• Title/Summary/Keyword: Outsourcing and Innovation

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The Impact of Outsourcing Strategy on a Firm's Innovation and Internationalization

  • SAMSON, Kouame Kouakou;LEE, Youngwoo
    • East Asian Journal of Business Economics (EAJBE)
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    • v.7 no.4
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    • pp.1-13
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    • 2019
  • Purpose - Based on transaction cost perspective and institution-based perspective, this research attempts to investigate the effect of outsourcing on a firm's performance and how it interacts with institutional context in which the firms operate. Research design, data, and methodology -With a sample of 164 manufacturing firms form South Korea, we examine the direct effects of outsourcing on the a firm's level of product innovation and internationalization and the moderating effects of competitive pressure and property right protection as important external factors that could affect the effectiveness of outsourcing decision. Result - The findings show that outsourcing not only enhance a firm's capability to concentrate on its core competencies, but also to increase a firm's combinative capacity to acquire external knowledge. Furthermore, we finds that in a highly competitive environment, potential knowledge spillovers to other competitors may attenuate the potential benefits of outsourcing. Conclusion - Outsourcing can enhance a firm's innovation activities by providing valuable access to external knowledge and also to complementary resources from the external partners, which in turn enables firms to focus on core competences.

Outsourcing as a Modern Form of International Labor Division

  • Kiptenko, Viktoriia;Razumova, Oleksandra;Boriushkina, Oksana;Romanova, Vera;Negoda, Anna
    • International Journal of Computer Science & Network Security
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    • v.21 no.8
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    • pp.43-50
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    • 2021
  • For the implementation of innovative products or services companies use different innovation strategies, in particular, outsourcing is quite widespread, given the high level of specialization and professionalism of companies that provide such services. The aim of this article was to evaluate the link between outsourcing of innovative activities and indicators of companies' efficiency. The methodology of the research includes the methods of correlation analysis and regression analysis to reveal the correlation between the use of outsourcing of innovative products and services and the turnover of the EU enterprises. The results show a high level of innovative activity of EU enterprises (50.3% innovatively active). Innovative business processes are the most widespread form of innovation activity (41% of enterprises implement business processes, and the indicator is higher than 41% in the most developed EU countries). The turnover of enterprises with new or substantially improved products was found to grow by 10.92% for the period 2016-2018. The correlation analysis shows weak direct links between the indicator of turnover growth and the number of enterprises that have independently implemented innovations, or have implemented innovations jointly with third-party companies, or using outsourcing services. The highest level of direct connection was found between the growth of turnover of enterprises that launched a new product for the market and the growth of the number of enterprises that implemented innovations with the involvement of organizations (correlation 0.273). Based on the regression analysis it was found that with a 1% change in the growth rate of the number of innovation-active enterprises, the growth rate of turnover from new or improved products increased by 5.67%. At the same time, with a 1% change in the growth rate of the number of enterprises that implement innovation through outsourcing, the growth rate of turnover from new or improved products will increase by 7.15%.

Does the Understanding of Core Competencies Matter to IT Outsourcing Performance? (기업의 핵심역량이 IT 아웃소싱 성과에 직접적인 관련이 있을 것인가?)

  • Kim, Young-Jin;Nam, Ki-Chan;Koo, Chul-Mo
    • 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.

Development of the Evaluation Framework for the Risk Management of Information Systems Outsourcing : Focusing on Nonprofit Organizations (정보시스템 아웃소싱 위험요인 평가 프레임?의 개발: 비영리 조직을 중심으로)

  • Kim Chang-Su;Baek Myeung-Kee
    • The Journal of Information Systems
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    • v.13 no.1
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    • pp.39-57
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    • 2004
  • As a result of the fast development of Information communication technology, the competitive advantage of companies and the service quality of nonprofit organizations has been largely changed. Corresponding to this kind of change, companies have tried to make production improvement, competitive strengthening, and organizational innovation. Meanwhile, the nonprofit organizations directed by the government are pursuing the service innovation from general administration area to the public service for civilians. In relation to this, risk management of the company's information systems outsourcing has largely been studied until now. However, the study of risk management for nonprofit organization information systems outsourcing has rarely been made. In this paper, to provide the theoretical base for further research, we have attempted to develop the evaluation framework for risk management of information systems outsourcing considering the characteristics of nonprofit organizations.

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An Exploratory Study on the Relationship between Outsourcing Performance Factors and IT Outsourcing Recontracts (정보기술 아웃소싱 성과요인과 재계약의 관계에 관한 탐색적 연구)

  • Yang, Kyung-Sik;Kim, Hyun-Soo
    • Journal of Information Technology Services
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    • v.2 no.1
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    • pp.157-172
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    • 2003
  • Despite the continual growth of IT outsourcing market, the outsourcing contracts are mostly short-term contracts. Because these short-term contracts need continual recontracts, the research on the factors that influence the outsourcing recontracts is needed. This research has been done to find out the factors of making the outsourcing recontracts successfully by stating the relationship between outsourcing recontract and the outsourcing performance factors. As a result of this research, customer factors and innovation factors are found to be influential factors on whether you make a recontract or not. And also the research have showed customer factors are major decision criteria on outsourcing recontracts.

A Case Study on IT Service Innovation through Improvement of Outsourcing Contract Structures for Information System Operations (정보시스템 운영 아웃소싱 계약구조 개선 기반의 IT서비스 혁신 추진에 관한 사례 연구)

  • Kim, Hee-Sun;Choi, Kwang-Mook
    • Informatization Policy
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    • v.31 no.3
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    • pp.88-105
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    • 2024
  • Many companies are adopting Information System (IS) operation outsourcing to focus on their core competencies and enhance operational efficiency. However, most of them employ a headcount-based pricing model, which often leads to exhaustive negotiations over contract costs without objective criteria or systematic frameworks. This headcount-based outsourcing contract environment results in low motivation/incentives for both client companies and IT service providers to improve productivity, efficiency, and quality, which poses challenges in securing a competitive advantage. This study introduces the development process of an IS operation outsourcing pricing model, which was collaboratively developed and agreed upon for implementation in actual contracts by an IT service company of a conglomerate. Also, the study underscores the activities undertaken to secure IT service competitiveness based on this model so as to deliver a practical guide for companies seeking to transition their outsourcing contract methods.

R&D Service Industry Innovation Plan to Improve R&D Productivity and Vitalize Technology Innovation Ecosystem (R&D 생산성 제고와 기술 혁신 생태계 활성화를 위한 연구 서비스산업 혁신 방안)

  • Pyoung Yol Jang
    • Journal of Service Research and Studies
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    • v.13 no.1
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    • pp.144-158
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    • 2023
  • R&D (Research and Development) investment by companies and the government continues to increase, and the total R&D expenditure of public and private sectors in 2021 reached KRW 102 trillion, and the ratio of R&D investment to GDP was 4.96%. It ranks second in the world after Israel. This study analyzes the current status of the domestic R&D service industry and the research and development (R&D) innovation ecosystem based on the business activity survey data of the National Statistical Office in terms of improving R&D productivity of domestic R&D investment that has exceeded 100 trillion won, and analyzes the global R&D service industry and analyzes the global research service industry and R&D service Industry support government policy As a result of the analysis, in the domestic R&D ecosystem, the R&D outsourcing demand of service companies is rapidly increasing, compared to the stagnant R&D outsourcing demand of traditional manufacturing companies. In order to respond to these changing demands for technological innovation, this study suggests balanced support for R&D outsourcing for manufacturing and service companies, expansion of domestic R&D outsourcing, establishment of R&D outsourcing strategies specialized for the service industry, establishment of an open R&D ecosystem, and innovation in connection with materials/parts/equipment strategies.

The Contribution of R&D Outsourcing to Productivity Growth

  • Seo, Hwan Joo;Kim, Han Sung;Lee, Young Soo
    • STI Policy Review
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    • v.3 no.1
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    • pp.80-95
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    • 2012
  • Few studies have focused on the impact of R&D outsourcing on technological innovation and productivity despite the increased importance of R&D outsourcing. This study analyzes the productivity effects of investment in R&D outsourcing with a sample of Korean manufacturing industries from 2001 to 2009. The estimation results show a nonlinear U-shaped relationship between productivity and the share of R&D outsourcing capital for total R&D capital. This implies that the cost of R&D outsourcing outweighs its benefits in the early stages of R&D outsourcing. The U-shaped relationship is particularly pronounced in high-technology industries.

Determinants of Korean Firms' R&D Outsourcing (한국 기업의 연구개발 외주활동 결정요인 분석)

  • Lim, Hyo-Jeong;Lee, Won-Young
    • Journal of Technology Innovation
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    • v.17 no.1
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    • pp.179-204
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    • 2009
  • This paper aims to analyze the relationship between R&D outsourcing ratio (external R&D expenditures out of total R&D expenditures) and firm characteristics. Four hypotheses are tested using firm-level data with Tobit regression method. The major findings of this paper are as follows. First, firms with high technological capabilities, which are measured by R&D expenditures per sale and the number of patents per employee, rely more on R&D outsourcing. Nonetheless, firms that own R&D centers tend to rely less on external outsourcing of R&D. Second, firms with high managerial innovation capabilities, which is measured by the introduction of IT solutions, show higher R&D outsourcing ratio. Third, bigger firms are likely to spend more in external R&D than in internal R&D. This paper also discusses implications on R&D policy of Korea.

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Analyzing the impact on logistics outsourcing success for Ugandan food processing firms through third-party logistics service providers' capabilities (제3자 물류 서비스공급자의 역량을 통한 우간다 식품 가공업체의 물류 아웃소싱 성공에 대한 영향 분석)

  • Alioni, Christopher;Park, Byungin
    • Journal of Korea Port Economic Association
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    • v.38 no.4
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    • pp.45-64
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    • 2022
  • Due to the recent and rapid globalization, logistics outsourcing has expanded globally and is seen as a means of creating a robust logistics system. However, many businesses continue to have difficulties with their logistics outsourcing contracts, which compels them to reinstate the logistics function for internal management. This study aims to investigate how organizational capabilities of logistics service providers (LSPs), notably flexibility, integration, innovation, and technological capabilities, impact on the logistics outsourcing success in Ugandan food processing firms. Using a structured questionnaire survey, cross-sectional data collected from 211 food processing firms in Kampala - Uganda were analyzed by partial least squares-structural equation modeling (PLS-SEM) using SmartPLS 3.3.7 software to examine the theorized relationships. The study findings revealed that whereas the technological and innovation capabilities positively and significantly influence logistics outsourcing success, the effects of flexibility and integration capabilities were insignificant. Additionally, the importance-performance map analysis (IPMA) reveals that the technological capability is a priority capability, followed by the innovation capability if logistics outsourcing success is to be achieved. Conversely, flexibility and integration capabilities are of low priority.