• Proceedings of the Korea Society of Information Technology Applications Conference
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• 2005.11a
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• pp.301-304
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• 2005

Most of the small and medium industries rather focus on immediate problems and how to properly maintain organizational matters and existing system than the strategic and operational use of Information Technology when they deal with applications and operation of Information System. This study found out that there were few studies on IT outsourcing for small and medium companies in Korea compared to large enterprises' IT outsourcing. Most preceding studies researched the problems of partnership and technical, managerial, and economical success factors for big companies. Small and medium companies have the problems of financial difficulty, organizational scale (40.3%), shortage of manpower for system operation (24.1%), and lack of practical use of managers (8.9%). SMB firms have required support of government for their Informationalization but, we found out amount of companies (41%) not be informed or don't account on government's supporting IT of SMB programs. In addition, Range and Contents of outsourcing, Reputation of Outsourcing vendor, Reliability of maintaining were selected as CSFs of SMB IT outsourcing. While large corporation staff more considered CEO's willing and inner facts of their companies.

• Asia pacific journal of information systems
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• v.20 no.3
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• pp.115-137
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• 2010

Information technology (IT) outsourcing, the use of a third-party vendor to provide IT services, started in the late 1980s and early 1990s in Korea, and has increased rapidly since 2000. Recently, firms have increased their efforts to capture greater value from IT outsourcing. To date, there have been a large number of studies on IT outsourcing. Most prior studies on IT outsourcing have focused on outsourcing practices and decisions, and little attention has been paid to objectively measuring the value of IT outsourcing. In addition, studies that examined the performance of IT outsourcing have mainly relied on anecdotal evidence or practitioners' perceptions. Our study examines the contribution of IT outsourcing to economic growth in Korean industries over the 1990 to 2007 period, using a production function framework and a panel data set for 54 industries constructed from input-output tables, fixed-capital formation tables, and employment tables. Based on the framework and estimation procedures that Han, Kauffman and Nault (2010) used to examine the economic impact of IT outsourcing in U.S. industries, we evaluate the impact of IT outsourcing on output and productivity in Korean industries. Because IT outsourcing started to grow at a significantly more rapid pace in 2000, we compare the impact of IT outsourcing in pre- and post-2000 periods. Our industry-level panel data cover a large proportion of Korean economy-54 out of 58 Korean industries. This allows us greater opportunity to assess the impacts of IT outsourcing on objective performance measures, such as output and productivity. Using IT outsourcing and IT capital as our primary independent variables, we employ an extended Cobb-Douglas production function in which both variables are treated as factor inputs. We also derive and estimate a labor productivity equation to assess the impact of our IT variables on labor productivity. We use data from seven years (1990, 1993, 2000, 2003, 2005, 2006, and 2007) for which both input-output tables and fixed-capital formation tables are available. Combining the input-output tables and fixed-capital formation tables resulted in 54 industries. IT outsourcing is measured as the value of computer-related services purchased by each industry in a given year. All the variables have been converted to 2000 Korean Won using GDP deflators. To calculate labor hours, we use the average work hours for each sector provided by the OECD. To effectively control for heteroskedasticity and autocorrelation present in our dataset, we use the feasible generalized least squares (FGLS) procedures. Because the AR1 process may be industry-specific (i.e., panel-specific), we consider both common AR1 and panel-specific AR1 (PSAR1) processes in our estimations. We also include year dummies to control for year-specific effects common across industries, and sector dummies (as defined in the GDP deflator) to control for time-invariant sector-specific effects. Based on the full sample of 378 observations, we find that a 1% increase in IT outsourcing is associated with a 0.012~0.014% increase in gross output and a 1% increase in IT capital is associated with a 0.024~0.027% increase in gross output. To compare the contribution of IT outsourcing relative to that of IT capital, we examined gross marginal product (GMP). The average GMP of IT outsourcing was 6.423, which is substantially greater than that of IT capital at 2.093. This indicates that on average if an industry invests KRW 1 millon, it can increase its output by KRW 6.4 million. In terms of the contribution to labor productivity, we find that a 1% increase in IT outsourcing is associated with a 0.009~0.01% increase in labor productivity while a 1% increase in IT capital is associated with a 0.024~0.025% increase in labor productivity. Overall, our results indicate that IT outsourcing has made positive and economically meaningful contributions to output and productivity in Korean industries over the 1990 to 2007 period. The average GMP of IT outsourcing we report about Korean industries is 1.44 times greater than that in U.S. industries reported in Han et al. (2010). Further, we find that the contribution of IT outsourcing has been significantly greater in the 2000~2007 period during which the growth of IT outsourcing accelerated. Our study provides implication for policymakers and managers. First, our results suggest that Korean industries can capture further benefits by increasing investments in IT outsourcing. Second, our analyses and results provide a basis for managers to assess the impact of investments in IT outsourcing and IT capital in an objective and quantitative manner. Building on our study, future research should examine the impact of IT outsourcing at a more detailed industry level and the firm level.

• Journal of Information Technology Services
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• v.7 no.1
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• pp.151-166
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• 2008

The Outsourcing Industry has grown at a swift pace and evolved over time, and the Global IT Outsourcing market has shown signs of a steady growth. In the Korean financial industry, however, IT Outsourcing is not active as that of the advanced countries and there is lack of literature to understand the characteristics of IT Outsourcing in the financial industry. This paper, therefore, analyze the outcomes surveying 40 financial companies in Korea to investigate how IT Outsourcing risk factors affects IT Outsourcing intention. Based on our literature reviews based on number of key articles, journals, and the focus group interviews, IT Outsourcing risk factors are proposed into four different domains: Transaction, Client, Vendor and Environmental perspective. It found that two risk factors (Client and Environmental perspective) are closely related to the IT Outsourcing intention of the Korean financial industry. Finally, this paper concludes that concrete SLAs (Service Level Agreements) of the clients and support of government agencies are important to mitigate the IT Outsourcing risks.

• 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 Information Technology Applications and Management
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• v.12 no.1
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• pp.241-259
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• 2005

This study explores a model of partnership to the success of outsourcing CTI(computer telephony integration) based customer service centers of a telecommunication service company. The motivation of the study is to extend the research on IT outsourcing to IT-enabled BPO of customer service centers as a specific IT outsourcing practice. Previous research on IT outsourcing partnership and success is reviewed for developing an a research model of IT-enabled BPO. This model is proposed based on the previous partnership success models in information systems research. The results of the study confirm major factors related to successful IT-enabled BPO in previous research. Especially, the specificity of a contract and strategic collaboration in partnership are found to be influential on the success of IT-enabled BPO.

• Asia pacific journal of information systems
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• v.6 no.1
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• pp.195-222
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• 1996

Faced with the challenge of reducing costs and improving competitive position, firms have recognized outsourcing as an important information systems (IS) strategic option. It has not been understood clearly what determines IS outsourcing. Based on the IS literature and transaction cost economics, cost efficiency related factors were identified, and a questionnaire survey was conducted. The results based on 181 responses from the bank executives in U.S. revealed that vendor production cost advantage and transaction risk are significant predictors of degree of outsourcing and outsourcing preference for data processing services. Insufficiency of IS funds and information technology uncertainty were found to be not only positively associated with vendor production cost advantage, but also directly associated with outsourcing preference and degree of outsourcing. Firm size is, however, not significantly related to vendor production cost advantge and IS outsourcing.

• Journal of Information Technology Services
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• v.1 no.1
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• pp.149-159
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• 2002

It is estimated that the world market size of the outsourcing of information system will be 780 billions in 2004, and that of ASP, one of outsourcing markets, will be 24 billions in 2005. The domestic outsourcing market also has 6 times grown in 2001 compared to the size in 2000. However, there have been only a few systematic researches about information system outsourcing and ASP in Korea. Though the importance of ASP has been recognized, no business model has been examined. So, this research was done to survey the outsourcing of information system and the meaning/present status of ASP, and to consider several factors to successfully introduce this service to companies. Especially, this research focused on ASP.

• Journal of Information Technology Services
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• v.4 no.2
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• pp.135-144
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• 2005

The plenty of successful cases of Multi-national companies has been realized benefits of offshore outsourcing in particular "cost savings" from offshore IT outsourcing services, such as call center, software development, IT support and maintenance etc. A few Korean companies recently started to make the feasibility study of offshore IT outsourcing to catch up with the global trend. The objective of this study is to present the feasibility of offshore IT outsourcing of Korean companies through the analysis of pilot projects results between Indian and Chinese companies. The analysis include key elementsof cost, productivity, quality, practical issues as well as Gartner's framework, "AD Sourcing Cost Model", composed of 7 model factors. The findings of this study are not limited to understand offshore IT outsourcing but also provide useful guidelines covering wide range from the theoretical framework of selecting suitable offshore partner.

• Journal of Preventive Medicine and Public Health
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• v.40 no.1
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• pp.64-70
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• 2007

Objectives : This study was conducted to investigate the current status of outsourcing in Korean hospital information systems and the factors influencing its introduction. Methods : The authors surveyed 136 hospitals located in Seoul and its surrounding vicinities from June 7 to June 23, 2006. The facilitators and inhibitors to outsourcing in hospital information systems were derived from literature and expert reviews. Multiple logistic regression analysis was applied to identify the major influencing factors on outsourcing in hospital information systems. Results : Eighty-six (63.2%) of the 136 hospitals surveyed, which were mainly tertiary hospitals, responded to using outsourcing for their hospital information systems. "Hardware and software maintenance and support," "application development," and "management of service and staff" were the major areas of outsourcing. Outsourcing had been employed for $4\sim7$ years by 45.5% of the hospitals and the proportion of the budget used for outsourcing was less than 20%. A need for an extension in outsourcing was agreed on by 76.5% of the hospitals. The multiple logistic regression analysis showed that both consumer satisfaction and security risk have an influence on hospital information system outsourcing. Conclusions : Outsourcing in hospital information systems is expected to increase just as in other industries. One primary facilitator to outsourcing in other industries is consumer satisfaction. We found that this was also a facilitator to outsourcing in hospital information systems. Security risk, which is usually considered an inhibitor to information technology outsourcing, was proven to be an inhibitor here as well. The results of this study may help hospital information systems establish a strategy and management plan for outsourcing.

• Journal of Information Technology Services
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• v.16 no.2
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• pp.61-83
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• 2017

It is well known that PMO (Project Management Office)s are effective for successful project performance. Since it takes a long time to develop PMO capability, many public organizations and companies that do not have internal PMOs are increasingly relying on outsourcing of PMO functions in order to introduce mature PMO capabilities in a short period of time. However, it is not verified yet whether outsourced PMO is more effective than internal PMO or not. The objective of this study is to verify the effectiveness of PMO outsourcing. There are many different definitions about PMO function, and even the same PMO function may have different effectiveness depending on the Industry. Thus, this study redefined the PMO functions and Project Performance based on the past studies, and conducted research by focusing on the ICT (Information and Communication Technology) industry. The ICT industry is an important industry economically and has been attracting global attention recently. This study is the first attempt to prove the effectiveness of outsourcing of PMO function in Korea. We found that PMO function outsourcing is effective for certain aspects of project performance, particularly technical support and infrastructure management. Overall, PMO outsourcing is usually more effective than internal PMO for improving project performance. The results of this study are expected to contribute to the development of PMO theories and practices.