Date of Award

2-12-2015

Document Type

Capstone

Degree Name

Master Of Business Administration

Colleges & School

College Of Business And Management

First Advisor

Wilson Doug Thompson

Library of Congress Subject Heading

Contracting out; Information technology

Abstract

This study reviewed shortcomings present in the process of selecting the scope of offshore outsourcing vendor usage. While extensive financial cost information is available to companies considering this alternative, there is little mentioned of the quality of service performance experienced by the internal work teams that act as the primary consumers of these contracted services. Additionally, it is common practice to contract offshore outsourcing on a project or departmental level without granular examination of suitability at the job role level. This study surveyed a representative sample (n = 30) of IT professionals, and addressed two related research questions regarding internal value return. The first questioned whether a satisfactory level of overall job performance is returned by holistically-outsourced IT services to offshore vendors and results were inconclusive. The second examined if differences were present between work teams responsible for various IT functions, indicating a need for more granular consideration and found significant differences between work teams' needs. As to the first research question, results were calculated from the aggregate mean of each departmental review with which the respondent had direct experience. Overall job performance satisfaction was measured using the t-test methodology as minimally sub-par, with insufficient significance to reject the possibility of sampling error, t (22) = 2.57, p > .05. As to the second research question, departmental satisfaction ratings in 10 factors relevant to service delivery were analyzed for variation in order to determine if significant valuation differences were present. Significant variation present in satisfaction levels between teams are representative of variation in factor importance by department. Three discrete departments -- Application Development, Server Operations, & Solutions and Architecture were examined. An analysis of variance showed that the effect of performance factor was significant F (9, 27) = 304.434, p < 1 that the effect of work team was significant at F (3, 27) = 43.190, p < 1. As both performance factor and work team variations were significant above the confidence level (95%) chosen as the threshold, the null hypothesis that there was no variation in factor delivery efficacy was rejected. The results of the second research question of whether a more detailed and granular examination would reveal differences in factor importance -- or the difference in emphasis on one factor over another, a statistically significant finding that such differences are present was found. Significant differences in value perception present between individual work teams and the collective totals indicated that each work team was unique in their expectations -- and valuation -- of services provided.In order, therefore, to provide optimal value, a more granular examination of each position or team to be outsourced should be conducted in order to reserve those positions that do not perform well for in-house performance, and only outsource those positions likely to do well to an offshore vendor. As each company requires its own unique mix of IT management needs appropriate their situation, each IT work team was found to have a level of unique need as well. These needs define work team satisfaction levels with services provided. Additionally, companies that avoid single factor decision-making with regard to offshore outsourced vendor use may see more optimal results. For the same reasons outlined above, the service delivery performance seen by internal work teams reflect the quality of work performed by the vendor. If such value degrades below satisfactory levels, it is possible to erode the savings realized by cost incentives to a negative return.

Rights

Open Access

OCLC Number

931090372

Is this full-text open access?

1

Included in

Business Commons

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