Abstract
The 2010 Journal of Information Technology (JIT) article, ‘A Review of the IT Outsourcing Empirical Literature and Future Research Directions,’ analyzed 741 findings on the determinants of Information Technology Outsourcing (ITO) decisions and outcomes from 164 empirical articles published between 1992 and 2010. Using the same coding method, the 2011 JIT article, ‘Business Process Outsourcing Studies: A Critical Review and Research Directions,’ analyzed 615 findings on the determinants of Business Process Outsourcing (BPO) decisions and outcomes from 67 empirical articles published between 1996 and 2011. Taken together, these two reviews found that the preponderance of evidence from both ITO and BPO research streams produced largely consistent results pertaining to the categories of independent variables that affected outsourcing decisions and outcomes. To investigate the most current research findings on business services, which comprise ITO and BPO, and to compare the results with the prior JIT reviews, we replicated the method used in the prior JIT reviews. In this update, we examined 174 newly published articles across 78 academic journals published between 2010 and 2014. We found that researchers have significantly expanded the variables of interest in the last 4 years. In all, researchers investigated 69 new variables. Compared with earlier research, this review of recent articles found a deeper exploration of the direct effects of transaction attributes, sourcing motivations, client and provider capabilities, and governance on sourcing decisions and outcomes. Researchers have also studied a broader variety of sourcing decisions, including shared services, captive centers, rural sourcing and backsourcing. This update also found a more nuanced understanding of relational governance and its interaction with contractual governance. We assessed the research progress that has been made on ten previously identified gaps in knowledge. We proposed a future research agenda that includes continued, incremental progress on ‘normal science’ research questions, as well as more ambitious research goals. We challenged researchers to investigate how sourcing clients, providers, and advisors can protect jobs, protect the environment, and ensure security in an increasingly automated world.
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Notes
From ‘Roundup of Cloud Computing’ on http://www.forbes.com/sites/louiscolumbus/2015/01/24/roundup-of-cloud-computing-forecasts-and-market-estimates-2015/.
2015 Verizon Data Breach Investigations Report, http://www.verizonenterprise.com/DBIR/2015/.
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*Willcocks, L.P. and Griffiths, C. (2010). The Crucial Role of Middle Management in Outsourcing, MIS Quarterly Executive 9(3): 177–193.
Willcocks, L., Hindle, J., Feeny, D. and Lacity, M. (2004). Information Technology and Business Process Outsourcing: The knowledge potential, Journal of Information Systems Management 21(3): 7–15.
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Wullenweber, K., Beimborn, D., Weitzel, T. and Konig, W. (2008). The Impact of Process Standardization on Business Process Outsourcing Success, Information Systems Frontiers 10(2): 211–224.
*Zimmermann, A. and Ravishankar, M.N. (2014). Knowledge Transfer in IT Offshoring Relationships: The roles of social capital, efficacy and outcome expectations, Information Systems Journal 24(2): 167–202.
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Appendices
Appendix A
Master codes
* Indicates a new variable that was not coded before in Lacity et al. (2010) or Lacity et al. (2011).
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1
Absorptive capacity – Client: A client organization’s ability to scan, acquire, assimilate, and exploit valuable knowledge (e.g., Grimpe and Kaiser, 2010; Reitzig and Wagner, 2010).
-
2
Absorptive capacity – Provider: A provider organization’s ability to scan, acquire, assimilate, and exploit valuable knowledge (e.g., Luo et al., 2010). (Previously called ‘Absorptive Capacity – Supplier’ in Lacity et al., 2011.)
-
3
Access to expertise/skills: A client organization’s desire or need to access provider skills/expertise (e.g., Currie et al., 2008; Lam and Chua, 2009).
-
4
Access to global markets: A client organization’s desire or need to gain access to global markets by outsourcing to providers in those markets (e.g., Gorp et al., 2007).
-
5
Adaptability: The extent to which a party is able to adapt a business service to meet changes in the environment (e.g., Sia et al., 2008).
-
6
*Adherence to environmental standards: The degree to which an organization has embraced or been certified as following ecological standards such as ISO 26000, Carbon Disclosure Project, UN Global Compact (e.g., Babin and Nicholoson, 2011).
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7
*Asset complementarity: The degree to which a set of assets are uniquely complementary (e.g., Argyres and Zenger, 2012)
-
8
Asset Specificity: The degree to which an asset can be redeployed to alternative uses and by alternative users without sacrifice of productive value (Williamson, 1976; Sia et al., 2008).
-
9
Asset Specificity – Human: The degree to which a human asset can be redeployed to alternative uses and by alternative users without sacrifice of productive value (e.g., Alvarez-Suescun, 2010).
-
10
Asset Specificity – Physical: The degree to which a physical asset can be redeployed to alternative uses and by alternative users without sacrifice of productive value (e.g., Alvarez-Suescun, 2010).
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11
*Boundary Spanning Capability – Client: A client firm’s external BPs that bridge the internal and external boundaries. That is client firm processes that ease the organizational and national boundaries between clients and service providers (e.g., Du and Pan, 2013)
-
12
*Boundary Spanning Capability – Provider: A service provider firm’s external BPs that bridge the internal and external boundaries. That is provider firm processes that ease the organizational and national boundaries between clients and service providers (e.g., Du and Pan, 2013).
-
13
Business Service Management Capability – Client: The ability of a client organization to efficiently and effectively manage a BP/service using in-house resources (e.g., McIvor et al., 2009). (Previously called ‘Business Process Management Capability – Client’ in Lacity et al., 2011.)
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14
Business Service Management Capability – Provider: The ability of a provider organization to efficiently and effectively manage a BP/service (e.g. Saxena and Bharadwaj, 2009). (Previously called ‘Business Process Management Capability – Supplier’ in Lacity et al., 2011.)
-
15
Business Strategic Type: An organization’s strategy to address three fundamental business problems – entrepreneurial, engineering, and administrative. Categorized under the Miles and Snow typology as Defenders, Prospectors, Analyzers, and Reactors (Miles and Snow, 1978; Shih et al., 2005; Kenyon and Meixell, 2011.)
-
16
Career Development of Employees: A client organization’s desire or need to provide better career opportunities for employees (e.g., Lacity et al., 2004).
-
17
Centralization: The degree to which an organization’s resources, services or decision making are concentrated within a particular group or location (e.g., Delmotte and Sels, 2008). (Previously called ‘Centralization of Department’ in Lacity et al., 2011.)
-
18
Change Catalyst: A client organization’s desire or need to bring about large scale changes in the organization (e.g., Gospel and Sako, 2010).
-
19
Change Management Capability – Client: The extent to which a client organization effectively manages change (e.g., Lacity et al., 2004). (Previously called ‘Change Management Capability’ in Lacity et al., 2011.)
-
20
*Change Management Capability – Provider: The extent to which a provider organization effectively manages change (e.g., Lacity et al., 2011).
-
21
*CIO Power: The level of influence of the head of the IT function (e.g., Chakrabarty and Whitten, 2011; Gefen et al., 2011).
-
22
Client – Provider Alignment: The degree to which client and provider incentives, motives, interests, and or goals are aligned (e.g., Sen and Shiel, 2006). (Previously called ‘Client–Supplier Alignment’ in Lacity et al., 2011.)
-
23
Client–Provider Interface Design: The planned structure on where, when, and how client and provider employees work, interact, and communicate (e.g., Sen and Shiel, 2006). (Previously called ‘Client–Supplier Interface Design’ in Lacity et al., 2010.)
-
24
Client Age: The age of a client organization in years (e.g., Delmotte and Sels, 2008).
-
25
*Client Business Change: The degree to which the client’s business structure or leadership change through mergers, acquisitions, divestitures, and/or C-suite turnover (e.g., Mathew and Das Aundhe, 2011).
-
26
Client Experience with Outsourcing: The situation in which the client has prior outsourcing experience (e.g., Alvarez-Suescun, 2010).
-
27
Client Management Capability: The extent to which a provider organization is able to effectively manage client relationships (e.g., Howells et al., 2008).
-
28
Client Outsourcing Readiness: The extent to which a client organization is prepared to engage an outsourcing provider by having realistic expectations and a clear understanding of internal costs and services compared with outsourced costs and services (e.g., McIvor et al., 2009).
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29
*Client Power: The degree of power the client has over the provider, measured as a percentage of the provider’s revenues (e.g., Susarla et al., 2010b).
-
30
*Client Prestige: The degree to which a client is widely regarded and respected (e.g., Handley and Benton, 2012).
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31
Client Size: The size of a client organization usually measured as total assets, sales, and/or number of employees (e.g., Handley and Benton, 2012).
-
32
*Client Size – Department: The size of a client’s department or function considering outsourcing, usually measured as total assets, sales, and/or number of employees in that department (e.g., Chakrabarty and Whitten, 2011).
-
33
Client-Specific Knowledge Required: The degree to which a unit of work requires a significant amount of understanding/knowledge about unique client systems, processes, or procedures (e.g., McKenna and Walker, 2008).
-
34
*Client–Provider Coordination Processes: The extent to which coordination and communication processes are present between a provider and its client during project execution. These include aspects such as presence of provider liaisons, accurate and complete project documentation, project status reports, and issue remediation processes (e.g., Gopal et al., 2011).
-
35
Commitment: The degree to which partners pledge to continue the relationship (e.g., Levina and Su, 2008).
-
36
Communication: The degree to which parties are willing to openly discuss their expectations, directions for the future, their capabilities, and/or their strengths and weaknesses (e.g., Gainey and Klaas, 2003).
-
37
*Competition in Client Firm Environment: The presence of multiple, reputable, and trustworthy firms within a client’s industry (e.g., Mithas et al., 2013).
-
38
*Compliance: A client organization’s need to desire to improve compliance (e.g., Iveroth, 2010).
-
39
Concern for Security/Intellectual Property: A client organization’s concerns about security of information, transborder data flow issues, and protection of IP (e.g., Wullenweber et al., 2008).
-
40
Configurational Approach: The client firm matches multiple factors in configurations that maximize their chances of outsourcing success. For example, matching strategic intent with contractual governance, matching transaction attributes with contractual governance (e.g., Sen and Shiel, 2006; Saxena and Bharadwaj, 2009).
-
41
Conflict Resolution: The degree to which clients and providers quickly, fairly, and meaningfully resolve disputes (e.g., Wullenweber et al., 2008)
-
42
Conflict Resolution Approach: The type of approach used to handle a conflict between clients and providers. Types of approaches include integrating, accommodating, compromising, collaborative, and avoiding (e.g., Lacity and Willcocks, 2014).
-
43
Contract Detail: The number or degree of detailed clauses in the outsourcing contract, such as clauses that specify prices, service levels, key process indicators, benchmarking, warranties, and penalties for non-performance (e.g., Handley and Benton, 2009; Luo et al., 2010).
-
44
Contract Duration: The duration of the contract in terms of time (e.g., Willcocks et al., 2004).
-
45
Contract Flexibility: The degree to which a contract specifies contingencies and enables parties to change contractual terms (e.g., Sia et al., 2008).
-
46
Contract Management Capability – Client: The extent to which a client organization is able to effectively prepare, negotiate and manage contracts with providers, including the ability to track service levels and verify invoices (e.g., Sanders et al., 2007). (Previously called ‘Contract Management Capability’ in Lacity et al., 2011.)
-
47
*Contract Management Capability – Provider: The extent to which a provider organization is able to effectively prepare, negotiate, and manage contracts with clients (e.g., Agrawal et al., 2012).
-
48
Contract Size: The size of the outsourcing contract usually measured as the total value of the contract in monetary terms (e.g., Gewald and Gellrich, 2007).
-
49
Contract Type: A term denoting different forms of contracts used in outsourcing. Examples include customized, fixed-priced, time & materials, fee-for-service, gainsharing and partnership-based contracts (e.g., McFarlan and Nolan, 1995; Poppo and Zenger, 2002; Ross and Beath, 2006; Gopal and Koka, 2010).
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50
*Contractual Governance: A general term that captures the overall formal and legally binding written rules designed to influence inter-organizational behavior (e.g., Bachlechner et al., 2014).
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51
Control Mechanisms: Certain means or devices a controller uses to promote desired behavior by the controlee (e.g., Daityari et al., 2008).
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52
Convenience: A client organization’s desire to select a sourcing option based on ease of use, convenience, and less frustration (e.g., McKenna and Walker, 2008).
-
53
Cooperation: The degree to which client and provider employees are willing to work together in common pursuit (e.g., Wullenweber et al., 2008).
-
54
*Coopetition: The degree to which competitors cooperate (e.g., Wiener and Saunders, 2014).
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55
*Corporate Social Responsibility Capability – Client: A client organization’s ability to behave in a socially responsible way, such as promoting environmental responsibility, promoting fair labor practices, and engaging in philanthropy (e.g., Babin and Nicholson, 2011).
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56
Corporate Social Responsibility Capability – Provider: A provider organization’s ability to behave in a socially responsible way, such as promoting environmental responsibility, promoting fair labor practices, and engaging in philanthropy (e.g., Brown, 2008). (Previously called ‘Corporate Social Responsibility-Supplier’ in Lacity et al., 2011.)
-
57
Cost Reduction: A client organization’s need or desire to reduce costs of providing a service (e.g., Borman, 2006).
-
58
Country: The nationality of the client or provider organization (e.g., Reitzig and Wagner, 2010).
-
59
Country – Business Attractiveness: The degree to which a country is attractive to outsourcing clients or providers because of favorable business environmental factors such as economic stability, political stability, cultural compatibility, infrastructure quality, security of IP (e.g., Doh et al., 2009; Malos, 2010).
-
60
Country – Financial Attractiveness: The degree to which a country is attractive to outsourcing clients or providers because of favorable financial factors such as labor costs, taxes, regulatory, and other costs (e.g., Doh et al., 2009; Malos, 2010).
-
61
Country – Human Resource Attractiveness: The degree to which a country is attractive to outsourcing clients or providers because of favorable people skills and availability factors such as size of labor pool, education, language skills, experience, and attrition rates (e.g., Mehta et al., 2006; Malos, 2010)
-
62
*Country Selection: A client or provider’s decision to locate in a particular country (e.g., Massini et al., 2010).
-
63
*Country Size: The size of the country, typically measured by GDP, population, or services exports, and so on (e.g., Hahn et al., 2011).
-
64
Criticality of Service: The degree to which a client organization views the business service as a critical enabler of business success (e.g., Klaas et al., 2001; Wahrenburg et al., 2006). (Previously called ‘Critical Role of Business Process – Organization’ in Lacity et al., 2011.)
-
65
Cultural Distance: The extent to which the members of two distinct groups (such as client and provider organizations) differ on one or more cultural dimensions (e.g., Mehta et al., 2006).
-
66
Cultural Distance Management: The extent to which client and provider organizations understand, accept, and adapt to cultural differences (e.g., Tate et al., 2009).
-
67
Culture: Shared values, beliefs, practices, and assumptions that characterize a group (e.g., Rajeev and Vani, 2009).
-
68
*Degree of Internationalization – Client: The geographic reach of a client – local, regional, country, international or global (e.g., Whitaker et al., 2010).
-
69
*Degree of Internationalization – Provider: The geographic reach of a provider – local, regional, country, international or global (e.g., Cha and Quan, 2011).
-
70
Delivery Capability: A provider’s ability to deliver a contracted service on time, on budget, and with agreed upon service quality (e.g., Howells et al., 2008).
-
71
Department Performance: CXO’s, CEO’s, or organizational members’ perceptions of the function’s performance or competence (e.g., Klaas et al., 2001).
-
72
Department Power: The level of influence of the department on the organization (e.g., Dunbar and Phillips, 2001).
-
73
Department Size: The size of a department or business function usually measured as number of employees (e.g., Calantone and Stanko, 2007)
-
74
Domain Understanding: The extent to which a provider has prior experience and/or understanding of the client organization’s business and technical contexts, processes, practices, and requirements (e.g., Luo et al., 2010).
-
75
Evaluation Process – Client Assessment: The client organization’s process for evaluating its own services to determine which are critical or outsourcing ready (e.g., Handley, 2012). (Previously called ‘Evaluation Process’ in Lacity et al., 2011.)
-
76
Evaluation Process – Provider Selection: The client organization’s process for evaluating and selecting providers (e.g., Handley and Benton, 2009). (Previously called ‘Evaluation Process’ in Lacity et al., 2011.)
-
77
External Production Cost Advantage: The degree to which a provider is perceived to have an advantage over a client organization in production cost economies (e.g., Williamson, 1991; Rajeev and Vani, 2009).
-
78
Fear of Losing Control: A client organization’s concerns that outsourcing may result in loss of control over the service (e.g., Lewin and Peeters, 2006; Sanders et al., 2007).
-
79
*Firm Ownership Structure – Client: The client’s ownership structure: private, public, jointly owned with primary provider (e.g., Rai et al., 2012).
-
80
Firm Ownership Structure – Provider: The provider’s ownership structure: private, public, jointly owned with primary client (e.g., Jayaraman et al., 2013). (Previously called ‘Supplier Ownership’ in Lacity et al., 2011).
-
81
Flexibility Enablement: A client organization’s desire or need to increase the flexibility of the use and allocation of resources (e.g., Tate and Ellram, 2009).
-
82
Focus on Core Capabilities: A client organization’s desire or need to outsource in order to focus on its core capabilities (e.g., Carey et al., 2006; Gewald and Dibbern, 2009).
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83
*Functional Spend: The annual operating budget for a function or department (e.g., Kobelsky and Robinson, 2010).
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84
Geographic Distance: The physical distance between two locations (e.g., Doh et al., 2009).
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85
Human Resource Management Capability – Client: A client organization’s ability to identify, acquire, develop, retain, and deploy human resources to achieve its organizational objectives (e.g., Klaas et al., 2001).
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86
Human Resource Management Capability – Provider: A provider organization’s ability to identify, acquire, develop, retain, and deploy human resources to achieve both provider’s and client’s organizational objectives (e.g., Kuruvilla and Ranganathan, 2010).
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87
Industry: The primary industry classification of a client organization. Common classifications include service vs manufacturing, SIC codes, and so on (e.g., Bardhan et al., 2007; Mani et al., 2010).
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88
Industry Growth: The increase or decrease in the size of a market (e.g., Budhwar et al., 2006).
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89
Influences – Coercive: Influences that result from both formal and informal pressures exerted on an organization by other organizations upon which they are dependent (e.g., DiMaggio and Powell, 1991; Bignoux, 2011).
-
90
Influences – External and Internal: The combination of external media, provider pressure, and internal communications at the personal level among managers of companies (e.g., Borman, 2006).
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91
Influences – Mimetic: Influences that arise from the perception that peer organizations are more successful; by modeling themselves based on peer organizations, the mimicking organization aims to achieve similar results (e.g., Klaas et al., 2001).
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92
*Information Asymmetry: The degree to which one party has information that is unknown to another party in a transaction (e.g., Devos et al., 2012).
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93
*Information Quality: The degree to which information fits its intended use and is accurate, relevant, timely, and complete (e.g., Bustinza et al., 2010).
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94
Innovation: A client organization’s desire or need to use sourcing as an engine for innovation (e.g., Ciravegna and Maielli, 2011).
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95
Innovation Effects: The extent to which outsourcing positively effects a client’s innovation, such as the effects on the number of patents filed or granted (e.g., Grimpe and Kaiser, 2010).
-
96
*Innovativeness – Client: The degree to which a client introduces new technologies, processes, services, and methods in their own organization (e.g., Weigelt and Sarkar, 2012).
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97
*Innovativeness – Provider: The degree to which a provider introduces new technologies, processes, services, and methods in their own organization and/or the client’s organization (e.g., Jean et al., 2010).
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98
Key Performance Indicators: A set of measures to assess performance (e.g., De Toni et al., 2007; Mahmoodzadeh et al., 2009).
-
99
*Knowledge Formalization: The degree to which clients and providers can formalize/codify requirements (e.g., Aubert et al., 2011).
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100
Knowledge Required: The degree to which a unit of work requires a significant amount of understanding/knowledge about unique, specialized, or advanced content (e.g., Lam and Chua, 2009).
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101
Knowledge Sharing: The degree to which clients and providers share and transfer knowledge (e.g., Mahmoodzadeh et al., 2009) (Previously called ‘Effective Knowledge sharing in Lacity et al., 2011).
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102
Legal and Political Uncertainties: The extent to which a location’s legal and political environments are uncertain, unstable, or unfamiliar (e.g., Currie et al., 2008; Penfold, 2009).
-
103
Length of Relationship: The number of years a client and a provider organization has worked together (e.g., Gainey and Klaas, 2003).
-
104
Loss of Control: The degree to which a client loses control over a business service after outsourcing (e.g., Sanders et al., 2007).
-
105
*Loss of Knowledge: The degree to which a client loses knowledge about a business service after outsourcing (e.g., Kien et al., 2010).
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106
Measurement Difficulty: The degree of difficulty in measuring performance of exchange partners in circumstances of joint effort, soft outcomes, and/or ambiguous links between effort and performance (e.g., Tate and Ellram, 2009).
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107
Middle Management Commitment/Support: The extent to which middle managers provide leadership, support, and commitment to outsourcing (e.g., Levina and Su, 2008).
-
108
*Mutual Agreement: The degree of agreement about behaviors, goals, obligations, and policies among partners (e.g., Lioliou et al., 2014).
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109
Mutual Dependency: The degree to which a client and a provider depends upon one another (e.g., Baraldi et al., 2014).
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110
Mutual Understanding: The degree of understanding of behaviors, goals, and policies among partners (e.g., Sen and Shiel, 2006).
-
111
Opportunism: ‘Self-interest seeking with guile’ or ‘Making of false or empty, that is self-disbelieved, threats and promises’ (Williamson, 1976, 1991; Tate and Ellram, 2009).
-
112
*Organizational Boundaries: The demarcation between the organization and its environment; in outsourcing, the demarcation between the client and provider organizations (e.g., Baraldi et al., 2014).
-
113
*Organizational Learning: The degree to which organizations learn, often associated with the organization’s commitment to learn, open-mindedness and shared vision (e.g., Malik et al., 2012).
-
114
*Outsourcing Decision – Backsourcing: A client organization’s decision to bring a previously outsourced service back in-house (e.g. Veltri et al., 2008).
-
115
*Outsourcing Decision – Bundled Services: A client organization’s decision to procure multiple services from the same provider, especially as it relates to the decision to deepen an existing provider relationship (e.g., Su and Levina, 2011).
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116
*Outsourcing Decision – Captive: A client organization’s decision to operate a captive center in a non-domestic location (e.g., Massini et al, 2010).
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117
*Outsourcing Decision – Commercial Enterprise: A client organization’s decision to create a new commercial entity to provide outsourcing services to both internal and external customers (e.g., Freytag et al., 2012).
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118
Outsourcing Decision – Degree of Outsourcing: The amount of outsourcing as indicated by percentage of budget outsourced and/or type and number of business services outsourced (e.g., Gilley et al., 2004; Salimath et al., 2008).
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119
Outsourcing Decision – Degree of Outsourcing – Offshore: The amount of offshore outsourcing as indicated by percentage of budget outsourced and/or type and number of business services outsourced (e.g., Khan and Lacity, 2012).
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120
*Outsourcing Decision – Domestic: A client organization’s decision to engage a domestic provider (e.g., Pearce, 2014).
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121
*Outsourcing Decision – Impact Sourcing: Hiring marginalized individuals (i.e., people who normally would have few opportunities for good employment) to provide IT, BP or other digitally enabled services (e.g., Lacity et al., 2014).
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122
Outsourcing Decision – Make or Buy: The fundamental make or buy decision (e.g., Williamson, 1991) in which a client organization decides to keep a business service in-house or decides to engage an outsourcing provider, measured as a binary variable (e.g., Lee and Kim, 2010).
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123
Outsourcing Decision – Multisourcing: A client organization’s decision to engage multiple service providers (e.g., Sia et al., 2008), primarily aiming for breath of providers (e.g., Su and Levina, 2011).
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124
Outsourcing Decision – Offshore: A client organization’s decision to engage an offshore provider (e.g., Fifarek et al., 2008; Lee and Kim, 2010).
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125
*Outsourcing Decision – Offshore – County: A client’s decision to select this country as an offshore outsourcing destination; a country’s location attractiveness to outsourcing clients in other countries (e.g., Datta and Bhattacharya, 2012).
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126
Outsourcing Decision – Provider Selection: A client organization’s reason(s) for selecting a particular provider (e.g., Howells et al., 2008). (Previously called ‘Outsourcing Decision – Supplier Selection’ in Lacity et al., 2011.)
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127
Outsourcing Decision – Renewal: The client’s decision to extend or renew an existing outsourcing contract (e.g., Bharadwaj et al., 2010).
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128
*Outsourcing Decision – Rural: A client organization’s decision to engage a rural-based provider (e.g., Lacity et al., 2010).
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129
*Outsourcing Decision – Shared Services: The client’s decision to share services across business divisions (e.g., Sako, 2010).
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130
*Outsourcing Decision – Switch Providers: A client organization’s decision to switch outsourcing providers (e.g., Freytag et al., 2012).
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131
*Outsourcing Outcomes – Backsourcing: The degree to which a client organization reports successful backsourcing of a business or IT service (e.g., Bhagwatwar et al., 2011).
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132
*Outsourcing Outcomes – Captive: The degree to which a client organization reports that the captive center is successful (e.g., Prikladnicki and Audy, 2012).
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133
Outsourcing Outcomes – Organizational Business Performance – Client: The degree to which a client organization achieved organizational-level business performance improvements, as a result of an outsourcing decision, such as stock price performance, revenue growth, return on assets, expenses, or profits (e.g., Reitzig and Wagner, 2010).
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134
Outsourcing Outcomes – Organizational Business Performance – Provider: The degree to which a provider organization achieved organizational-level business performance improvements, as a result of an outsourcing decision, such as stock price performance, return on assets, expenses, or profits (e.g., Rajeev and Vani, 2009).
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135
Outsourcing Outcomes – Performance Improvements: The degree to which a client organization reports business service improvements, as a consequence of outsourcing, such as reports of costs savings realized, better quality of services, better compliance, or tighter security (e.g., Mani et al., 2010). (Previously called ‘Outsourcing Outcomes – Process Performance Improvements’ in Lacity et al., 2011.)
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136
Outsourcing Outcomes – Performance Improvements – Offshore: The degree to which a client organization reports business service improvements as a consequence of offshore outsourcing, such as reports of costs savings realized or better quality of services (e.g., Levina and Su, 2008). (Previously called ‘Outsourcing Outcomes – Process Performance Improvements – Offshore’ in Lacity et al., 2011.)
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137
Outsourcing Outcomes – Project Performance: The degree to which a project is delivered on time, within budget, and meets requirements (e.g., Palvia et al., 2010).
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138
Outsourcing Outcomes – Project Performance – Offshore: The degree to which an offshored project is delivered on time, within budget, and meets requirements (e.g. Tate and Ellram, 2012).
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139
Outsourcing Outcomes – Success – Client: A client organization’s general perceptions of success and satisfaction with outsourcing (e.g., Sia et al., 2008). (Previously called ‘Outsourcing Outcomes – Success’ in Lacity et al., 2011.)
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140
Outsourcing Outcomes – Success – Offshore: A client organization’s general perceptions of success and satisfaction with offshore outsourcing (e.g., Vivek et al., 2008).
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141
*Outsourcing Outcomes – Success – Provider: A provider organization’s general perceptions of success and satisfaction with outsourcing/offshoring (e.g. Palvia et al., 2011).
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142
*Outsourcing Outcomes – Success – Shared Services: A client organization’s general perceptions of success and satisfaction with shared services (e.g., Iveroth, 2010).
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143
*Outsourcing Outcomes – Switch Providers: A client organization’s report on the extent of success after switching service providers (e.g., Wiener and Saunders, 2014).
-
144
Partnership View: A client organization’s consideration of providers as trusted partners rather than as opportunistic vendors (e.g., Willcocks et al., 2004; Sen and Shiel, 2006).
-
145
Political Reasons/Influences: A client stakeholder’s desire or need to use a sourcing decision to promote personal agendas (e.g., Maelah et al., 2010).
-
146
*Practical Intelligence: An individual’s ability to resolve project-related work problems that are unexpected, difficult, and cannot be resolved using established processes and frameworks (e.g., Langer et al., 2014).
-
147
Prior Client/Provider Working Relationship: The situation in which the client and provider organizations have worked together in the past (e.g., Mani et al., 2010). (Previously called ‘Prior Client/Supplier Working Relationship’ in Lacity et al., 2011.)
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148
Prior Firm Performance – Client: Client firm performance usually measured as net profits, return on assets, expenses, earnings per share, number of patents, and/or stock price prior to an outsourcing decision. (e.g., Dunbar and Phillips, 2001; Gilley et al., 2004).
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149
Prior Firm Performance – Provider: Provider firm performance usually measured as net profits, return on assets, expenses, earnings per share, and/or stock price prior to an outsourcing contract. (e.g., Gewald and Gellrich, 2007; Nadkarni and Herrmann, 2010). (Previously called ‘Prior Firm Performance – Supplier’ in Lacity et al., 2011.)
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Product Quality: The quality of the end product delivered as part of an outsourcing/offshoring arrangement (e.g. Whitten and Leidner, 2006).
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Project Duration: The duration of the project in terms of time (e.g., Ramchandran and Gopal, 2010).
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*Project Management Capability – Client: The ability of retained teams within client organizations to internally manage and coordinate project activities related to planning, execution, and feedback for an outsourced project (e.g., Gopal et al., 2011).
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*Project Management Capability – Provider: The ability of delivery teams within provider organizations to internally manage and coordinate project activities related to planning, execution, and feedback for an outsourced project (e.g., Gopal et al., 2011).
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Project Scoping Accuracy – Provider: A provider firm capability to estimate the contract scope accurately (not underbid or overbid) (e.g., Koh et al., 2004). (Previously called ‘Project Scoping Accuracy’ in Lacity et al., 2010.)
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*Project Size: The size of a project, usually measured as number of people or effort (e.g., Langer et al., 2014).
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*Provider Breadth of Service: The degree to which providers offer a wide variety of services (e.g., Gao et al., 2010).
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Provider Capabilities: a broad term that captures the overall level of a provider’s abilities (e.g., Su and Levina, 2011). (Previously called ‘Supplier’s Core Competences’ in Lacity et al., 2010.)
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Provider Competition: The presence of multiple, reputable and trustworthy service providers which can provide a range of choices for the clients (e.g., Levina and Su, 2008). (Previously called ‘Supplier Competition’ in Lacity et al., 2011.)
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Provider Dependency: The degree to which a client depends on a provider (e.g., Borman, 2006). (Previously called ‘Supplier Dependency’ in Lacity et al., 2011.)
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*Provider Employee – Attitude: Attitude of employees toward their jobs or employers (e.g., Sarker et al., 2010).
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Provider Employee Performance: The client’s perception of the performance of individual provider employees (e.g., Daityari et al., 2008; Lam and Chua, 2009). (Previously called ‘Supplier Employee Performance’ in Lacity et al., 2011.)
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*Provider Employee Satisfaction: The degree to which provider employees are satisfied with their jobs and employers (e.g., Lacity et al., 2014).
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Provider Employee Turnover: The percentage of the workers that are replaced in a given time period, frequently measured as turnover intention (e.g., Budhwar et al., 2006) (Previously called ‘Supplier Employee Turnover’ in Lacity et al., 2011.)
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*Provider Employee Work Life Conflict: ‘The inter- (between) role conflict where the demands created by the job interfere with performing family-related responsibilities’(Netemeyer et al., 2004, p. 50, as cited in Sarker et al., 2010).
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Provider Firm Age: The age of a provider firm in years (e.g., Lahiri and Kedia, 2009). (Previously called ‘Supplier Age’ in Lacity et al., 2011.)
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Provider Management Capability: The extent to which a client organization is able to effectively manage outsourcing providers (e.g., Sanders et al., 2007). (Previously called ‘Supplier Management Capability’ in Lacity et al., 2011.)
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*Provider Power: The degree of power the provider has over the client (e.g., Barthélemy, 2011).
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Provider Reputation: The public’s perception of a provider’s capabilities based on past performance and financial status (e.g., Gewald and Gellrich, 2007). (Previously called ‘Supplier Reputation’ in Lacity et al., 2011.)
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Provider Size: The size of a provider organization usually measured as total assets, sales, and/or number of employees (e.g., Nadkarni and Herrmann, 2010). (Previously called ‘Supplier Size’ in Lacity et al., 2011.)
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Public Perceptions of Outsourcing: The degree to which the public has a negative perception of outsourcing or offshoring (e.g., Sen and Shiel, 2006).
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*Quality Improvement: A client organization’s desire or need to improve the quality of the client’s business, processes, or capabilities (e.g., Gewald and Dibbern, 2009).
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*Quality Management Capability – Provider: The degree to which a provider has a total quality management philosophy and a focus on continuous improvement (e.g., Malik et al., 2012).
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R&D Spend: The amount of money an organization spends on R&D (e.g., Calantone and Stanko, 2007; Grimpe and Kaiser, 2010).
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Rapid Delivery: A client organization’s desire or need to speed up service delivery (e.g., Bandyopadhyay and Hall, 2009; Lam and Chua, 2009).
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Relational Governance: The unwritten, worker-based mechanisms designed to influence inter-organizational behavior (Macneil, 1980; Kim, 2008).
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Relationship Quality: The quality of the relationship between a client and provider (e.g., Sia et al, 2008; Saxena and Bharadwaj, 2009).
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Relationship-Specific Investment: Specific investments made over time which discourage opportunism, reinforce signals of the client firms, and create extendedness of the relationships (e.g., Tate and Ellram, 2009).
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Risk: The extent to which a transaction exposes a party (client or provider) to a chance of loss or damage (e.g., Wullenweber et al., 2008; Mathew and Das Aundhe, 2011).
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Risk Management Capability – Client: A client organization’s practice of identifying, rating, and mitigating potential risks associated with outsourcing (e.g., Borman, 2006).
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*Risk Spread: The distribution of risk, typically by assigning work to multiple providers and or locations (e.g., Su and Levina, 2011).
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Scalability: The ability to scale volume of service up or down based on demand (e.g., Currie et al., 2008; Redondo-Cano and Canet-Giner, 2010).
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*Security Breach: A significant incident that results in unauthorized access of data, applications, services, networks and/or devices or loss or theft of IP (e.g., Gorla and Lau, 2010).
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Security, Privacy, and Confidentiality Capability – Provider: The proven ability of a provider to protect client data through investments in technology, training, process controls, audits, and other management practices (e.g., Sen and Shiel, 2006). (Previously called ‘Security, Privacy, and Confidentiality Capability – Supplier’ in Lacity et al., 2011.)
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Senior Leadership: The extent to which the senior executives of an organization are effective leaders (e.g., Lacity et al., 2004).
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Service Complexity: The degree to which a service or project requires compound steps, the control of many variables, and/or where cause and effect are subtle and dynamic (e.g., Ventovuori and Lehtonen, 2006; Penfold, 2009). (Previously called ‘Process Complexity’ in Lacity et al., 2011.)
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Service Integration: The degree to which clients and providers are able to integrate services (e.g., Sen and Shiel, 2006). (Previously called ‘Process Integration’ in Lacity et al., 2011.)
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Service Interdependence: The level of integration and coupling among tasks; services that are highly integrated are tightly coupled and difficult to detach (e.g., Sanders et al., 2007). (Previously called ‘Process Interdependence’ in Lacity et al., 2011.)
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Service Quality: The quality of a service, frequently measured as a client’s perception of a satisfactory service performance by the provider (e.g., Lewin and Peeters, 2006).
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Service Standardization: The degree to which a service is standard (e.g., Tate and Ellram, 2009). (Previously called ‘Process Standardization’ in Lacity et al., 2011.)
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Slack Resources: Resources an organization possesses in excess of what is required to maintain the organization (e.g., Koh et al, 2004; Hall and Liedtka, 2005). (Previously called ‘Financial Slack’ in Lacity et al., 2010.)
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Social Capital – Cognitive Dimension: Social capital arising from the sharing representations, interpretations, and systems of meaning among parties (Nahapiet and Ghoshal, 1998; Willcocks et al., 2004).
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Social Capital – Relational Dimension: Social capital arising from personal relationships people have developed with each other through a history of interactions (Nahapiet and Ghoshal, 1998; Willcocks et al., 2004).
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Social Capital – Structural Dimension: Social capital arising from the patterns of linkages between people or units including network ties, network configuration, and network appropriability (Nahapiet and Ghoshal, 1998; Willcocks et al., 2004).
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Social Norms: An individual’s perceptions of the social pressures put on him or her to perform or not to perform the behavior in question. (Ajzen and Fishbein, 1980; Raman et al., 2007).
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*Staff Transfer: The practice of transferring staff from the client to provider organization (e.g., Miozzo and Grimshaw, 2011).
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Stakeholder Buy-in: Gaining commitment and support from all parties involved in sourcing-related decisions (e.g., Tate and Ellram, 2009).
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Strategic Intent: A client organization’s desire or need to source for strategic reasons, such as developing new capabilities that can be leveraged in the marketplace (e.g., Sanders et al., 2007).
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Switching Costs: The costs incurred when a client organization changes from one provider or marketplace to another (e.g., Wahrenburg et al., 2006).
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*Task Programmability: The degree to which appropriate behavior by the agent (provider) can be precisely defined in advance (Eisenhardt, 1989) (e.g., Susarla et al., 2010a, 2010b).
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*Task Variety: The degree to which a task requires various activities, skills, and talents (e.g., Sengupta and Gupta, 2011).
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*Team Dispersion: The degree to which a team is geographically dispersed; often measured as a percentage of teammates onshore/offshore (e.g., Langer et al., 2014).
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*Team Size: The number of individuals assigned to a team (e.g., Gopal and Koka, 2012).
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*Team Turnover: The extent to which team members leave a team (e.g., Narayanan et al., 2011).
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Technical and Methodological Capability – Client: A client organization’s level of maturity in terms of technical or process-related standards, and best practices (e.g., Bardhan et al., 2007).
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Technical and Methodological Capability – Provider: A provider organization’s level of maturity in terms of technical or process-related and best practices (e.g., Sia et al., 2008; Shah Bharadwaj and Saxena, 2009). (Previously called ‘Technical and Methodological Capability – Supplier’ in Lacity et al., 2011.)
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*Technology Infrastructure Quality – Provider: The degree to which the technology infrastructure the provider uses to support service delivery is nimble, scalable, and state-of-the-art (e.g., Kannabiran and Sankaran, 2011).
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*Technology Integration Imperative: A client organization’s need or desire to integrate technologies (e.g., Gefen et al., 2011).
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Technology Upgrade: A client organization’s need or desire to improve or upgrade technology (e.g., Bhagwatwar et al., 2011). (Previously called ‘Technical Reasons’ in Lacity et al., 2010).
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Time Zone Differences: The difference in local times between two locations as measured in hours (e.g., Mehta et al., 2006).
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Top Management Commitment/Support: The extent to which senior executives provide leadership, support, and commitment to outsourcing (e.g., Tate and Ellram, 2009).
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Training: The nature or extent of provider employee training by either the client or provider organization (e.g., Raman et al., 2007; Malik, 2009).
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Transaction Costs: The effort, time, and costs incurred in searching, creating, negotiating, monitoring, and administrating a service contract between buyers and providers (Williamson, 1991; Levina and Su, 2008).
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Transaction Frequency: The number of times a client organization initiates a transaction, typically categorized as either occasional or frequent (e.g., Wahrenburg et al., 2006).
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Transaction Size: The size of a transaction, often measured in terms of dollar value or effort (e.g., Luo et al., 2010).
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Transaction Type: The type of work, usually operationalized as a categorical variable, such as delineating among transactions involving development, maintenance, and reengineering work (e.g., Gopal and Koka, 2010) or between ITO and BPO (e,g., Lee and Kim, 2010).
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Transition Management Capability – Client: The extent to which a client organization effectively transitions services to or from outsourcing providers or integrates client services with provider services (e.g., Luo et al., 2010).
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Transition Management Capability – Provider: The extent to which a provider organization effectively transitions services from a client organization to the provider or integrates client services with provider services (e.g., Saxena and Bharadwaj, 2009). (Previously called ‘Transition Management Capability – Supplier’ in Lacity et al., 2011.)
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Trust: The confidence in the other party’s benevolence (e.g., Gainey and Klaas, 2003).
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Uncertainty: The degree of unpredictability or volatility of future states as it relates to the definition of requirements, emerging technologies, and/or environmental factors (Williamson, 1991; Mani et al., 2010).
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Lacity, M., Khan, S. & Yan, A. Review of the empirical business services sourcing literature: an update and future directions. J Inf Technol 31, 269–328 (2016). https://doi.org/10.1057/jit.2016.2
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DOI: https://doi.org/10.1057/jit.2016.2