558 Part IV • The Information Management System
Recent IS research has also identified the importance
of not only an IS department’s skills in selecting an offshore
vendor but also the negotiation of contracts and ongoing
management of the offshore outsourcing relationship to
minimize offshore risks. Similar to the global IT manage-
ment challenges discussed earlier, offshore soutsourcing
arrangements also require careful assessment of the client
firm’s readiness to manage vendor relationships and
distributed work teams when working across cultures (see
box “Assessing Offshore Outsourcing Management
Capabilities”). Some IT projects are also more “culturally
neutral” and therefore require less cross-cultural under-
standing, such as embedded software application develop-
ment or middleware (Krishna et al., 2006).Summary
The IS leadership role has evolved as new technologies
and external events have increased the dependence on IT
for business operations and enabling strategic business
goals. IT is so pervasive today that decisions about IT
resources require business manager participation under
both centralized and decentralized governance designs.
Improved processes for IT service delivery and IT appli-
cation development, such as SLAs as well as support serv-
ices and control policies for user computing, have been
widely adopted. Portfolio management practices help
ensure new IT investments are aligned with business
goals. The increased globalization of companies has led to
an increased reliance on IT standards to integrate IT oper-
ations and applications.
Today’s IS leaders must not only determine the skills
needed by IS personnel but also the extent to which the organ-
ization should take advantage of external service providers,
both those operating in the same country and offshore. They
are measured not only on the delivery of IT services and proj-
ects but also their IS department’s contributions to improving
operational efficiencies and enabling business agility in
response to increasingly dynamic business environments.Review Questions
1.Why has the IS leadership role in organizations become so
important?
2.What benefits are associated with centralized governance of
IT resources, and how do these differ from those associated
with decentralized governance?
3.What are some of the IT service trade-off decisions that IT
leaders face today?4.What practices help ensure that the costs of providing an IT
service are aligned with the needs of business managers?
5.What are the key objectives for managing IT applications
from a portfolio perspective?
6.Compare the Acceleration and Containment strategies for
supporting user computing, and provide a rationale for why a
firm might choose one or the other.ASSESSING OFFSHORE OUTSOURCING MANAGEMENT CAPABILITIESCompanies that have had successful outsourcing experiences with domestic vendors need to recognize that managing
offshore vendors will require some additional skills and capabilities. Some of the questions that IS leaders in a client firm need
to consider are the following:- Do all the key organizational stakeholders impacted by this contract support outsourcing to an offshore vendor?
- Can we adapt to the business practices and norms in the vendor country and the vendor’s “way of doing things”?
- Do we need to invest in training programs for our staff to better understand any cultural differences and any best
practices to address them? - How can we best use Internet-based collaboration tools with this vendor?
- To what extent will the vendor provide personnel to be on-site at our company?
- Will we need to visit the vendor’s site on an ongoing basis to ensure good working relationships?
[Based on Lacity and Rottman, 2007; Ranganathan and Balaji, 2007]