Outsourcing has become an increasingly important issue for many organisations. This book provides a framework for an up-to-date understanding of the outsourcing process and the key issues associated with it. It integrates a number of contemporary topics including benchmarking, buyer-supplier relationships, organisational behaviour, competitor analysis, and technology influences. The analysis draws upon both empirical research and real case studies. The author starts by providing guidelines as to when outsourcing is appropriate and what its implications will be, before moving on to explain how outsourcing is implemented. The benefits of both successful outsourcing and the risks and consequences of outsourcing failure are outlined. The book is ideal for use by postgraduate students studying the area of outsourcing. It would also benefit industry managers who are considering outsourcing or who already have outsourcing programmes in place.

List of figures

viii

List of tables

x

List of illustrations

xi

Acknowledgements

xii

Introduction

1

(5)

The trend towards outsourcing

6

(34)

Introduction

6

(1)

An overview of the outsourcing concept

7

(3)

Changes in the business environment driving outsourcing

10

(8)

Evolving organisation structures

18

(3)

The potential benefits of outsourcing

21

(2)

The risks associated with outsourcing

23

(3)

Inter-organisational relationship configurations

26

(14)

Theoretical influences on outsourcing

40

(23)

Introduction

40

(1)

Transaction cost economics

40

(4)

The resource-based view of the firm

44

(7)

The industry view

51

(3)

The relational view

54

(3)

Integrating the theoretical influences into outsourcing evaluation and management

57

(6)

The outsourcing process: a framework for evaluation and management

63

(27)

Introduction

63

(1)

Practical problems with the outsourcing process

63

(5)

Background to the development of the outsourcing framework

68

(2)

A description of the stages in outsourcing evaluation and management

70

(13)

Implications for theory

83

(7)

Determining the current boundary of the organisation

90

(25)

Introduction

90

(5)

Value chain analysis

95

(3)

The value chain

98

(2)

The value shop

100

(3)

The value network

103

(5)

Business process perspective

108

(2)

Depth of analysis

110

(5)

Activity importance analysis

115

(31)

Introduction

115

(1)

Background to the importance level analysis

116

(6)

Understanding the competitive environment

122

(5)

Understanding the value concept

127

(8)

The critical success factors (CSFs) methodology

135

(11)

Capability analysis

146

(37)

Introduction

146

(2)

Analysing the type of advantage

148

(31)

Analysing the source of advantage

179

(4)

An analysis of the strategic sourcing options

183

(35)

Introduction

183

(1)

An analysis of the disparity in performance

184

(6)

Technology influences

190

(2)

External considerations

192

(4)

Supply market risk

196

(4)

Behavioural considerations

200

(6)

The implications of the strategic sourcing options

206

(12)

Developing the relationship strategy

218

(27)

Introduction

218

(3)

Establish objectives for outsourcing

221

(2)

Supply relationship strategy

223

(13)

Supplier development

236

(9)

Establish, manage and evaluate the relationship

245

(31)

Introduction

245

(1)

Supplier selection

246

(4)

Contracting issues

250

(9)

Managing the relationship

259

(5)

Relationship performance evaluation

264

(12)

Case study -- outsourcing experiences at Telco

276

(35)

Introduction

276

(1)

An overview of Telco

276

(3)

Developments in the telecommunications industry

279

(2)

The impacts on Telco

281

(1)

Strategy formulation at telco

282

(2)

Outsourcing evaluation and management cases at Telco

284

(7)

Relating the cases to the outsourcing framework

291

(5)

Discussion

296

(8)

Going modular at Telco

304

(4)

Concluding comments

308

(3)

Conclusions

311

(10)

Introduction

311

(1)

Practical lessons

311

(5)

Future developments

316

(5)

Index

321

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