The Rationale Behind Strategic Alliances in Application service Provision

Application service provision, which consists of deploying, managing, and remotely hosting software applications through centrally located servers, is emerging as a new form of application outsourcing that is attractive to many sectors. Partnering in this context has gained major importance among practitioners and researchers. Although this article demonstrates the importance of strategic alliances for the development of the ASP model, the included cases display relatively contradicting ideas, where in one of the two illustrated cases strategic alliances were not part of the business model. This article establishes a discussion on the pre-formation phase of strategic alliances, focusing on the rationale behind entering strategic alliances, and offers a set of guidelines for ASPs to consider when entering the partnering arena.

The Fifth Perspective

Today, alliances, collaborations, and networks are synonymous with strategy. Business process outsourcing (BPO) is one such type of alliance. With increasing reliance on outsourcing, the organizational boundaries are blurring. The implications for the client organization can be tremendous, as it now relies on an outside organization to fulfill its operational objectives. Currently, there is no single framework that can effectively measure performance for BPO arrangements. In its present form, the balanced scorecard (BSC) only addresses the performance measurement needs of a single enterprise and any perspective on any external relationships is completely missing. The traditional BSC does not suffice as a performance measurement framework for BPO. While both the client and the vendor can use a BSC for their respective organizations, the strategic objectives of the organizations may not be met. In this article the authors propose a new perspective as an extension to the BSC, namely, the goals alignment perspective. Goals alignment of the two organizations will enable creation of performance measures that will help participating organizations to achieve their respective goals.

Comparing China's and India's Evolution of Broadband Internet in the Developing World

Telecommunications networks of India and the People’s Republic of China are among the largest in the world. The two economies have a number of areas for broadband use ripe for exploration. Broadband networks in some regions in these two economies are even more developed than in some parts of the industrialized world. There are, however, a number of reasons to believe that these two countries may exhibit distinct and varied patterns of broadband diffusion. This chapter compares and contrasts the diffusion patterns of broadband technology in the two economies. We examine factors driving broadband diffusion in the two economies in three major categories: demand and cost conditions, industry structure, and export conditions.

Aligning Business Processes with Enterprise Service Computing Infrastructure

Multisourced and federated business operations and IT services are the backbone of today’s enterprise. However, in most companies, there exists a natural gap and disconnection between the decision and evaluation at the business level and the execution and metrics at the IT level. This disconnection can lead to end-user dissatisfaction, diminished profit, and missed business objectives. In this chapter, we study the problem of this disconnection and provide the following frameworks and techniques toward bridging the gap: (a) We provide a model-transformation framework that effectively transforms business-level decisions documented as businessprocess models into IT-level executable representations based on service-oriented infrastructure, (b) a framework is described that is able to monitor and synthesize IT-level performance and metrics to meet service-level agreements between business management and end users, and (c) techniques and experiments are discussed that enable dynamic adaptation of IT infrastructure according to business decision changes.

Strategic Management of International Subcontracting

Research on international subcontracting has been policy-oriented and industry-focused. There is a lack of understanding of the phenomenon from strategic management and international business perspectives. This article conceptualizes international subcontracting as a type of relational contract formed by buyers and suppliers from different countries, aiming to facilitate the sourcing of products or components with buyer-specific requirements. It builds a transaction cost model for studying the strategic choice of international subcontracting as an intermediate governance structure, sitting between arm’s length outsourcing arrangement and vertically integrated multinational enterprises (MNEs). A set of propositions are developed to aid future empirical research and to provide managers with some guidelines for organizing supply chain across borders. The model also allows managers to examine the complex nature of a range of subcontracting relationships and identify the specific mechanisms that can be used to preserve and manage the dyadic principal-subcontractor exchanges.

Outsourced IT Projects from the Vendor Perspective

As outsourced and multinational IT projects become more common, managing risks for these projects is increasingly important. The research reported here examines key risks identified by Hong Kong vendor project managers working on both local and international package implementation projects. In addition to the typical risks that threaten project outcome success, respondents noted location-specific risks on their multinational projects. They also distinguished threats to the satisfactory process of the project, and threats to their own firms from competitors and from potential damage to their reputation arising from customer dissatisfaction with either the outcomes or the process of the project. Using an agency theory perspective, this broader focus is examined in the light of differing definitions of project success for clients and outsource providers.

Building Trust in Globally Distributed Teams

Smith and Blanck (2002) claim that “an effective team depends on open, effective communication, which in turn depends on trust among members. Thus, trust is the foundation, but it is also the very quality that is most difficult to build at a distance” (p.294). Trust is “the willingness of one person or group to relate to another in the belief that the other’s action will be beneficial rather than detrimental, even though this cannot be guaranteed” (Child, 2001, p.275).

Outsourcing and Offshoring

Recently, outsourcing/offshoring has gained significant exposure in the popular as well as academic publications, with authors arguing the many different facets of the concept and its implications. The ongoing debates have revolved around issues related to cost of operations, benefits for outsourcing countries and countries that are recipients of outsourcing, the types of skills and associated unemployment, the types of industries that are being most effected, and even its political implications. This chapter discusses various issues related to outsourcing/offshoring and presents the findings of a research study (a survey of 364 individuals from 101 San Francisco Bay Area venture capital firms) attempting to validate (or disprove) some of the most widely discussed and presented points of view.

Government Insurer Enters the Brave New World

Governments provide a wide range of services, and the digital economy provides both threats and opportunities in this sector. The Transport Accident Commission (TAC) is a compulsory, government owned and operated insurance scheme for third-party, no-fault liability insurance for transport accident victims, operated in Victoria, Australia. E-business has now been widely used in all sectors from small business (Loane, McNaughton, & Bell, 2004) to emerging economies (Li & Chang, 2004), and in very different industry sectors (Cagno, Di Giulio, & Trucco, 2004; Golden, Hughes, & Gallagher, 2003). Major steps forward and applications have occurred in retailing (Leonard & Cronan, 2003; Mackay, Altmann, & McMichael, 2003; Starr, 2003). Applications need to be highly customized as the business-to-consumer (B2C) and business-to-business (B2B) environments are very different, and requirements of industries such as retailing and mining, and indeed government, differ substantially (Carter, 2003; He & Lung, 2002; Rotondaro, 2002). Government provides a particularly different environment for e-business applications because government services are often delivered in monopoly circumstances, with no real profit motive behind them. At the height of the technology boom in October 1999, Tony Marxsen joined the TAC as head of IT to develop a new IT outsourcing contract for the organization as the current 5-year contract was due to end in July 2000. He quickly realized that the TAC IT systems were out of date, lacked IT process integration, and were constraining improvement in business processes, and that no significant investments had been made for some time. Renewing or redesigning the outsourcing contract, the basis for which he had been employed, would only be a short-term solution. The problem was that the cost of new infrastructure would be high, and return on technology investment would mainly be realized from redesigned business processes enabled by the new technology. Tony wanted to propose a business transformation, with process changes as well as significant investment in IT infrastructure. Together, these would take the TAC from 1970s technology into the 21st century. The problem was that their (investments in such transformation) payoffs are not easily and quickly achieved. Their value does not come from installing the technology; it comes from changing both operating and management processes—perhaps operating and managing cultures too. (Ross & Beath, 2002, p. 53) Tony knew he would have to win the support of the board and senior management, but he could not immediately give them a concrete business case for the investment. He also knew that any infrastructure investment had to be linked with a major process-improvement initiative from the start to avoid the double investment of building new applications to support old processes, and then undertaking major modifications or even replacement when the need for improvement became obvious to the board and management team. He compared investing in IT infrastructure to rewiring and replumbing your house: as far as visitors are concerned, there’s no visible difference, everything’s behind the walls, but as the owner you get the benefits of things like cheaper electricity and water bills because of efficiencies in the new redesigned systems. The problem is convincing people that they will get these results in the future, but that they need to hand over the money now, when there’s no hard evidence for the benefits they’ll get, just a bunch of assumptions and no guarantees. It’s a big ask for any Board. (Marxsen, personal communication, September 4, 2003) Tony knew that the first hurdle he would have to overcome would be getting the board to agree to give him the opportunity to put together a team to develop a business case for the board’s further consideration.

Development and Use of the World Wide Web by US Local Governments

San Carlos, California (www.cityofsancarlos.org) claims to have developed one of the earliest local government Web sites in the world, posted on May 10, 1994 (San Carlos, 2006). From this early effort, United States (U.S.) cities moved rapidly onto the Web. Norris and Moon (2002), for example, report that some 4.4% of U.S. cities in a 2000 survey by the International City Management Association (ICMA) reported developing Web sites before 1995; 27.1% reported developing their Web sites in the 1995-’96 time period, and 68.5% reported their Web site developed after 1997. San Carlos’ original Web site comprised one page; its current Web site now contains some 8,000 pages and uses some of the Web’s most modern technology available, such as really simple syndication (RSS) and Flash Paper.1 This article uses the example of San Carlos’ Web site, along with two surveys of local government Web sites in the U.S., to illustrate the experience that U.S. local governments have had in developing and using Web sites in the pursuit of bettering governance. The article examines four local government Web applications—bulletin boards, promotions, service delivery and citizen input—and assesses their use by U.S. local governments. The article then addresses current issues of outsourcing Web site design and maintenance, and future issues of privacy, security, the digital divide and the possible effects of increased local government Web sites on U.S. civil society.