By Mary C. Lacity
A wealthy database of over 2,200 outsourcing preparations, studied throughout sectors and geographies, and through the years, from inception, via agreement signing, to results. This publication has exceptional perception into the powerful practices which were confirmed potent time and again.
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Additional info for Advanced Outsourcing Practice: Rethinking ITO, BPO and Cloud Services
In addition, providers are not attracted to deals that are too small, or may not devote their best resources to service a tiny account (Lacity and Willcocks 2011). In general, too much outsourcing also was associated with lower levels of success (Currie 1998; Lacity and Willcocks 1998; Seddon 2001; Straub et al. 2008). As an example of “too much,” Lacity and Willcocks (1998) found that clients who outsourced more than 80% of their IT budgets had success rates of only 29%; clients who outsourced less than 80% of their IT budgets had success rates of 85%.
Clients experienced better outcomes when both clients and providers were technically and methodologically mature. For the outsourcing of new application development, research has found that it is important for clients and providers to have shared processes (Davenport 2005) and that these should be standardized and mature. Rottman and Lacity (2006) interviewed 149 people from both client and provider organizations. They found that ITO success was greater when both the client and provider ﬁrms had at least CMMI2 level 3 capabilities.
Mojsilovic et al. (2007) studied 68 publicly traded ﬁrms and found that companies with lower proﬁts and lower earnings per share were more likely to outsource IT. In the BPO data, only 20% of the ﬁndings reported that BPO was done by client ﬁrms with poor ﬁnancial performance. In contrast to ITO, the BPO research is based on only ﬁve studies, of which three found that good client ﬁrm performance was positively associated with BPO decisions. This result suggests that client ﬁrms with good performance were more likely to outsource business processes.