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1. IS outsourcing management competence dimensions: instrument development and relationship exploration 報告者: 林韋成 指導:王育民教授

2. outline • Abstract • Introduction • Theoretical perspectives on IS outsourcing • Is outsourcing management competence dimensions and their relevance theoretical perspectives • Research methodology • Discussion • Conclusion

3. Abstract • Three theoretical perspectives were applied to explain the nature of the IS outsourcing phenomenon • Some measures were generated • Test proposed competences and measure

4. Introduction • IS outsourcing related costs, risks , andpitfalls. So firms need to have management ability to control them. • Firms should be able to accurately measure IS service performance both before they sign the contract and throughout the process.

5. Theoretical perspectives on outsourcing • An inter-organizational process based perspective • A knowledge management based perspective • An economics based perspective

6. An inter-organizational process based perspective • A model for a seller-buyer relationshipdevelopmental process consisting of four stage: awareness, exploration , expansion, commitment , and dissolution. by Dwyer et al

7. An inter-organizational process based perspective • The development and evolution of a cooperative IOR as consisting of a repetitive sequence of negotiation , commitment , and execution stages. By Ring and Van de Ven

8. A knowledge management based perspective • Integrate knowledge is insightful andmeaningful in post-industrial society. • Outsourcing is a part way of that firms assemble knowledge from suppliers.

9. An economics based perspective • Transaction costs economics - technological uncertainty - asset specificity • Agency theory - non-separability of performance among team members - task programmability

10. Is outsourcing management competence dimensions and their relevance theoretical perspectives • Informed buying • Contract facilitation • Contract monitoring • Vendor development

11. Informed buying and its relevance to theoretical perspectives • Analyzing the external IS service market • Selecting a sourcing strategy • Solve technology issues • Leading the tendering , contracting , andservices management processes. By Feeny and Willcocks

12. Contract facilitation, contract monitoring, and their relevance to theoretical perspectives • Contract facilitation is an action-oriented competence with a purpose to manage contract negotiation execution , and conflicts resolution. by Feeny and Willcocks

13. Contract facilitation, contract monitoring, and their relevance to theoretical perspectives • Effective contract monitoring means holding suppliers to account on bothexisting service contracts and developingperformance standards of the servicesmarket by Feeny and Willcocks

14. Their relevance to theoretical perspectives • Closely relate to negotiation , commitment and execution • Generate many opportunities • Establish a field for knowledge creation and integration

15. Vendor development and its relevance to theoretical perspectives • Organizations looking beyond existingcontractual arrangements to explore thelong-term potentials for suppliers to create win-win situations in which the supplier increases revenues by providing services that increase business benefits. By Feeny and Willcocks

16. Is outsourcing management competence dimensions and theoretical perspectives

17. Research methodology • Item generalization • Field interviews • Pretest • Pilot study • The large scale study • Convergent validity • Composite factor reliability • Discriminant validity • Predictive validity • Relationship exploration and empirical examination

18. Item generalization • Items were generated based on literature • Due attention was paid to content validity by making sure that measurement items covered the content domain of a theoretical construct.

19. Field interviews • Two directors and one quality director • 1h to over 2h • Measurement items were used to explainthe meaning of IS outsourcing at an operation level • The effectiveness and efficiency of the IS outsourcing services • the capability of the firm to absorb new technologies after outsourcing.

20. Pretest • A pretest was implemented to refine measurement items by presenting the questionnaire to two dissertation-stage Ph.D. candidates, two IS professors, one operation management professor, and one IS director.

21. Pilot study • Five hundred names were randomly selected from a name list provided • CITC was used to purify the measurement items, and Cronbach alpha was used to test the reliability of the measurement items • Items are deleted iteratively if their CITC scores were below 0.5. • A higher than 0.70 for alpha was also pursued in maintaining or deleting item

22. The large scale study • Two sets of surveys were administered in the US, each having several waves of surveys with 2 or 3 weeks • Three hundred phones calls were made to find why IS directors and managers had not responded • There were 82 useful responses from the first set of mailings and 123 from the second set of mailings • One hundred ninety eight were returned without responses. The effective response rate was thus 205/ (3425-198) = 6.35%.

23. The large scale study

24. The large scale study • that respondent bias did not exist in the data • Exploratory factor analysis (EFA) was applied to investigate the relationship between proposed measures and competence dimensions • Then confirmatory factor analysis (CFA) was applied to verify reliability and validity • EFA assumes that measurement tems’ errors are uncorrelated and it cannot test whether all these dimensions together form second-order factors • CFA takes item error correlations into consideration and thus may reveal more complex relationships embedded in the items.

25. Large study results • All the factor loadings are greater than 0.4, which are significant with a sample size around 200 • Kaiser–Meyer–Olkin (KMO) is 0.89, which is outstanding

26. Large study results

27. Large study results • After the exploratory factor analysis, the convergent validity of each dimension was going to be tested individually by checking their LISREL model fit indices and average variance explained (AVE) values. • Discirminant validity of all derived dimensions was tested by comparing two LISREL models.

28. Convergent validity • LISREL be used • AVE be measured the ratio between thevariance captured • All the AVEs are well above 0.5,

29. Convergent validity

30. Composite factor reliability

31. Discriminant validity • any two of the nine dimensions was tested by comparing the chi-square values of the original • all statistics demonstrate that discriminant validity were good for all pairs of dimensions

32. Predictive validity • If a construct has a significant relationship with a performance criterion, then it is said to have good predictive validity.

33. Predictive validity

34. Relationship exploration and empirical examination • Test of the co-variation model • Development of second order factors of IS outsourcing management competence • Relationships among second-order competence factors

35. Test of the co-variation model • The co-variation model fit indices, l values, T-values • all the l values are reasonably good and correlations among the nine dimensions were also significant

36. Test of the co-variation model

37. Test of the co-variation model

38. Development of second order factors of IS outsourcing management competence • Three second-order factors, informed buying, contract management, and relationship management • existing contract, efficient execution is the prerequisite for any degree of IS outsourcing success • IS outsourcing contract development and enhancement is inevitable

39. Relationships among second-ordercompetence factors • Informed buying is the knowledge basis for both generating a substantive guiding framework • Contract management provides the structure and process based on which IS vendor, user, and IS staff relationships are managed • establishing an appropriate social and intellectual atmosphere

41. An empirical test of the second-order factormodel • The existence of these second-order competence factors and their relationships were empirically tested using LISREL by checking the second-order model fit indices and the correlations among them. • there are three second-order IS outsourcing management competence factors and they have continuously interacting relationships.

42. An empirical test of the second-order factormodel

43. discussion • Contributions to research • Contributions to practitioners • Research limitations

44. Contributions to research • understanding of IS outsourcing phenomenon by applying inter-organizational process, knowledge management, and economic perspectives • Responding to a critique of its lack of operationalization

45. Contributions to practitioners • the development and empirical confirmation of IS outsourcing management competence dimensions and factors provide an overview of the different IS outsourcing management competences

46. Research limitations • the use of only one key informant in each responding organization • the low response rate, the fact that the demographics may influence the generalizability of the findings • respondents may be sensing the inherent constructs via the ordering of questionnaire items and they may respond accordingly

47. Conclusion • As IS outsourcing becomes more critical for both traditional industrial firms and new Internet players, firms need to understand IS outsourcing management competences and how to develop them.