Outsourcing

Cooperative Sourcing

During the last decade, financial firms started to bundle their IT activities and business functions, such as payments processing or securities administration, in shared-service organizations, such as transaction banks or "credit factories". One research field of our department focuses on such "cooperative sourcing" activities. What are the benefits and disadvantages (a cost and competition analysis)? How need the resulting savings to be distributed among the cooperation members to guarantee stable coalitions? Which market equilibria and trends can be expected under different market conditions and regulations? While the first question needs empirical work, the latter are addressed by game theoretical analyses and simulations (agent-based computational economics). The game-theoretical analyses are accompanied by experiments with students who get engaged in lab-based negotiation games. Based on the experiment results, we can analyze the impact of individual decision factors and behaviors on the explanative power of formally deduced results regarding the existence and efficiency of coalition equilibria.

Outsourcing Relationship Management

A second part of our outsourcing research addresses the question on how to effectively manage the outsourcing relationship between vendor and client. We extend previous research on how to achieve business/IT alignment in a firm to inter-organizational relationships between firms and their IT service providers. What are the relevant dimensions of outsourcing relationship quality? How can they be influenced? Besides case studies in large European firms and surveys in the German banking industry, we use Social Network Analysis (SNA) to detect interaction patterns between managers and staff from vendor and client side which are more beneficial than others.

Nearshoring Management

In a case study series, we currently investigate the role of geographic distance and cultural differences in the Nearshoring context. Many firms have outsourced parts of their IT function to providers in Eastern Europe. We examine which particular problems exist in these engagements and how they can be mitigated by management actions. Our case studies embrace a variety of types of outsourcing arrangements, ranging from infrastructure support to software development, between client companies in, e.g., Germany and their Eastern European IT partner firms. The case study series will be followed by a questionnaire-based survey among Eastern European providers and their Western European clients. More details concerning this research project can be found here.

A list of our outsourcing-related publications can be found here.

Selected Publications