to decision-makers. It showed that individual theories can be integrated into the global competitive advantage. This competitive advantage can be assessed using the weighted-index because inputs and computation processes contain realistic qualitative and quantitative information.Research limitations/implications - It is an assessment methodology that requires input and judgment from the variety of experts. Persons having such expertise may be fairly costly and difficult to find.Practical implications - The very simple, yet comprehensive, and useful competitive advantage for executives making outsourcing decisions. Assessment index is the proven methodology that is used by business consultants for the variety of related applications involving decision choices.Originality/value - This paper fulfills need for the more comprehensive view and the systematic approach to assessment of outsourcing decisions. index of attributes identified and evaluation technique proposed are the practical approach.

Table of Contents

ABSTRACT4

CHAPTER I: INTRODUCTION8

Introduction8

Importance of the Study8

Background9

Definition of IT outsourcing11

Research Gap12

Aim of Research13

Research Question13

Brief Outline of Primary Research14

Chapter-Wise Summary14

CHAPTER II: LITERATURE REVIEW16

2.1 Brief review of literature16

2.2 Towards the global competitive advantage of IT outsourcing19

2.3 Organization Approval Outsourcing, Process19

2.4 Organizational Adoption of Outsourcing: Determinants20

2.5 The review of outsourcing frameworks in literature28

2.6 Validation of competitive advantage31

2.7 Evaluation of competitive advantage: outsourcing determinant index(ODI)32

2.8 Hypothesis33

CHAPTER III: METHODOLOGY36

CHAPTER IV: RESULTS & DISCUSSION46

Validity, Reliability & Ethics46

Results46

Interview result of case 1: IT Outsourcing in private sector52

Strategic role of IT59

IT outsourcing strategy60

Strategic IT outsourcing61

Requirements for an outsourcing framework64

The description of outsourcing framework66

Stage 1 - Defining core activities of business66

Step 2 - Assess relevant activities of value chain67

Stage 3 - Analysis of total cost of basic activities70

Stage 4 - Relationship analysis75

Key problems with outsourcing process77

Limited cost analysis78

Core business definition79

CHAPTER V: CONCLUSIONS AND FUTURE RESEARCH81

APPENDIX85

REFERENCES100

Outsourcing of Information technology as the Competitive Advantage

Chapter I: Introduction

Introduction

Information technology (IT) outsourcing is now an accepted practice and market is growing steadily with market for 2005 is expected to reach ...