paper written by wendy du and shan l. pan todd cook

Boundary Spanning by Design:Insights From a Vendor Perspective

Presented by Todd Cook

Paper written by Wendy Du and Shan L. Pan

Todd Cook

IT Outsourcing IT Outsourcing Mechanisms Boundary Spanning Strategy Case Study: Carta Corporation Case Study: Magma Global Support

Center Conclusion Quiz

Introduction

IT outsourcing is expected to reach $160 billion by 2012

Outsourcing needs to meet the objectives of both the client and the vendor

Issues arise from opportunistic behavior, conflicts, and boundaries

IT Outsourcing

Client Decreases transaction/production costs,

increase access to advance technologies, and focus on strategic competence

Vendor Focus on project quality and efficiency,

access domain knowledge of the client, and improve its market reputation

IT Outsourcing

IT outsourcing mechanisms are broken into 4 categories Organizational control, partnership

management, contract management, and boundary spanning

Used to prevent and control conflicts that may arise

IT Outsourcing Mechanisms

Organizational control Reconciles conflicts between

stakeholders and marshal resources in the same direction

Contract management Limits opportunistic behavior between

vendors and clients Often invokes partnership management


Partnership management Used to complement contract

management due to complications in ITO relationships

Boundary spanning Collaborate on sharing knowledge across

vendors and clients


Boundary Spanning Strategy

Discussed at both the organizational-level and the group-level Groups are the major units that handle

communication Interaction and communication primarily

occurs at the group level within an organization


Occupational boundaries and language and cultural boundaries are problematic Vendors and clients may have different

levels of technical and communication expertise

There are three types of boundary spanning strategies Based on orientation, content, and

structure

Orientation▪ Respond to and anticipate the environment

Content▪ Professionally-driven and socially driven

strategies Structure▪ Narrow-engagement strategy and broad-

engagement strategy invoke spanners▪ Spanners operate on the periphery to act as

an intermediary between the organization and the elements outside of it


Narrow-engagement strategy Having a limited number of boundary

spanners can increase efficiency and reduce errors

Broad-engagement strategy Sharing of boundary spanning roles may

reduce workload on individual spanners and may offer more opportunities for information

Assigns as many spanners as possible to the client


Boundary spanning strategies are patterns of activity that a group or organization demonstrates over a period of time

CTT

T

T

T


Narrow-Engagement Strategy

Vendor Client


CT

CT

CT

Broad-Engagement Strategy

Vendor Client

TCT

Technical expertise

Technical and communicative expertise

Carta Corporation

17 years ago Carta Corporation was a small startup company with fewer than 10 employees Originally a software and network

research lab Today, Carta Corporation is a leading

Chinese IT provider with over 15,000 staff and 9,000 clients worldwide

Carta Corporation

Utilized boundary-spanning practices to bridge a strategic partnership between Carta and Aldo corporation, a leading Japanese electronics company

Boundary spanning practices evolved into three phases

Phase 1: 1991-1996 Recruiting engineers with advanced

technical abilities Carta sought help from parent company

North University to lobby research labs to partner with or join Carta

Acquired a management information lab and a virtue networking research lab both with about 25 experienced engineers

Carta Corporation

Phase 2: 1996-2000 Restructuring the communication model▪ Communications between key clients was

handled primarily by engineers▪ Improved communication skills or replaced

engineers▪ Engagement level reduced to a Window

Project Manager▪ Only Window Project Manager communicated

between client and engineering team

Carta Corporation

Phase 3: 2000-present Further enhancing engineers’ abilities▪ By 2003 Carta outsourced $30 million in

business▪ Started to recruit low-cost fresh graduates

well trained in coding▪ Built own IT institute▪ 3 campuses with over 25,000 students

Carta Corporation

Magma Global Support Center

A subsidiary of Magma AG best known for its enterprise resource planning

Has 47,000 employees in over 120 countries

Consolidated small local support centers into large-scale global support centers in countries with low labor cost

Phase 1: 1997-2004 Creating a communication model▪ Complexity and lack of trained personal

caused major problems at the China support center▪ Developed message-solving mechanism

which allowed consultants to interact directly with clients▪ Allowed for faster response times and a joint

effort to resolve issues


Phase 2: 2004-2008 Recruiting engineers with technical and

communicative abilities Located recruiting offices in Dalian and

Shanghai to have access to high-end consultants

Sponsored a double-major program at a top university to top students

Recruited over-seas Intensive training program with the MS

mechanism and technical areas


Phase 3: 2008-present Further enhancing the communication

model▪ Implemented the Support Advisory Center

team to proactively engage clients▪ Surveyed clients to raise issues and log

messages▪ Eliminates issues before they emerge


Carta Corporation

CTT

T

T

T

CT

CT

CT


Boundary Spanning Capability

Polarized CapabilityMost employees have technical ability but

lack communicative ability. The recruitment targets engineers and training focuses on

technical knowledge

Ambidextrous CapabilityMost employees have both technical ability and communicative ability. The recruitment

targets on ambidextrous employees and training focuses on both technical and

communicative abilities

Narrow-Engagement Strategy Broad-Engagement Strategy

Carta Magma

Vendor VendorClient Client

Magma AG


Both information assimilation and releasing are channeled and guarded

by the Window. Internal engineers remain isolated from the client

Everyone is assigned a role as the boundary spanner. They are contacted

based on their experience and the area of the issue. Everyone can

communicate with the client who can communicate with multiple

consultants

Carta Magma

CTT

T

T

T

CT

CT

CT

Narrow-Engagement Strategy Broad-Engagement Strategy

Vendor VendorClient Client

ITO is a thriving industry which shows strong future growth

Many conflicts may arise during the course of an ITO agreement due to cultural and communication boundaries

Boundary spanners can be used to span the differences and improve communication and efficiency

Conclusion

Conclusion

Boundary spanning has two important themes Boundary spanner▪ Intermediaries between the organization and

the elements outside of it Boundary spanning strategy▪ Narrow-engagement or broad-engagement

strategies that are professionally or socially driven by organizations that respond to and anticipate the vendor-client environment

Quiz

Which of the following statements are true statements?

A) Partnership management reconciles conflicts between stakeholders and marshal resources in the same direction

B) Organizational control complements contract management

C) Boundary spanning is a collaboration of knowledge sharing across vendors and clients

D) None of the aboveE) All of the above

paper written by wendy du and shan l. pan todd cook

Documents

client slide

organization slide

partnership management

structure slide

communicative expertise

types of boundary

utilized boundary

market reputation slide