effects of initial and ongoing trust in it outsourcing: a bilateral perspective by jae-nam lee ,...
DESCRIPTION
outsourcing contracts are often very complex, it is difficult to include all rules and agreements in the contract. interactions between the participants often go beyond rules and exceptions and depend on intangible factors ,such as trust and commitmentTRANSCRIPT
J O U R N A L A R T I C L E P R E S E N TAT I O N :
CMGB 6322
Strategic Information Systems
Prepared by:
Alireza Khosroyar
Effects of initial and ongoing trust in
IT outsourcing: A bilateral perspectiveBy Jae-Nam Lee , Byounggu Choi
CMGB 6322-Strategic Information Systems
E F F E C T S O F I N I T I A L A N DO N G O I N G T R U S T I N I T O U T S O U R C I N G
PRESENTATION OUTLINE
• Introduction
• Theoretical Development
• Methodology
• Research Findings
• Managerial Implications
CMGB 6322-Strategic Information Systems
E F F E C T S O F I N I T I A L A N DO N G O I N G T R U S T I N I T O U T S O U R C I N G
Introduction- Background
• the global outsourcing market :
– US$340 billion in 2007,– increase to US$509 billion by 2012, – annual growth rate of 8.4%
• However, there have been few reports about its successful ROI.
• outsourcing contracts are often very complex, it is difficult to include all rules and agreements in the contract.
• interactions between the participants often go beyond rules and exceptions and depend on intangible factors ,such as trust and commitment
• More flexible relationship more trust
CMGB 6322-Strategic Information Systems
E F F E C T S O F I N I T I A L A N DO N G O I N G T R U S T I N I T O U T S O U R C I N G
Introduction – the importance of this research
• Prior studies generally are cross-sectional but this research studies the change of trust over time.
• Outsourcing from the perspectives of both participants.
– Service receiver
– Service provider
CMGB 6322-Strategic Information Systems
E F F E C T S O F I N I T I A L A N DO N G O I N G T R U S T I N I T O U T S O U R C I N G
Theoretical Development
• Initial trust vs. ongoing trust– Trust is a dynamic process.
• Example: Team cohesion
– it is process-oriented rather thanoutcome- or input-oriented concept.
• Initial Trust : is not based on any prior experience but on an assumption.
• Ongoing Trust : result from observing actual interaction . – It is likely to be modified over time due to
experiences and interactions with partners.
tendency of a group to remain united
CMGB 6322-Strategic Information Systems
E F F E C T S O F I N I T I A L A N DO N G O I N G T R U S T I N I T O U T S O U R C I N G
Theoretical Framework
CMGB 6322-Strategic Information Systems
E F F E C T S O F I N I T I A L A N DO N G O I N G T R U S T I N I T O U T S O U R C I N G
Research Methodology
415 After Eliminating
missing data
455 service receivers
responded (85%)
535 firms were
willing to participate
Phone call to 1750
Service receivers : 2000 large listed firms
215 After eliminating
missing data
232 responses
were received
Service Provider:
340Phase1 , Service Receiver
Phase 2 , Service Provider
189
After elimination
205
Received
340 Questioners
Sent
Phase2 , Service Receiver
148
After elimination
169 received
Phase1 , Service Provider
Phase 1 :
Phase 2:
CMGB 6322-Strategic Information Systems
E F F E C T S O F I N I T I A L A N DO N G O I N G T R U S T I N I T O U T S O U R C I N G
Findings
Service Provider Perspective
Service Receiver Perspective
CMGB 6322-Strategic Information Systems
E F F E C T S O F I N I T I A L A N DO N G O I N G T R U S T I N I T O U T S O U R C I N G
Managerial Implications
the role of ongoing trust and distrust is significant in understanding the success of IT outsourcing initiatives.
knowledge sharing would draw both the provider and the receiver together in a shared vision and provide a common goal.
increasing initial trusting belief
minimizing initial distrusting
belief
Forming appropriate
favorable expectations
Fostering an environment
that encourages ongoing positive
belief
SuccessfulOutsourcing