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Palgrave Macmillan

Managing Change in IT Outsourcing

Towards a Dynamic Fit Model

ISBN 9781137030450
Publication Date December 2012
Formats Ebook (PDF) Ebook (EPUB) Hardcover 
Publisher Palgrave Macmillan
Series Technology, Work and Globalization

IT outsourcing is considered a mature business strategy that provides an exquisite opportunity to quickly cater to changing market circumstances. Due to the extensive growth of outsourcing client IT functions in the last decade, a new provider industry has developed rapidly. As a result, the IT landscape is becoming more varied, with different outsourcing arrangements. Considering the multidisciplinary character of outsourcing, providers experienced with that arrangement complexity have increased substantially.

Providers have to deal with various aspects such as strategy, capabilities and organizational structures. These aspects will clearly affect the providers' organizations and their performance towards their clients. Thus, starting an outsourcing venture means starting a change that requires adaptive behaviour. This involves the capability and willingness of the providers' employees to support this change. In the next decade, the most important challenge for providers will be to manage this change in order to provide a sustainable performance for their clients.

Few studies in the field of IT outsourcing relations include the role of service providers in sourcing arrangements. Previous research has identified a provider's lack of sustainability in service performance as a recurring problem, that is the continuous delivery of high quality services over time. It can be argued that IT outsourcing providers who manage to establish a dynamic fit between sourcing capabilities and their own organizational structure are less susceptible to changes in their clients' environment. The author of this volume selects three provider organizations and uses evidence from these cases to highlight that a link between sourcing capabilities and organizational structure contributes to a positive sourcing performance. His research reveals that providers who are able to adapt to changing client circumstances, whilst establishing a fit, succeed in achieving a sustainable performance.

ALBERT PLUGGE has held a part-time position at Delft University of Technology, the Netherlands, where he studies the field
of outsourcing, since 2005. He received his PhD in IT outsourcing in 2011 from the same university. Currently, he is a Senior Research Fellow there, in the Faculty of Technology, Policy and Management (Information and Communication Technology section).

List of Tables
List of Figures
Managing Change
Preliminary Research
Case Study: Domestic Provider
Case Study: Offshore Provider
Case Study: European Provider
Case Study: Global Provider
Cross-case Analysis
Quantitative Results
Appendix A: Research Methodology
Appendix B: Preliminary Research: Overview of Interviewees
Appendix C: Preliminary Research: Interview Questions
Appendix D: Main Research: Overview of Interviewees
Appendix E: Main Research: Interview Questions
Appendix F: Main Research: Interview Extracts
Appendix G: Survey Questions


'Many books have been published on IT outsourcing; however, the vast majority of them assume a client perspective, shedding little light on how IT providers develop their strategies and compete in this fast growing industry. Based on original research and his extensive experience in the outsourcing industry, Albert Plugge offers in this book a detailed account of the provider side in IT outsourcing relationships. This book is a must read for managers and executives from the client, provider and intermediary organizations attempting to strike a 'win-win' outcome.'
Prof. Dr. Ilan Oshri, Loughborough School of Business and Economics
'Based on actual case studies and extensive research, Albert Plugge has produced a valuable resource for continuously adapting outsourcing services to changing internal and external conditions in the client organization. One of the enduring challenges of outsourcing relationships for the past twenty-five years is how to provide sustained business value as the market conditions change and demand fluctuates for the client organization. Albert Plugge's dynamic fit model is a creative design and adaptation process that directly addresses that challenge and takes us way beyond traditional outsourcing management approaches. This book is a comprehensive and valuable outsourcing reference for both service providers and client companies concerned with improving outsourcing services over time. It is destined to become a 'must-read' for all executives and IT service delivery managers in the outsourcing business.'Dr. Wendell O. Jones, Outsourcing pioneer and Thought Leader
'Albert Plugge is an aspiring academic in the field of IT outsourcing. His book Managing Change in IT Outsourcing intertwines his know-how as sourcing professional at KPMG and his experience as a researcher at the Delft University in the Netherlands. In the face of globalization, changing industry economics, and intensified competitive pressures, appropriate outsourcing of IT capabilities may help to drive down costs, to improve the IT infrastructure, and to focus on core competencies. However, formulating and running an effective IT outsourcing strategy is challenging and outsourcing agreements fail to deliver the desired outcomes often. Against this background, Dr. Albert Plugge conducted studies with onshore, offshore, and global IT providers and provides the reader with in-depth insights of outsourcing field cases. Providers and client organizations will not only learn about current challenges in globally distributed IT service provisioning, but also how to improve the performance of their outsourcing activities. Everybody involved in IT outsourcing will appreciate this book. It is an inspired piece of work and of high interest for academics and practitioners.'Prof. Dr. Armin Heinzl, University of Mannheim
'In this book Albert Plugge has explored one of the most thorny and least understood sides of the outsourcing relationship: the viewpoint of the vendor. We all know that the relationship between the client and the vendor is a critical factor in the success of any outsourcing arrangement, but how to manage this relationship is not well understood. Dr. Plugge has focused on the vendor side of the equation noting that for relationships to be successful, it is imperative that both sides understand and acknowledge what each other wants to obtain from the arrangement. In this research, he not only explores this issue via a number of case studies, but a large scale survey was undertaken. The combination of such qualitative and quantitative research components is unusual as it requires considerable effort, skill and time on the part of the researcher. Albert Plugge needs to be commended for the comprehensive research he has done, and for its contribution to understanding outsourcing relationships. The work is thorough, well founded and very actionable. It is a model of what we in academia should strive for.'
Prof. Dr. Rudy Hirschheim, Ourso Family Distinguished Professor at Louisiana State University
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