• Asia pacific journal of information systems
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• v.17 no.3
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• pp.131-146
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• 2007

Recently, the role of IT service providers has been enlarged from managing a single function or system to reconstructing entire information management processes in new ways to contribute to shareholder value across the enterprise. This movement toward extensive and complex outsourcing agreements has been driven by the assumption that outsourcing information technology functions is a reliable approach to maximizing resource productivity. Hiring external IT service providers to manage part or all of its information-related services helps a firm focus on its core business and provides better services to its clients, thus obtaining sustainable competitive advantage. This practice of focusing on the strategic aspect of outsourcing is referred to as strategic sourcing where the focus is capability sourcing, not procurement. Given the importance of the strategic outsourcing, however, to our knowledge, there is little empirical research on the relationship between the strategic outsourcing orientation and outsourcing performance. Moreover, there is little research on the factor that makes the strategic outsourcing effective. This study is designed to investigate the relationship between strategic IT outsourcing orientation and IT outsourcing performance and the process through which strategic IT outsourcing orientation influences outsourcing performance, Based on the framework of strategic orientation-performance and core competence based management, this study first identifies core competency orientation as a proper strategic orientation pertinent to IT outsourcing and IT outsourcing process management capability as the mediator to affect IT outsourcing performance. The proposed research model is then tested with a sample of 200 firms. The findings of this study may contribute to the literature in two ways. First, it draws on the strategic orientation - performance framework in developing its research model so that it can provide a new perspective to the well studied phenomena. This perspective allows practitioners and researchers to look at outsourcing from an angle that emphasizes the strategic decision making to outsource its IT functions. Second, by separating the concept of strategic orientation and outsourcing process management capability, this study provides practices with insight into how the strategic orientation can work effectively to achieve an expected result. In addition, the current study provides a basis for future studies that examine the factors affecting IT outsourcing performance with more controllable factors such as IT outsourcing process management capability rather than external hard-to-control factors including trust and relationship management. This study investigates the major factors that determine IT outsourcing success. Based on strategic orientation and core competency theories, we develop the proposed research model to investigate the relationship between core competency orientation and IT outsourcing performance and the mediating role of IT outsourcing process management capability on IT outsourcing performance. The model consists of two independent variables (core-competency-orientation and IT outsourcing process management capability), and two dependent variables (outsourced task complexity and IT outsourcing performance). Comprehensive data collection was conducted through an outsourcing association. The survey data were analyzed using a structural analysis method. IT outsourcing process management capability was found to mediate the effect of core competency orientation on both outsourced task complexity and IT outsourcing performance. Further analysis and findings are discussed.

• Journal of the Korean Operations Research and Management Science Society
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• v.28 no.3
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• pp.149-168
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• 2003

With the increase of global competition and the reduction of the lifecycle of business process, most leading companies begin to adopt BPO(Business Process Outsourcing), by outsourcing the whole or part of their business process to external service providers and focusing on their core capability, in order to enhance their core competency, In adopting BPO, it is an important decision-making issue that which part of process should be outsourced. So identifying core/non-core process among the business processes is a prerequisite for managing corporate capability and performance of outsourcing. In this study, by focusing on knowledge intensity and degree of informatization of the business process that are important factors in adopting BPO, we have analyzed the current status of BPO adoption of domestic firms and proposed several guidelines for adopting BPO.

• Journal of the Korean Operations Research and Management Science Society
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• v.32 no.3
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• pp.97-114
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• 2007

IT outsourcing providers has been expanded from a single functional system to the entire IT service to gain sustainable competitiveness. This new trend of IT outsourcing need outsourcing management capability based on a firm's core capacity. Hiring external IT service providers to manage part or all of its information-related services helps a firm focus on its core business and provides better services to its clients, thus obtaining sustainable competitive advantage. This research investigates the major factors that determine the level of a particular firm's success at IT outsourcing. Based on process innovation and core-competency theories, we identify three significant components of a firm's IT outsourcing management method (ITOMM): level of core-competency-based management, maturity of outsourced tasks, and maturity of outsourcing management. Comprehensive data collection was conducted through an outsourcing association. The survey data were analyzed using a structural analysis method. Maturity of outsourced tasks and maturity of outsourcing management were found to affect project performance directly, while level of core-competency-based management only indirectly impacted project performance through its positive impact on the other two ITOMM components.

• Asia pacific journal of information systems
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• v.16 no.2
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• pp.85-110
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• 2006

The objective of this research is to identify the process of knowledge transfer and to examine the effect of IT human capability on knowledge transfer in information systems outsourcing. Through a field survey, it is found that clients' IT human capability significantly affects on cooperative learning with vendors and knowledge transfer from vendors to clients. The survey also shows that clients' trust with vendors indirectly enhances the knowledge transfer by increasing the cooperative learning. This study provides a solution of knowledge transfer problem in information systems outsourcing. Also it brings out issues that can be accrued in the outsourcing situation, such as clients' dependency on vendors and knowledge asymmetries developed in favor of the vendors. These issues should be topics for future research on information systems outsourcing.

• Information Systems Review
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• v.9 no.3
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• pp.67-82
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• 2007

The myth about BPO is: since firms do not want to continue to control the business process, they outsourced it to the external provider. Therefore, there is no need for controlling the outsourced process. Based on resource dependency theory, this study explores control mechanism used in BPO context. The overall approach of this study is qualitative, inductive and exploratory. First, a generic framework on the control structure is derived from extant literature, which includes outcome/process control, IS and social control. This framework is applied to a Korean BPO case. This study has found that the hybrid control structure consisting of behavior, outcome and social control mechanisms are effective for BPO success. As outsourcing grows rapidly and IS functions become smaller, the business struggles to redefine its IS capability. This research proposes setting up proper control mechanism between user and BPO service provider as new IS capability that business should focus on; and provides guidelines for managers in development of new IS capability.

• 한국경영정보학회:학술대회논문집
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• 2007.06a
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• pp.198-204
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• 2007

본 연구는 핵심역량 지향성을 중심으로 고찰한 IT 아웃소싱 성공요인 및 결과에 관한 것으로, 아웃소싱 프로세스 관리역량과 기업의 핵심역량 지향성이 IT 아웃소싱된 업무 복잡도와 아웃소싱 성과에 영향을 미치는 지, 그리고 아웃소싱 프로세스 관리역량이 기업의 핵심역량 지향성과 아웃소싱 성과의 관계를 매개하는 효과가 있는지에 대한 실증 연구이다. 따라서 본 연구는 독립변수로 핵심역량 지향성과 종속변수로 아웃소싱된 업무 복잡도 그리고 매개변수로 아웃소싱 프로세스 관리역량을 사용하였다. 국내 IT 아웃소싱 협회에 등록된 회사의 IT 부서를 대상으로 200 개의 데이터를 확보하였고 공분산 구조방정식 모델로 분석하였다. 연구결과, IT 아웃소싱 프로세스 관리역량은 핵심역량 지향성이 아웃소싱된 업무 복잡도와 아웃소싱 성과에 미치는 영향을 매개하는 것으로 밝혀졌다. 그리고 핵심역량 지향성은 아웃소싱의 성과에 긍정적인 영향을 미치지만 아웃소싱된 업무 복잡도엔 유의한 영향을 미치지 않는 것으로 나타났다.