Global Information Technology Outsourcing

Global Information Technology Outsourcing In Search of Business Advantage Mary C. Lacity & Leslie P. Willcocks 'Lacity, and Willcocks have shown us again why they are the world's leading IT outsourcing gurus... the most comprehensive work on IT outsourcing to date.' Sara Cullen, National Partner, Australia Business Process Management, Deloitte Touche, Tohmatsu 'a valuable collection... readers will find here advice that premier consultants would deliver for a very large multiple of the price of this book.' Paul A. Strassmann, former CIO of General Foods, Kraft, Xerox and the US Department of Defense '(a). "must read" for anyone in search of a clear understanding of what information technology outsourcing is all about... absolutely no one should jump into outsourcing prior to taking advantage of the outstanding case studies outlined in this book.' Emmett Paige, President, OAO Corporation 'an excellent guide to successful outsourcing, the best I have read on the topic. It should be mandatory reading for any senior executive.' Gail Burke, Executive Director & CIO, Macquarie Bank, Australia 'crisp and concise. The studies selected for detailed presentation are excellent and the analysis... rings with credibility.' Rob Westcott, Vice President and CIO, General Motors Acceptance Corporation International Operations, UK 'Lacity and Willcocks have... unrivalled access to outsourcing deals across the globe... their new book... is a powerful synthesis of their learning (and) their chapter on risk management is a groundbreaking contribution. A vitally important business guide.' Richard Sykes, Chairman Morgan Chambers plc. - Europe's largest independent consultancy in IT services & business process sourcing 'Lacity and Willcocks tell it like it is and pull no punches... A must read for any organization contemplating outsourcing or trying to fix a broken outsourcing relationship... Planning for outsourcing, negotiating the deal, making the relationship work - it's all here.' Bob Young, Executive Director, South Australian Government Account, EDS (Electronic Data Systems) 'For those of us with a deep knowledge and experience of outsourcing, this book is required reading. For those who are just starting out on the journey, it is essential reading.' Robert White, CEO, Lucidus Management TechnologiesIn den 80er Jahren haben große Unternehmen den Beweis dafür erbracht, daß Wettbewerbsvorteile durch den erfolgreichen Einsatz von IT gesichert werden können. In den 90er Jahren war Kodak eines der ersten Fortune 500 Unternehmen, das den Standpunkt vertrat, IT sei in erster Linie eine Ware, die am besten bei Fachverkäufern aufgehoben sei. Früher ging es beim Outsourcing hauptsächlich um Kostensenkung. Heute geht es darum, dynamische Gruppen zu verpflichten, die schnell auf Unternehmensbedürfnisse und Marktchancen reagieren. "Global Information Technology Outsourcing" erläutert, wie man sich einen entscheidenden Wettbewerbsvorteil verschafft, indem man beim IT-Outsourcing eine gewisse Flexibilität entwickelt aber gleichzeitig die Kontrolle darüber behält. Mit Beispielen aus einer Studie mit 75 internationalen Unternehmen, darunter auch Dupont, British Aerospace und BP Exploration. Acknowledgements

Introduction

Chapter One: Overview

Chapter Two: Global Trends and Practices: An Assessment

Chapter Three: Case Studies in Mega-Contracting (A) South Australia and Dupont

Chapter Four: Case Studies in Mega-Contracting (B) British Aerospace and UK Inland Revenue

Chapter Five: Proven Practices in Evaluating and Negotiating IT Outsourcing Deals

Chapter Six: Making IT Sourcing Decisions: A Framework

Chapter Seven: Preparing for Outsourcing: Risk Mitigation for Business Advantage

Chapter Eight: Preparing for Outsourcing: The Core IT Capabilities Framework

Chapter Nine: Managing Stakeholder Relationships Across Six Phases

Chapter Ten: In Conclusion: Future Outsourcing

Notes

Appendix A 1999/2000 Survey Findings From the USA and UK

Appendix B Case Studies Profiles

Guide to Authors' Publications on IT Outsourcing

Index

***** Star Rating (Excellent) Book of the Month (Computer Bulletin, November 2001)

"... instant classic." (IT Week, 16th July 2001)

"... excellent book." (IT Week, 16th April 2001)

"... this is one of the best books I have read on this or any other IT-related subject in along time.... If you only read one book on outsourcing this year, make it this one." (Supply Management, 12th April 2001)

Mary Cecelia Lacity is Associate Professor of IS MIS at the University of Missouri, St. Louis and a Research Affiliate at Templeton College, Oxford University. Her research focuses on IT management practices in sourcing, IT privatization, benchmarking, IT metrics, and client/server development. She has conducted case studies in over seventy-five organizations, surveying both US and European IT management practices and given executive seminars world-wide. She was the recipient of the 2000 World Outsourcing Achievement Award sponsored by PricewaterhouseCoopers and Michael Corbett and Associates. Previous publications include: Strategic Sourcing of Information Systems and articles in academic and practitioner publications such as the HBR, Sloan Management Review and MIS Quarterly. She is currently US Editor of the Journal of Information Technology.
Leslie P. Willcocks has an international reputation for his work on information Management, IT evaluation and information Systems Outsourcing. He is Fellow and University Reader at Templeton College, University of Oxford; Visiting Professor at Erasmus Universiteit, Rotterdam; Professorial Associate at the University of Melbourne, and Distinguished Visitor at AGSM. He holds a doctorate in information systems from the University of Cambridge, and is Editor-in-Chief of the Journal of Information Technology. He is co-author of sixteen books, including Strategic Sourcing of Information Systems and Beyond The IT Productivity Paradox with Wiley. He has published over one hundred and thirty papers in journals such as HBR; Sloan Management Review; MISQ; Communications of the ACM, and the Journal of Strategic Information Systems. Despite the rapid growth in Information Technology (IT) outsourcing - a market predicted to grow to over $150 billion by the year 2005 - most companies are still seeking the elusive 'added-value' they anticipated. Customers expect IT outsourcing to dismantle bureaucratic IT organizations into variable-cost service providers, to meet global IT skill shortages, and even to generate revenue with their IT suppliers. In short, IT outsourcing promises to transform IT functions into lean, dynamic groups that respond quickly to business needs and opportunities. But do customers actually achieve these business advantages? And if so, how? Based on in-depth case studies in organizations and six hundred CIOs surveyed in US, UK, Australia, Europe, and Japan, the authors found that most organizations still achieve modest goals of reducing costs and improving service. Organizations seeking more radical transformation through mega-outsourcing face greater risks and challenges. Findings clearly indicate that gaining a business advantage requires a comprehensive sourcing strategy including both insourcing and outsourcing. IT functions must first develop a set of core IT capabilities that must be insourced. A key success factor is the alignment of expectations among all these stakeholders to ensure that sourcing objectives are met; all too many disappointments with IT outsourcing are based on unrealistic expectations. By applying the frameworks and practices presented here, customers and suppliers can gain business advantage. Global Information Technology Outsourcing In Search of Business Advantage Mary C. Lacity & Leslie P. Willcocks 'Lacity, and Willcocks have shown us again why they are the world's leading IT outsourcing gurus... the most comprehensive work on IT outsourcing to date.' Sara Cullen, National Partner, Australia Business Process Management, Deloitte Touche, Tohmatsu 'a valuable collection... readers will find here advice that premier consultants would deliver for a very large multiple of the price of this book.' Paul A. Strassmann, former CIO of General Foods, Kraft, Xerox and the US Department of Defense '(a). "must read" for anyone in search of a clear understanding of what information technology outsourcing is all about... absolutely no one should jump into outsourcing prior to taking advantage of the outstanding case studies outlined in this book.' Emmett Paige, President, OAO Corporation 'an excellent guide to successful outsourcing, the best I have read on the topic. It should be mandatory reading for any senior executive.' Gail Burke, Executive Director & CIO, Macquarie Bank, Australia 'crisp and concise. The studies selected for detailed presentation are excellent and the analysis... rings with credibility.' Rob Westcott, Vice President and CIO, General Motors Acceptance Corporation International Operations, UK 'Lacity and Willcocks have... unrivalled access to outsourcing deals across the globe... their new book... is a powerful synthesis of their learning (and) their chapter on risk management is a groundbreaking contribution. A vitally important business guide.' Richard Sykes, Chairman Morgan Chambers plc. - Europe's largest independent consultancy in IT services & business process sourcing 'Lacity and Willcocks tell it like it is and pull no punches... A must read for any organization contemplating outsourcing or trying to fix a broken outsourcing relationship... Planning for outsourcing, negotiating the deal, making the relationship work - it's all here.' Bob Young, Executive Director, South Australian Government Account, EDS (Electronic Data Systems) 'For those of us with a deep knowledge and experience of outsourcing, this book is required reading. For those who are just starting out on the journey, it is essential reading.' Robert White, CEO, Lucidus Management Technologies