IS 6891

IS 6891 - Seminar in Management Information Systems:

Management of Global Sourcing of Business and IT Services

PMBA-ESI SPRING 2011 (March 12 – June 2)

Course Description:

Largely fostered by the globalization of organizations and spread of the Internet, processing standards, and common software packages, organizations now regularly source business and 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 supplier selection and transition to outsourcing. The course also covers the client and supplier capabilities and contractual and relational governance that are needed to ensure good outsourcing outcomes for both parties. Although the course focuses on global sourcing of IT work because this is the most mature market, the global sourcing of other back office functions including finance, HR, procurement, real estate, legal, and other functions are also covered. Students will also investigate insourcing options such as shared services and captive centers and other emerging sourcing topics such as cloud computing, freelance outsourcing, and rural sourcing.

Course Instructor:

Dr. Mary C. Lacity
233 Computer Center Building
(314) 516-6127 (work)
(314) 516-6827 (fax)

Email: Mary.Lacity@umsl.edu
Homepage: http://www.umsl.edu/~lacitym

Course Instructor:

Dr. Mary Lacity is a Professor of Information Systems and an International Business Fellow at the University of Missouri-St. Louis. She is also Co-Chair of the IAOP Midwest Chapter, Industry Advisor for the Outsourcing Angels, Associate Researcher at The Outsourcing Unit, London School of Economics, Senior Editor of the Journal of Information Technology, Co-editor of the Palgrave Series: Work, Technology, and Globalization, and on the Editorial Boards for MIS Quarterly Executive, Journal of Strategic Information Systems, Strategic Outsourcing: An International Journal, and Journal of the Association for Information Systems (JAIS).  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 12 books, most recently China’s Emerging Outsourcing Capabilities (Palgrave, 2010; co-editors Leslie Willcocks and Yingquin Zheng); Information Systems Outsourcing: Theory and Practice (Palgrave, 2009; coauthor: Leslie P. Willcocks) and Offshore Outsourcing of IT Work, (Palgrave, 2008; coauthor Joe Rottman). More than 50 of 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. You must answer 70% of the questions correctly to pass.

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

http://www.iaop.org/content/23/193/1706/

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, videos, and pre-recorded lectures as posted on my gateway

Course Assessment Items:

Assessment Item	Percentage of Grade	Due Date
Exam I (Take Home)	25%	Tuesday, April 19 by 8:30am
Group Presentation	40%	See Schedule
Exam II (Take Home)	25%	Thursday, June 2 by 8:30am
Class Participation	10%

Oral Group Presentation:

The class will be divided into six groups. Each group is responsible for presenting a 60 minute presentation to the class. Each group will be assigned a different ITO/BPO topic:

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

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

Group 3: Insourcing Options: Shared Services or Captive Centers

Group 4: Emerging ITO/BPO Trend: Niche Sourcing to unlikely places

Group 5: Emerging ITO/BPO Trend: Cloud Computing

Group 6: Emerging ITO/BPO Trend: Freelance Outsourcing

RESEARCH BASE:

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:

IAOP homepage: http://www.iaop.org/

IAOP Midwest Chapter: http://www.outsourcingprofessional.org/content/23/162/1947/

Everest Research Institute http://www.everestresearchinstitute.com/

Technology Partners International: http://www.tpi.net/

LSE Outsourcing Unit: www.outsourcingunit.org

Journals devoted to outsourcing:

Academic Journal: Strategic Outsourcing: An International Journal

Globalization Today: http://www.globalizationtoday.com/

HRO Today Journal: http://www.hrotoday.com/

FAO Today Journal: http://www.faotoday.com/

Outsource Magazine http://www.outsourcemagazine.co.uk/

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 best source to find refereed journal articles is ABI-INFORM, available online to UMSL students. To find refereed articles, simply tick the box for “Scholarly journals, including peer-reviewed ” while in ABI inform. I will show you how to conduct a search if you need help.

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

Primary Resources. Students should conduct original interviews/case studies for their group projects. Case studies comprise original interviews and internal and external company documents, but refer to guidelines for your specific topic. Most students chose one or two organizations from among the group members' current or prior workplaces. We will learn about the “six degrees of separation”—with a little help and determination, a friend of the family or a friend of a friend may help students find relevant people to interview.

Another potential source of primary data is an original survey. For example, a past group surveyed 35 lawyers to see if they would outsource any legal work.

PRESENTATION TIMING:

Each group should spend their time in approximately the following way: (Again, some topics lend themselves to a slightly different format, so be sure to look at my links to your topic.)

Overview of the topic. Provide general statistics about your topic; 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? What will we learn from your presentation? (~10 minutes)

If you cite surveys, YOU MUST TELL US ABOUT THE SAMPLE in terms of size of organizations that participated (such as Fortune 500), geographic dispersion (such as U.S. or global), sample size, and date of data collection. You'll be surprised how surveys report very different figures because of sample diversity.

Case-based/Interview-based Data: Explain your topic using real organizations. Why did you select these organizations? How are they representative of the lessons you are trying to demonstrate? (~30 minutes)

Generalizations: Do a cross-case comparison of similarities and differences among the cases. Extract a set of lessons or best practices for the general manager; tie these lessons back to the case studies. The audience should be able to be very involved in this part of the presentation. (~10 minutes)

Each group should only plan 50 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 short survey, etc.

PRESENTATION MATERIALS:

Each group will develop power point slides.

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

Please load your final power point slides in your Group Pages under FILE EXCHANGE. Send your instructor an email when you are ready for me to make the power point slides available to your class mates. Your classmates may wish to print your group’s power point slides prior to class, so please have your slides finalized the week before your presentation. Please name the final version of your power point slides exactly as indicated below:

Group	Oral Presentation File Name File names are case sensitive
Group 1: BPO: Outsourcing Human Resources OR Financial & Accounting Services	G1pmbaesiS11.pptx
Group 2: BPO: Group Choice (Procurement Outsourcing, Claims Administration; Policy Administration; Legal Services—anything except HR or FAO)	G2pmbaesiS11.pptx
Group 3: Insourcing Options: Shared Services or Captive Centers	G3pmbaesiS11.pptx
Group 4: Emerging ITO/BPO Trend: Niche Sourcing to unlikely places	G4pmbaesiS11.pptx
Group 5: Emerging ITO/BPO Trend: Cloud Computing	G5pmbaesiS11.pptx
Group 6: Emerging ITO/BPO Trend: Freelance Outsourcing	G5pmbaesiS11.pptx

CITATIONS:

Make sure that every slide appropriately credits sources, be it an interview, printed material, or web site. Printed material should be referenced with Author, Year, Title, Journal (if appropriate), Volume, Number, and page numbers. For example:

Book:
Lacity, M., and Willcocks, L. (2001), Global Information Technology Outsourcing: Search For Business Advantage, John Wiley & Sons, Chichester.

Journal Article:

Rottman, J., and Lacity, M. (2008), “A US Client’s Learning from Outsourcing IT Work Offshore,” Information Systems Frontiers, Vol. 10, No. 2, pp. 259-275.

If your slides get too busy, then simply use end notes, such as embedding (1) on actual slide and attaching a list with numbers:

(1) Lacity, M., and Willcocks, L. (2001), Global Information Technology Outsourcing: Search For Business Advantage, John Wiley & Sons, Chichester.

(2) Rottman, J., and Lacity, M. (2008), “A US Client’s Learning from Outsourcing IT Work Offshore,” Information Systems Frontiers, Vol. 10, No. 2, pp. 259-275.

(3) Ibid, p. 184.

Websites:

Please indicate full URL for web site references, and date viewed. For example:

www.umsl.edu/~lacity/ms480sum.htm, viewed January 1, 2009.

Interviews:

Please indicate name (if not anonymous), title of interviewee, type of interview (in person, phone, videoconference), name of students at the interview, and date of interview. For example:

John Smith, CIO of BigCompany, interviewed in person by Jane Doe and Fred Davis, January 6, 2009.

Ian Jones, Director of Applications, BigCompany, interviewed by phone by Jane Doe and Fred Davis, February 8, 2009.

DO NOT PLAGERIZE!!!!

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.

I take this 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 as well.

Oral Group Presentation Grades:

Oral presentations are graded as a group grade rather than as individual grades. Oral group presentations will be graded using the following form: oral group grade form pmba

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 .

Exams:

The purpose of the exams is to make sure that you understood, can apply, and can critique the readings and lectures. The take-home exam will be distributed 11 days prior to the due date. I suggest you complete all the required readings prior to receiving the exam.

Exam 1 will cover the following modules: Overview of Outsourcing, What Suppliers Would Tell you if they Could, 20 years of Research, Motivations to Outsource, Transaction Attributes, Decision Process, Offshore Outsourcing and Rural Outsourcing.

Exam 2 will covers the following: modules Client Firm Capabilities, Supplier Firm Capabilities, Contractual Governance, Relational Governance, and six group presentations

How to Turn in Written Exams:

PLEASE USE ASSIGNMENT FEATURE IN MYGATEWAY.

Formatting Requirements for Written Assignments:

Please clearly mark each page with your name.

Please use font size 11 or font size 12 for normal text.

Please use one inch margins.

Please include page numbers.

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). There are no extra credit assignments.

Each exam has an assessment sheet that I will use for grading. By having access to this grading sheet for each exam, students will be better able to check that each exam meets requirements.

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 every thing they do should be given 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!

Course Schedule:

DATE:	Time	Activity/Module	Learning Objectives	Required Readings
CLASS Saturday, March 12	1:30pm to 3:30pm	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
	3:45pm to 5:30 pm	What Suppliers Would Tell Customers if They Could	Understand that most of what BPO suppliers say is supported by research and will ultimately benefit the customer.
READ! March 12 to April 11		20 Years of Outsourcing Research Summarized	Understand the determinants of outsourcing decisions; Understand the determinants of outsourcing outcomes	The meaty academic version: Lacity, M., Khan, S., Yan, A., and Willcocks, L. (2010), “A Review of the IT Outsourcing Empirical Literature and Future Research Directions,” Journal of Information Technology, Vol. 24, 4, pp. 395-433. OR The practitioner version: Lacity, M., Khan, S., and Willcocks, L. (2009), “A Review of the IT Outsourcing Literature: Insights for Practice,” Journal of Strategic Information Systems, Vol 18, pp.130-146.
		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	Outsourcing Professional Body of Knowledge, IAOP, Van Haren Publishing, CHAPTER 1
				The Outsourcing Enterprise: From Cost Management to Collaborative Innovation (2011), CHAPTER 1
		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.	Practitioner Friendly Version of Transaction Cost Economics: “Oliver’s Twist” in Globalization Today (2010), http://viewer.zmags.com/publication/a45f90bd#/a45f90bd/35
				Reading Classic: Williamson, O. (1991), “Comparative Economic Organization: The Analysis of Discrete Structural Alternatives,” Administrative Science Quarterly, Vol. 36, 2, pp. 269-296.
		Decision Process	Understand nine building blocks of the outsourcing life cycle. Ability to identify top global ITO and BPO suppliers; Appreciate how quickly country and supplier advantages change.	Outsourcing Professional Body of Knowledge, IAOP, Van Haren Publishing, CHAPTERS 5 and 6.
				Cullen, S., Seddon, P., and Willcocks, L., “Managing Outsourcing: The Life Cycle Imperative,” MIS Quarterly Executive, Vol. 4, 1, March 2005, pp. 229-246. (Also in Chapter 1 of The Outsourcing Enterprise.)
				IAOP List of Top Global Suppliers
CLASS Thursday, April 7	1:30 pm-3:15 pm	Transaction Cost Economics and other Theories of Outsourcing as they relate to practice	Understand how well TCE explains ITO; Understand other outsourcing theories and how these relate to ITO and BPO	Optional Reading : The Original Work: DiMaggio, P., and Powell, W. (1991), "The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields," in , (Powell & DiMaggio eds), The University of Chicago Press, pp. 63-82.
	3:30 pm to 4:30 pm	Guest Speaker: Real Estate Outsourcing	Rich Etzkorn, CPM, RPA Executive Managing Director, Principal Corporate Services, Cassidy Turley
	4:30 pm to 5:30pm	Guest Speaker: Value Health Check Survey	Matt Shocklee, President and CEO, Global Sourcing Optimization Services (GSOS), LLC; Global Ambassador-International Association of Outsourcing Professionals
CLASS Saturday, April 9	1:30 pm to 3:30pm	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 suppliers and rural suppliers.	Rottman, J., and Lacity, M. (2006), “Proven Practices for Effectively Offshoring IT Work,” Sloan Management Review, Vol. 47, 3, pp. 56-63 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.
EXAM DUE: Tuesday, April 19, 8:30am
CLASS: Thursday, May 4	1:30 to 2:30 pm	Group 1 Presentation	BPO: Outsourcing Human Resources OR Financial & Accounting Services
	2:45 to 3:45pm	Group 2 Presentation	BPO: Group Choice (Procurement Outsourcing, Claims Administration; Policy Administration; Legal Services—anything except HR or FAO)
	4:00 to 5:00pm	Group 3 Presentation	Insourcing Options: Shared Services or Captive Centers
CLASS: Saturday, May 7	1:30 to 2:30 pm	Group 4 Presentation	Emerging ITO/BPO Trend: Niche Sourcing to unlikely places
	2:45 to 3:45pm	Group 5 Presentation	Emerging ITO Trend: Cloud Computing
	4:00 to 5:00pm	Group 6 Presentation	Emerging ITO/BPOTrend: Freelance Outsourcing
READ! May 7 to May 27		Rural Outsourcing	Understand how rural suppliers select locations, attract, develop and retain human capital, and create value;	Lacity, M., Rottman, J., and Khan, S. (2010), “Field of Dreams: Building IT Capabilities in Rural America,” Strategic Outsourcing: An International Journal, Vol. 3, 3. pp. 169-191.
		Client Firm Capabilities	Understand nine core client capabilities	The Outsourcing Enterprise: From Cost Management to Collaborative Innovation (2011), CHAPTER 4
		Supplier Firm Capabilities	Understand twelve core supplier capabilities	The Outsourcing Enterprise: From Cost Management to Collaborative Innovation (2011), CHAPTER 3
				Optional reading: Feeny, D., Lacity, M., and Willcocks, L. (2005), “Taking the Measure of Outsourcing Providers,” Sloan Management Review, Vol. 46, 3, pp. 41-48. (The contents are replicated in Chapter 3.)
		Contractual Governance	Understand how to develop the financial case and pricing; Understand the governance charter; Understand contract management	Outsourcing Professional Body of Knowledge, IAOP, Van Haren Publishing, CHAPTERS 7 and 8
				The Outsourcing Enterprise: From Cost Management to Collaborative Innovation (2011), CHAPTERS 6, 7, and 8
		Relational Governance	Understand what is meant by relational governance; Understand Social Capital Theory and how it relates to ITO	Lacity, M. and Rottman, J. (2008), Offshore Outsourcing of IT Work, Palgrave, United Kingdom, Chapter 4.
EXAM DUE: Thursday, June 3, 8:30 am