Comparative study of critical success factors in outsourcing of information systems between the Netherlands and Indonesia | |
| Author | Norbertus J. Untarto |
| Call Number | AIT RSPR no.SM-98-60 |
| Subject(s) | Information storage and retrieval systems Information technology--Contracting out |
| Note | A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration. School of Management |
| Publisher | Asian Institute of Technology |
| Series Statement | Research studies project report ; no. SM-98-60 |
| Abstract | Outsourcing is exploding and, in some cases, imploding. The dimensionality of outsourcing is also changing. Originally the media was filled with stories focusing on the data center. After that, activity centered on networks and the telecommunications infrastructure, followed by help desks and workstation support. The latest area of heightened activity appears to be in the area of applications development and support. Although the outsourcing concept is expanding into more areas, it is critical to leverage to leverage lessons learned from the dynamic of outsourcing agreements now in progress. The most startling lesson is that good intentions and a 600-page contract are not enough to ensure the success of outsourcing agreements. The corollary to this lesson is that a successful agreement requires that all parties to it be successful. In other words, squeezing the last dollar out of a provider by negotiating a tough contract is not in the best interests of the overall success of the deal. Another key lesson stems from the propensity for change. Although outsourcing agreements typically are specified in multiyear terms, flexibility must be built into the arrangement. In addition, most agreements contain backward-looking performance measures that specify penalties and rewards after the fact; if predetermined targets are not hit by the end of some time period, money changes hands. Such systems are, by design, sources of frustration and friction. The true lesson is that no organization wants to end up in the penalty box. An agreement is successful if objectives are met, not if penalties are paid. Quite simply, outsourcing agreements must specify results and expected outcomes in basic business terms and contain the tools for continuous assessment of whether the agreement is operating in a zone that provides expected levels of performance and value. Moreover, the success of outsourcing is not only depends on the ability of vendors to overcome their critical success factors but on the other sides, clients should also be able to overcome their own critical success factors. Only if both sides win, we can say that outsourcing is success. From this research study, I also found some differences on the critical success factors between the Netherlands and Indonesia -for vendors and clients- and eventhough, some of the critical success factors might be the same, the practices and the underlying reasons behind it is quite difference due to the difference in culture, level of knowledge, awareness and the business requirement of each country |
| Year | 1998 |
| Corresponding Series Added Entry | Asian Institute of Technology. Research studies project report ; no. SM-98-60 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Kim, Sanghoon |
| Examination Committee(s) | Buchel, Bettina ;Johri, L. ;Truong Quang |
| Degree | Research Studies Project Report (M. Sc.) - Asian Institute of Technology, 1998 |