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Outsourcing Governance
Abstract
The overall objective of this chapter is to concentrate on the important issues of strategy, structure, and management of IT outsourcing arrangements. First, we take a look at the broader issue of governance. Learning that IT outsourcing governance includes not only information and IT assets, but also such aspects as human, financial, physical, intellectual property, and relationship assets, we present in the next section the interaction approach as a model that focuses both on short-term episodes and general long-term relationships in dyadic buyer-supplier ventures. Then we discuss how appropriate governance structures – including management control systems and the development of trust – may work to reduce risk and decrease failure. We continue by presenting the important partnering process, where management can take actions when building and sustaining outsourcing relationships. Important stakeholder groups are presented as they may have distinct expectations and goals in outsourcing and for outsourcing relationships. Hard and soft sides of outsourcing management are presented, as both sides are keys to success. Finally, using theoretical perspectives described earlier and experience earned from several business case studies, we present a governance model for successful management of IT outsourcing relationships.
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