Description: PMBA IS 6891 

Fall 2013

Management of Global Sourcing of Business and IT Services

Prerequisites: Graduate students:  IS 5800

Course Description:


Largely fostered by globalization, the Internet, processing standards, and common software packages, organizations now regularly source business and information technology (IT) services globally. This course covers topics to help managers source business and IT services from the initiation of a sourcing decision and evaluation process through to service provider selection and transition to outsourcing.  The course also covers the client and provider capabilities and contractual and relational governance that are needed to ensure good outsourcing outcomes for both parties.  The course focuses on global sourcing of IT, financial and accounting services, human resource services, procurement, real estate services, legal services, and other back office services.  Students will also investigate insourcing options such as shared services and captive centers and other emerging sourcing topics such as cloud computing, impact sourcing, crowd sourcing, and rural sourcing.


Course Instructor:

Dr. Mary C. Lacity
233 Express Scripts Hall
(314) 516-6127 begin_of_the_skype_highlighting              

(314) 516-6827 (fax)



Course Instructor:


Dr. Mary Lacity is Curators’ Professor of Information Systems and an International Business Fellow at the University of Missouri-St. Louis.  She is also Visiting Professor at the London School of Economics, a Certified Outsourcing Professional ®, Co-Chair of the IAOP Midwest Chapter, Industry Advisor for the Outsourcing Angels and the Everest Group, Co-editor of the Palgrave Series: Work, Technology, and Globalization, and on the Editorial Boards for Journal of Information Technology, MIS Quarterly Executive, Journal of Strategic Information Systems, IEEE Transactions on Engineering Management, and Strategic Outsourcing: An International Journal.  Her research focuses on global outsourcing of business and IT services. She has conducted case studies and surveys of hundreds of organizations on their outsourcing and management practices. She has given executive seminars world-wide and has served as an expert witness for the US Congress. She was the recipient of the 2008 Gateway to Innovation Award sponsored by the IT Coalition, Society for Information Management, and St. Louis RCGA and the 2000 World Outsourcing Achievement Award sponsored by PricewaterhouseCoopers and Michael Corbett and Associates. She has published 16 books, most recently The Rise of Legal Services Outsourcing (Bloomsbury Publishing, 2014,  London; coauthors Leslie Willcocks and Andrew Burgess) and Advanced Outsourcing Practice: Rethinking ITO, BPO, and Cloud Services (Palgrave, 2012; co-author Leslie Willcocks). Her publications have appeared in the Harvard Business Review, Sloan Management Review, MIS Quarterly, IEEE Computer, Communications of the ACM, and many other academic and practitioner outlets. She was Program Co-chair for ICIS 2010. Before earning her Ph.D. at the University of Houston, she worked as a consultant for Technology Partners International and as a systems analyst for Exxon Company, USA.


This course is cross-listed in the Outsourcing Professional Course Catalog (OPCC)


This course is worth 25 of the 150 points required to become a Certified Outsourcing Professional (COP).


The International Association of Outsourcing Professionals (IAOP) offers a number of certifications, including the COP-Certified Outsourcing Professional.  To become a Certified Outsourcing Professional (COP), an individual must be able to demonstrate both the experience and knowledge needed to design, implement, and manage outsourcing initiatives with a high probability of achieving the organization's intended outcomes. The experience and knowledge areas addressed by the certification cover the non-domain specific activities common to outsourcing as a management practice irrespective of the individual's role as a customer, provider, or advisor. In so doing, the certification creates an experience and knowledge set common to and shared by all professionals in the field. 


What is the process for becoming a COP? Applicants will be asked to successfully demonstrate that they possess the necessary knowledge and experience to be considered a COP. This knowledge and experience can be demonstrated through a combination of the following:


Comprehensive Work Experience in the field of outsourcing as demonstrated by employment on one or more projects across one or more firms.


Knowledge Assessment through passing the multiple choice COP Examination developed by the Standards Committee. The exam is taken online and consists of 200 multiple choice questions, of which 70% of the questions must be answered correctly to pass.


Education including successful completion of the COP Master Class and/or holding a relevant post-graduate degree.



Required Course Materials:



Outsourcing Professional Body of Knowledge, by International Association of Outsourcing Professionals (2010), Van Haren Publishing


The Outsourcing Enterprise: From Cost Management to Collaborative Innovation (2011), by Leslie Willcocks, Sara Cullen, and Andrew Craig, Palgrave, UK


Additional assigned readings and webinars as posted on




Course Assessment Items:


Assessment Item

Percentage of Grade

Due Date

Exam 1 (Take Online)


By Wed Dec 11 8:00am

Exam 2 (Take Online)


by Wed Jan 22 8:00am

Group Presentation


See Schedule

Exam 3 (Take Online)


by Wed Feb 19 8:00am

Class Participation


Attendance and active class participation


Students may drop the lowest exam score; Because students may drop an exam (or skip one exam), the final average is calculated using the following formula:


(Best Exam Score *.20) + (Second Best Exam Score *.20) + (Group Oral Presentation Grade *.35) + (Class Participation * .05)





The purpose of the exams is to make sure that you read, understood, and can apply material contained in the readings and lectures.  The exams are administered online. EXAMS ARE POSTED IN THE ASSIGNMENT FEATURE IN MYGATEWAY.  Complete all the required readings and listen to all required webinars prior to opening the exam.


·         Exam 1 covers the following modules: Overview of Outsourcing, What Providers Would Tell you if they Could, 20 years of Research, Motivations to Outsource, Decision Process


·         Exam 2 covers the following modules: Theories of Outsourcing, Transaction Attributes, Offshore Outsourcing and Rural/Impact Sourcing.


·         Exam 3 covers the following modules: Client Firm Capabilities, Supplier Firm Capabilities, Contractual Governance, and Relational Governance



Do not open the test until after you have read the required materials and you have studied.  You may use your notes, readings, power point slides to answer questions.  You may not speak with other students about the exam.

There are 40 multiple choice questions (worth 2.2 points each) randomly selected on each exam plus one essay (12 points).

Grading Exams:

Exams are due at the dates and times as indicated above. 10 points are deducted for each day late.  Exams are considered 1 day late at 8:31am.  

There is no “double grading” (i.e. no asking to redo an exam if a student is not satisfied with the grade earned). 


Grading Philosophy:

My grading philosophy is that professors do not “give” grades.  Students “earn” grades.  I take grading very seriously.  I thoughtfully grade each assessment item on the assessment sheets.  A sub-culture has emerged among some (certainly not all) graduate students that graduate students are “customers” and that everything they do should be awards an A.  Such a view dilutes the value of your education, and as a professor I cannot possibly hold this view.  I am morally obligated to clearly define expectations (which I do on a very detailed syllabus and detailed assignments), to help you as much as I can before your assignments are due, and to grade the actual performance using the assessment sheets.  

I must treat and assess each student the same—fairly and consistently.  I cannot make exceptions for some students.  All that said, I have great empathy for college students, having been one myself for nine years!   I care about your learning. No one would be happier than I to see all students earn high grades!

In this class, the letter grades use the following scale:


92.00 or above


90.00 to 91.99


88.00 to 89.99


82.00 to 87.99


80.00 to 81.99


78.00 to 79.99


72.00 to 77.99


70.00 to 71.99


Below 70.00




Class Participation:


The class only meets face-to-face a few times so it is vital that students attend all classes.   Students who must miss a class must watch class recording and submitting short essays on missed material in order to complete the class. 


Oral Group Presentation:


The class will be divided into six groups. Each group is responsible for presenting a 50 minute presentation to the class. Each group will be assigned a different ITO/BPO topic from among the following:


Group 1: BPO: Outsourcing Human Resources OR Financial & Accounting Services

Group 2: BPO: Group Choice (Procurement Outsourcing, Real Estate, Innovation, Claims Administration; Policy Administration; Legal Services—anything except HR or FAO)

Group 3: Emerging ITO/BPO Trend: Cloud Computing

Group 4: Insourcing Options:  Shared Services or Captive Centers

Group 5: Emerging ITO/BPO Trend: Crowdsourcing!

Group 6: Political View: Is Outsourcing Good or Bad for the US Economy?

Group 7: Offshoring: Continent & Country Focus: (PICK ONE)

ITO and BPO in Europe    or

ITO and BPO in Europe/Africa  or

ITO and BPO in Central/South America





Secondary Resources. Each group should research at least 20 external references such as journal articles, newspapers, short videos, or relevant websites.  Some excellent sources that cover the ITO and BPO markets are:


Outsourcing Research & Professional Sites:

High Performance BPO website:  

IAOP homepage:                         

IAOP Midwest Chapter:                        

Everest Research Institute            

Information Services Group         

LSE Outsourcing Unit:                 

Horses for Sources:                    


Journals devoted to outsourcing:

Academic Journal:                                 Strategic Outsourcing: An International Journal

IAOP Pulse Magazine                  

Professional Outsourcing            

Globalization Today:                    

HRO Today Journal:                    

FAO Today Journal:                    

Outsource Magazine                    



At least 10 of these references must be from refereed journals or academic journals for practitioners, such as Sloan Management Review, Harvard Business Review, Academy of Management Perspectives. Refereed journals assure some level of validation.  The academic articles don’t have to be limited to just your narrow topic (such as Egypt), but can include academic articles on outsourcing in general, surveys of outsourcing, theories or outsourcing, literature reviews on outsourcing, etc. The best source to find refereed journal articles is ABI-INFORM, available online to UMSL students.  To find refereed articles, simply tick the box for “peer-reviewed ” while in ABI inform. Watch recording on finding academic articles (in mygateway under GROUP PROJECT MATERIALS folder)


Information about required Secondary Sources


Many students liven up their presentations by including short video clips about their topic (such as a youtube video). 


Primary Resources. Students should conduct at least three original interviews for their group projects.  Another potential source of primary data is an original survey.  For example, a past group surveyed lawyers to see if they would outsource any legal work.   Another group surveyed graduate students to assess their level of participation in crowdsourcing.


       Information about required Primary Sources



Each group should only plan 40 minutes of content to allow 10 minutes of audience interaction during the presentation. Think of yourselves not as formal speakers, but as teachers. You should incorporate the audience during the entire presentation.  In the past, students have done very creative things for audience participation including a short Jeopardy game, a bingo game, a short survey, a guess the provider logo game, etc.




Each group will develop power point slides.


On the day of your presentation, please provide a STAPLED, hardcopy set the slides for your instructor. Please print only 2 slides per page.


Please load your final power point slides in GROUP X Group Pages under FILE EXCHANGE. 


Please name the final version of your power point slides exactly as indicated below:





Oral Presentation File Name

File names are case sensitive

Group 1:


Group 2:


Group 3:


Group 4:


Group 5:


Group 6:


Group 7:




Make sure that every slide appropriately credits sources, be it an interview, printed material, or web site.

Information about Citations


You may not copy directly from sources unless you indent the text and put it in quotes.  This would normally be reserved for a few sentences of specific quotations. 

You must RE-WORD sources!  You are using external references as INPUT to your originally created OUTPUT.

Professor takes plagiarism very seriously and any student who copies directly from the web or printed sources will be turned over to Academic Affairs.

I am very happy to work with groups on their specific topic. I strongly suggest that I meet with your groups several times.  At a MINIMUM, I want to review your power point slides at least a week before your presentation. Please feel free to email me to make an appointment in person, or we can do it over the phone or online as well.

Advice for Oral Group Presentation:

My aim is to have the best possible group presentations.   Based on vast experience with group assignments, keys to success include:


·        Start your group project as soon as groups are assigned.

·        Start exploring your topic by gathering general statistics about your topic and start answering the questions: Why is your topic important to general managers? How much money do companies spend on your topic? What are the promised benefits of this topic if properly managed?  What are the potential pitfalls if mis-managed?

·         Identify early the original sources of data you want to collect (interviews, case study materials, original surveys)

·         Read entire syllabus regarding the group project

·         Be sure to get the best, most current, most relevant sources of content available

·         Have content completed one week prior to presentation to have time to incorporate professor’s feedback.

·         DO NOT HAVE MORE THAN 50 POWER POINT SLIDES (excluding references).

·         Meet with group to practice oral presentation (this is the only way to get the timing correct!)

·         When speaking in the front of the class, do not use notes.  Your power point slides serve as your notes.

·         The best presentations pass control many times among group members.  You should not organize the speaking as four 10-minute, independent speeches.  The presentation should be integrated so that every person speaks several times.

·         To form a cohesive group, do not think that an individual “owns” a certain part of a presentation.  It is quite natural for one member to gather data and another member may actually present the data. 

·         The audience gets tired and cannot absorb too much information at one time.   Groups are more effective when they deliver less information in a relaxed, effective manner rather than trying to rush through too much information. Usually, as the group presentation approaches, groups realize they have too much information!  The group should keep the best content.  No individual should feel bad if the information they collected is not all used.  Again, each member needs to abandon the idea that they “own” content.  The content is group owned.

·         Remember to have about 10 minutes of audience interaction. Do not rely on “Does anyone have any questions?” to fill up your ten minutes of class participation.   In the past, students have done very creative things for audience participation.


Oral Group Presentation Grades:

Oral presentations are graded as a group grade rather than as individual grades. 


GROUPS 1-6: Oral group presentations will be graded using the following form: oral group grade form


GROUP 7: Oral group presentation will be graded using the following form: oral group grade form  



Individuals in a group never contribute the exact equal amounts of time, content, and value. This often leads to some people feeling they worked more than others, and some people feeling left out. Usually a leader emerges, one who will hopefully help find the gifts of each individual. Unfortunately, I cannot effectively intervene in these matters, and rely on you as adults to ensure that all members of your group meaningfully contribute to the data gathering, interviewing, analysis, slide design, and presenting the final project.

All group members will receive the same grade for the oral presentation, provided that all members agree that each individual made a significant contribution. If a group member has not meaningfully or fully participated, I will assume that group member was legitimately distracted by other life issues such as illness or heavy work travel. I do expect that members who do not fully participate show their integrity by willingly reducing their percentage of contribution. It is no shame to not fully participate because of legitimate reasons.  It is a great shame to expect other group members to falsely report contribution percentages.

In order to provide some accountability, albeit imperfect, I will ask that each group fill in the following form and each group member must sign it. This form is due on the day of presentation.

Please print, fill in, and have every member sign a copy of: group contribution form .


Course Schedule:






Learning Objectives




Nov 23

1:30pm to 4:00pm

Overview of Global Outsourcing



Understand definition of global sourcing;


Understand challenges facing back office managers;


Understand the major transformation approaches;


Understand size of global outsourcing markets;


Understand outsourcing success rates;


Understand why outsourcing is so challenging to client organizations;


Learn what clients need to master to achieve global sourcing objectives


Do on your own


What Providers Would Tell Customers if They Could

Understand that most of what ITO/BPO providers say is supported by research and will ultimately benefit the customer if they understand the provider perspective.

Listen to the Webinar recording



Lacity, M., and Willcocks, L. (2011), “PART 1: What Suppliers Say About Clients: Establishing the Outsourcing Arrangement,” Cutter Consortium Sourcing & Vendor Relationships Executive Report,  Vol. 12, 2.

Lacity, M., and Willcocks, L. (2011), “PART II: What Suppliers Say About Clients: Managing the Outsourcing Arrangement,”  Cutter Consortium Sourcing & Vendor Relationships Executive Report, Vol. 12, 3.

Do on your own



20 Years of Outsourcing Research Summarized

Understand the determinants of outsourcing decisions;


Understand the determinants of outsourcing outcomes

Read: REQUIRED: Lacity, M., and Willcocks, L. (2012), Chapter 1, “Robust Practices from Two Decades of ITO and BPO Research,” from Advanced Outsourcing Practice: Rethinking ITO, BPO, and Cloud Services, Palgrave, London


listen to the Webinar recording

Do on your own


Motivations to Outsource: Moving to the Strategic Agenda

Understand most common motives driving ITO and BPO decisions;


Understand five reasons why CEOs should pay attention to ITO and BPO

Read: REQUIRED: Outsourcing Professional Body of Knowledge, IAOP, Van Haren Publishing, CHAPTER  1


Read: REQUIRED: The Outsourcing Enterprise: From Cost Management to Collaborative Innovation (2011),  CHAPTER 1


Listen to the Webinar recording

Do on your own


Decision Process

Understand importance of a detailed evaluation process


Understand nine building blocks of the outsourcing life cycle.


Ability to identify top global ITO and BPO providers;



Read: REQUIRED: Outsourcing Professional Body of Knowledge, IAOP, Van Haren Publishing, CHAPTERS 5 and 6.


(Also from previous Reading: The Outsourcing Enterprise: From Cost Management to Collaborative Innovation (2011),  CHAPTER 1


IAOP Lists of top providers/advisors listed in mygateway.


Listen to the Webinar recording: Decision Process


Due by Wednesday

Dec 11







December 13



2:30 to 3:20

Guest Speaker

Shane Mayes, Founder, CEO Onshore Outsourcing

Rural/Impact sourcing guest speaker

3:30 to 4:20

Guest Speaker

Rich Etzkorn, Executive Managing Director,  Cassidy Turley

Real estate services outsourcing guest speaker



December 14


Guest Speaker

Dan Schulte, Executive Vice President, Revenue Cycle Solutions

The Outsource Group

Healthcare services outsourcing guest speaker





Do on your own


Transaction Attributes

Understand three main transaction attributes—Asset Specificity, Frequency, and Uncertainty—and how these relate to outsourcing choices.


Understand two behavioral assumptions of TCE—bounded rationality and vendor opportunism.


Understand main benefits and limitations of three governance choices: hierarchy, hybrid, and market.

Read REQUIRED: Practitioner Friendly Version of Transaction Cost Economics:  “Oliver’s Twist” in Globalization Today  (2010)


Read: OPTIONAL Williamson, O. (1991), “Comparative Economic Organization: The Analysis of Discrete Structural Alternatives,” Administrative Science Quarterly, Vol. 36, 2, pp. 269-296.


Do on your own


Sourcing Destinations: Offshore Outsourcing


Ability to identify major countries competing in ITO and BPO;


Understand how offshore outsourcing is different than onshore outsourcing in terms of risks and additional costs;


Best practices associated with engaging offshore providers.

Read:  REQUIRED: Rottman, J., and Lacity, M. (2006), “Proven Practices for Effectively Offshoring IT Work,” Sloan Management Review, Vol. 47, 3, pp. 56-63


Read: REQUIRED: Rottman, J., and Lacity, M. (2008), “A US Client’s Learning from Outsourcing IT Work Offshore,” Information Systems Frontiers, Special Issue on Outsourcing of IT Services, Vol. 10, 2, pp. 259-275.


Listen to Webinar Recording


Do on your own


Rural and Impact Outsourcing

Understand how rural providers select locations, attract, develop and retain human capital, and

create value;

Read:  REQUIRED: Lacity, M., Rottman, J., and Carmel, E. (2012),  Emerging ITO and BPO Markets: Rural Sourcing and Impact Sourcing, IEEE Readynotes, IEEE Computer Society, forthcoming




Listen to the Webinar recording

Due by

by Wednesday January 22 8am





January 24

1:30 pm to 2:20pm


2:30 pm to 3:20pm

Shared Services

Do on your own


Client Firm Capabilities

Identify the most studied and most frequently reported important client capabilities


Understand nine core client capabilities model


Understand evolution of back office functions

Read: The Outsourcing Enterprise: From Cost Management to Collaborative Innovation (2011),  CHAPTER 4


Listen to the Webinar recording

Do on your own


Provider Firm Capabilities

Identify the most studied and most frequently reported important provider capabilities


 Understand twelve core provider capabilities model


Understand emerging provider capabilities

Read: The Outsourcing Enterprise: From Cost Management to Collaborative Innovation (2011),  CHAPTER 3


Listen to the Webinar recording

Do on your own


Contractual Governance

Understand how to develop the financial case and pricing;


Understand the governance charter;


Understand contract management

Read: Outsourcing Professional Body of Knowledge, IAOP, Van Haren Publishing, CHAPTERS 6, 7 and 8


Read: The Outsourcing Enterprise: From Cost Management to Collaborative Innovation (2011),  CHAPTER on Governance 6.

Do on your own


Relational Governance

Understand what is meant by relational governance;


Understand Social Capital Theory and how it relates to ITO


Read: Lacity, M. and Rottman, J. (2008), Offshore Outsourcing of IT Work, Palgrave, United Kingdom, Chapter 4.


Listen to the Webinar recording

Due by Wednesday

February 19








1:30 am to 2:20pm

Cloud Computing

3:00 to 4:00

Guest Speaker  Rich Etzkorn, Executive Managing Director,  Cassidy Turley    Real estate services outsourcing guest speaker