• Asia pacific journal of information systems
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• 제7권3호
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• pp.39-59
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• 1997

This study presents the growth strategy of outsourcing service by finding out the differences of importance between user firms and system integration(SI) firms in Korean outsourcing business, The result of data analysis reveals that there are siginificant differences between user firms and SI firms in some components of information systems(IS) outsourcing services. User firms regarded integation of distributea data centers as the prominent issue of IS environment changes. Meanwhile, SI firms chose management of IS/VAN center, office automation(OA), and management of global network, as the more important issues in the application area of outsourcing. Among the merits of outsourcing, both of them considered cost reduction and IS flexibility as the most important factors, However, they chose the difficulty of management control and the lack of operation knowledge among the demerits of outsourcing, Also, they commonly selected overall IS consulting among the components of outsourcing diffusion. In the question of future outsourcing services, user firms chose the adoption of client/server architecture, while SI firms selected the application of multimedia. These results show that there are some differences of preference between user firms and SI firms. Most of user firms consider the outsourcing to maximize information utilization, while the service suppliers focus on new IT adoption and its application to organization. For the strategic use of outsourcing services, SI firms are required to establish the diffusion strategy to meet the outsourcing needs of user firms.

• 한국시스템다이내믹스연구
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• 제7권1호
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• pp.229-243
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• 2006

In recent years, due to a lack of expertise, many organizations have been devoting large portions of their budget to outsourcing. Outsourcing is now often regarded as a solution for all problems. However, the lack of clear understanding of the effectiveness of outsourcing could lead to many problems in organizations even though outsourcing is known to provide advantages to some organizations. Moreover, outsourcing could have a negative effect on knowledge management in some aspects. There have been and continue to be numerous studies into outsourcing; however, their findings primarily relate to cost reduction in short-term. Regardless of increasing demands on outsourcing and the importance of knowledge management, little research has focused on decision-making structure from knowledge management perspective. This paper attempted to quickly identify promising movements with potentially significant effects on IT/IS outsourcing.

• 한국IT서비스학회:학술대회논문집
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• 한국IT서비스학회 2009년도 춘계학술대회
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• pp.287-292
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• 2009

The Outsourcing Industry has grown swift pace and evolved over time, and the Global IT Outsourcing market has shown signs of a steady growth. In the Korean company, however, IT Outsourcing is not active as that of the advanced countries and there is lack of literature to understand the characterristics of IT Outsourcing in the Korean company. This paper, therefore, analyze the outcomes surveying 65 compaanies in Korea to investigate how IT Outsourcing risk factors affects IT Outsourcing intention. Based on our literature reviews bassed on number of key articles, journals, and the focus group interviews, IT Outsourcing risk factors are proposed into four different domains: Transaction, Client, Vendor, Environment perspectives. It found that one factor(Vendor perspectives) is closely related to the IT Outsourcing intention of the Korean company. Finally, this paper analyzed the pros and cons of IT Outrcing offers a guide to the risk factors.

• 한국IT서비스학회지
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• 제8권3호
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• pp.135-143
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• 2009

The Outsourcing Industry has grown swift pace and evolved over time, and the Global IT Outsourcing market has shown signs of a steady growth. In the Korean company, 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 Korean company. This paper, therefore, analyze the outcomes surveying 65 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, Environment perspectives. It found that one factor(Vendor perspectives) is closely related to the IT Outsourcing intention of the Korean company. Finally, this paper analyzed the pros and cons of IT Outrcing offers a guide to the risk factors.

• 한국산업정보학회:학술대회논문집
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• 한국산업정보학회 2008년도 추계 공동 국제학술대회
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• pp.365-384
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• 2008

Many studies on ASP outsourcing area have focused on the Critical Success Factors(CSFs) of ASP outsourcing projects or on the service quality of ASP Service. But these studies have limitations to explain how to succeed in doing ASP outsourcing project. The objective of this research is to overcome this limitation by using the concept of "IT Risk" in Outsourcing. The effective control of the risks-caused during the IS outsourcing process-gives (ASP service using) users a powerful tool to minimize the risks and thus maximizes the possibility of ASP outsourcing project success. In order to perform this objective, this research set up the research model which is composed of three concepts. The three concepts are 1. Undesirable Outcomes(:UO) as IT outsourcing Risks, 2. The Source of Risks(:SOR) influencing the UO, and 3. the intention to get/execute Real Option Portfolio to control the risk level of SORs and UOs. This research has some important and interesting implications on the ASP outsourcing area. First, this research classifies the risk factors as three concepts and finds the interactions among them. Second, Using Real Option portfolio can control the risks effectively occurred during outsourcing projects. Third, Vendors(ASP service providers) can offer users IN TIME the options which can minimize the occurrence of risks.

• 한국경영과학회지
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• 제32권3호
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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.

• 한국IT서비스학회지
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• 제7권1호
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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.

• Journal of Preventive Medicine and Public Health
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• 제40권1호
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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.

• Asia pacific journal of information systems
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• 제17권3호
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• pp.55-78
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• 2007

Increasingly the information technology (IT) outsourcing phenomenon has been a subject of much academic research. Scholars have argued that knowledge complementarities playa crucial role in forming successful IT outsourcing relationships. However, notwithstanding the fast growth of IT outsourcing, prior studies on IT outsourcing have not included knowledge complementarities in their research design as a determining factor for IT outsourcing effectiveness. Further, the understanding of knowledge complementarities itself remains ambiguous. In this study, the concept of knowledge complementarities is explored in the IT outsourcing context at the firm level. Specifically, it addresses the following questions: what is knowledge complementarities? How does it affect IT outsourcing effectiveness? Is the relationship between knowledge complementarities and IT outsourcing effectiveness influenced by organizational trust between the client and the vendor? Grounded in the relevant theories to knowledge management and IT outsourcing, we develop a research model in which both the main effects of knowledge complementarities and organizational trust and the moderating effect of organizational trust on the relationships between knowledge complementarities and IT outsourcing effectiveness are tested. Within this research model, we develop a second order construct of knowledge complementarities, consisting of complementary business knowledge and complementary IT knowledge as the first order constructs. We have used data from a field study of 103 firms in Korea to test the proposed model. Controlling the effects of conflict resolution efforts, our empirical analysis found significant main effects of knowledge complementarities and organizational trust on IT outsourcing effectiveness. The results suggest that knowledge complementarities between the client and vendor positively contribute to IT outsourcing effectiveness. Specifically, the client needs to have enough IT knowledge to assess the quality of IT outsourcing services provided by the vendor. Meanwhile, the vendor should understand the client's business well enough to provide IT services, Contrary to our expectations, the moderating effect of trust on the relationship between knowledge complementarities and IT outsourcing effectiveness was not supported in this study. The results also show that organizational trust between client and vendor significantly influences IT outsourcing effectiveness. As for contributions of this study, we have not only clarified the concept of knowledge complementarities, but also developed an instrument to measure the concept and empirically validated it. Further, we have tested the idea that knowledge complementarities and trust directly influence IT outsourcing effectiveness and trust moderates the relationship between knowledge complementarities and IT outsourcing effectiveness. Out results prescribe the knowledge complementarities of client and vendor as a useful path to IT outsourcing effectiveness. These findings have important theoretical and practical implications, which are discussed in the paper.

• Asia pacific journal of information systems
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• 제20권3호
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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.