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KAKABADSE, N. AND KAKABADSE, A. 2000. Outsourcing: A Paradigm Shift. Journal of Management Development 19, 8, 670-728.
The article provides a literature review and identifies the current trends in outsourcing [not offshore outsourcing] as of the year 2000, considering both economic analysis and management and leadership issues. The bibliography is extensive, but both the literature cited and the issues studied are beginning to show their age.
Topics include the analysis of scale economies and strategic sourcing as principal reasons for outsourcing; the move from outsourcing single functions to outsourcing entire processes; the change in decision-making from the hands of the IT manager to the CIO, CFO, or CEO; the importance of keeping core activities in-house; global competition, downsizing, flatter organizational structure, technological change, and emphasis on core competencies as drivers of outsourcing; the willingness to outsource when services and goods become commodified; movement from a jack-of-all-trades to a suite of best-of-breed outsourcers; the rapid growth of data centers, client/servers, help-desk applications, and business process as outsourced functions; the importance of the quality of vendor-client relations; the opportunities for applications and business service providers supplying their products and services online; the opportunities provided by outsourcing to have access to technical talent, stabilize or lower overhead costs, and provide flexibility under changing market conditions; the disadvantages of outsourcing such as becoming dependent on outside suppliers, losing control over critical functions, managing relationships when things go wrong, and morale of employees; the limited satisfaction of clients who outsource because of underestimation of time and skills needed to manage outsourcing contracts, unrealistic expectations concerning outcomes, lack of ownership clarity, unsatisfactory delivery of services, uncooperative vendor behavior, excessive costs of the service, and loss of a competitive advantage in the marketplace; and the harm outsourcing may cause to the client's organizational culture.
KALITA, S.M. 2005. As Government Cap on Work Visas Rises, So Does Confusion. Washington Post (April 8) E1.
The article describes the US H1-B visa program. Topics include the dispute over criteria for the 20,000 additional visas approved by Congress, the increasing demand for H1-B visas over the past year, the increased cost of the visas, and offshoring as an alternative to temporary workers under the H1-B visa program.
KARAMOUZIS, F. AND HALLAWELL, A. 2005. Fraud Case Focuses Unwelcome Attention on Indian Outsourcing. Gartner Research (April).
This brief paper analyzes the news of a significant fraud case in an Indian offshoring firm. 10 people, including former and current employees of the Indian firm MphasiS, were arrested for misappropriating more than $350,000 from customers of a large US financial institution. The article argues that, although this incident was highly publicized, it is unlikely to have a long-term negative effect on the Indian business process outsourcing industry. However, it calls for NASSCOM, local law enforcement, and the Indian government to take swift and decisive action. Five specific recommendations are given to companies that are sending BPO work offshore to help them minimize risks of this sort.
KATKALO, V. AND MOWERY, D.C. 1996. Institutional Structure and Innovation in the Emerging Russian Software Industry. In D. C. Mowery Ed. Institutional Structure and Innovation in Emerging Russian Software Industry. Cambridge University Press. New York, NY, 240-271.
From Amazon.com. "This is the first book to provide comparative research data on the software industry in three major parts of the world: the U.S., Japan, Western Europe, and the Russian Federation. It explores the reasons that some countries have had more success in software development than others. The research was conducted by a group of international experts in the software industry." The article provides the case of the Russian software industry.
KATSUNO, M. 2005. Status and Overview of Official ICT Indicators for China. Directorate for Science, Technology and Industry. STI Working Paper 2005/4. Organization for Economic Co-operation and Development (March).
This paper examines the state of statistics about ICT in China and analyzes the current state and trends in ICT in China. The paper does a good job of identifying the various government agencies and the statistics they collect. The Chinese government prevents collection of data by foreign organizations, and most Chinese private organizations base their studies on official government data. The government data is best on infrastructure and Internet use by individuals with some data on supply of ICT. There is little information on demand or on Internet usage. Although there is a software industry in China in the Zhongguancun area outside Beijing, there is little data available on this industry. The report also includes a brief history of the semiconductor, electronics, and telecommunications industries in China.
A.T. KEARNEY INC. 2004. The Future of Bay Area Jobs: The Impact of Offshoring and Key Trends.
The Bay Area Economic Forum, Joint Venture. Silicon Valley Network, the Stanford Project on Regions of Innovation and Entrepreneurship, and A.T. Kearney have joined to provide an in-depth regional analysis of companies in the Bay Area who choose to offshore, the reasons behind this choice, and the impact on the economy.
A.T. KEARNEY INC. 2005. What to Move Offshore? Selecting IT Activities for Offshore Locations. (Available at www.atkearney.com/main.taf?p=5,3,1,73).
The study argues that most large US companies are now devoted to offshoring and have determined the location(s) and the particular provider(s). The most pressing issue in terms of providing competitive advantage is to identify what tasks to offshore. This article describes a process by which a company can make that decision. It includes identifying core functions and other functions that should not be offshored, for example, for regulatory or political reasons. It also involves considering logistical issues that change over time such as the nature of the market and the company's place in it. Inasmuch as these change over time, offshoring decisions need to be reconsidered with recommended intervals for reconsideration spelled out in the report. The report also provides a process for a company to use in identifying ways in which IT functions can be bundled, helping them to determine which to offshore and which to keep in house. Tasks for offshoring are often those that are not time sensitive, require minimal client or customer interaction, have limited reliance on intellectual capital, feature routine or standardized processes, do not involve secure data, and are large enough to produce a substantial benefit.
KENNEDY J. F. 2002. The Influence of Outsourcing on Job Satisfaction and Turnover Intentions of Technical Managers. Human Resource Planning, 23-31.
A questionnaire was completed by 469 low- to mid-level US Air Force engineering managers who performed a support function that was to be outsourced. These were people who were not in jeopardy of losing their jobs but the outsourcing had the potential to cause other significant changes such as change of job title, duties, or responsibilities; transfer to other installations; relocation of their family; or curtailing certain future career options. The study found that the outsourcing negatively influenced their job satisfaction and caused them to seriously consider leaving their jobs for employment in the public sector.
KENNEY, M. 2003. The Growth and Development of the Internet in the United States. In B. Kogut Ed. The Global Internet Economy. Cambridge University Press, Cambridge, UK, 69-108.
This article examines the US policies and investments that enabled the growth of the Internet. The pervasive nature of the Internet as a communications media is discussed along a multitude of dimensions. An analysis of the various experiments that are aimed at exploiting the Internet is also presented.
KENNEY, M. AND DOSSANI, R. 2004. The Impacts of Service Offshoring on Nonmetro America: Thinking About the Future. The Frederick H. Buttel Symposium at the Rural Sociological Society's 2004 Annual Meeting. Sacramento, CA (Aug.).
This paper applies various concepts about offshoring that the authors have uncovered in their work on India to the prospects for offshoring to succeed in rural locations in the United States. The portrait they paint is negative but not completely bleak. Four reasons that service operations had been moved to rural US areas are that labor costs are lower, there are fewer discipline problems compared to urban areas, land and facility costs are lower, and telecommunications has become of acceptable quality through the installation of digital branch office switching. None of these were able to hold up against outsourcing to foreign countries such as India and China. The one enduring advantage of rural America over the foreign competitors is linguistic quality and cultural similarity to the users. The jobs that were outsourced to rural America in the first place were ones that were "non-sticky", i.e., jobs that did not depend highly on that geographical location, and that made it more likely that these jobs would be lost to India or China. The authors recommend rural communities develop service activities that have a place-specific component that will make them somewhat immune to being transplanted.
KETLER, K. AND WILLEMS, J. R. 1999. A Study of the Outsourcing Decision: Preliminary Results. In Proceedings of the 1999 ACM SIGCPR Conference on Computer Personnel Research (SIGCPR'99) (April) New Orleans, LA. J. Prasad Ed. ACM Press, New York, NY, 182-189.
This paper provides preliminary reports from a study of corporate managers and IT managers in the United States about their firm's practices in outsourcing IT work (not specifically offshore outsourcing). The response rate was low - only 9% - so there is some question about the value of the results. Major conclusions are that 75% of the firms were outsourcing. Education and systems development were the tasks most often outsourced. Critical factors in deciding to outsource were cost savings, access to increased knowledge and expertise, and availability and quality of vendors. Loss of control, data security, and loss of in-house expertise were the major issues for companies choosing not to outsource, and some of these companies questioned the actual cost-savings compared to opportunities for cost-savings through downsizing, consolidation, or reorganization.
KING, J. 2005. Homegrown: IT Outsourcing Options Sprout Up Across Rural America. Computerworld (March 28).
This news article describes the alternative to offshoring - outsourcing in the rural United States, where tech labor prices are reported to be as low as one-third the prices in San Francisco. The US rural workforce is college-educated and, because rents and other costs are low, wages are low. Advantages are easy access by telephone to clients, there are no time zone issues, and few if any cultural issues exist between vendor and client.
KLETZER, L. 2001. Job Loss from Imports: Measuring the Cost. Institute for International Economics, Washington DC.
From IIE News Release, Oct. 11, 2001. Job Loss from Imports: Measuring the Costs by Lori G. Kletzer, the second publication in the Institute's Globalization Balance Sheet series, concludes that many American workers are concerned about trade-related job loss with good reason. Import-competing job loss is very costly. Vulnerable workers experience considerable difficulty regaining employment, and suffer large and persistent earnings losses upon reemployment…. This new study identifies who bears these costs and measures the size of the burden. It reveals that there is indeed job loss associated with import competition and that job loss is costly for many workers due to difficulties finding new employment at a level of pay similar to the old job. But these high costs are not unique to "trade-displaced" workers, as workers displaced from manufacturing jobs for other reasons incur similar costs. If workers and consequences are alike, across differing causes of job loss such as increasing foreign competition, technological change, downsizing, and restructuring, then policymakers should consider adjustment programs for all displaced workers and broaden eligibility for them beyond trade-displaced workers.
KLETZER, L. 2004. Trade-Related Job Loss and Wage Insurance: A Synthetic Review. Review of International Economics 12, 5 (Nov.).
The paper seeks to promote further integration of empirical and theoretical discussions of trade and worker adjustment. From the author's recent studies of the costs of job loss, she develops a set of stylized facts of trade-related job loss with a focus on worker characteristics and labor market consequences. These stylized facts are relevant to any credible model of trade liberalization and adjustment costs. The author discusses the basic ideas of wage insurance and summarizes the few data known about how a program might work if implemented in the United States. A final section provides a list of issues for a model of trade that will be consistent with the empirical stylized facts, and sets out questions for future research.
KLINGER, S. AND SYKES, M.L. 2004. Exporting the Law: A Legal Analysis of State and Federal Outsourcing Legislation. The National Foundation for American Policy, Washington, DC. (April).
The National Foundation for American Policy, founded in 2003, is a "non-profit, non-partisan organization dedicated to public policy research on trade, immigration and other issues of national importance." The report provides what it claims to be the first legal analysis of proposed and enacted US state and federal legislation attempting to restrict outsourcing. The authors are a partner and associate, respectively, in the Washington, DC law firm of Alston & Bird. Legislators in 36 states have introduced more than 100 bills restricting overseas outsourcing. There are numerous proposed pieces of federal legislation as well. Few have been passed into law as of yet. Many of the state legislative initiatives are on shaky legal ground because they intrude on the federal government's right to control foreign affairs under the foreign commerce clause of the US Constitution. Proposed federal legislation does not have this problem but it may well be in violation of various international agreements. Topics include state outsourcing legislation, state bans on performing public contract work overseas, state bills requiring public contracts to be performed by individuals authorized to work in the United States, state bills restricting call centers and sending data overseas, in-state or US-based company preferences in state contracting, state tax and budgetary incentive bills providing incentives to restrict outsourcing, state executive orders, federal outsourcing legislation, legislation to limit the transfer of data overseas, federal contracting bans, and the Thomas-Voinovich Amendment (limiting work done outside the country for executive agencies).
KNAPP, P. 2004. 1.2 Million European Jobs to Flee Offshore. Brainbox.com. (Available at http://Brainbox.com.au) (Aug. 24).
This news article summarizes a Forrester Research report that states that 1.2 million European jobs will be sent offshore in the next ten years with the technology sector to suffer the greatest losses. Reasons for offshoring to destinations such as Russia and India are also briefly summarized. The report identifies the United Kingdom as the European country that most embraces offshoring.
KOEHLER, E. AND HAGIGH, S. 2004. Offshore Outsourcing and America's Competitive Edge: Losing Out in the High Technology R&D and Services Sectors. Office of Senator Joseph Lieberman, United States Senate (May).
This report is an excellent introduction to the subject, especially the first half of the report, which describes the problem from a US perspective. There are strong statements about the need to collect good data. Topics include employment data for services and high-tech industries; current trends in offshoring of IT and IT enabled services; current trends in offshoring of high tech services, design, and R&D; why companies are going offshore; availability of communications and computer technologies; low-cost labor; large pool of educated labor; foreign investment and favorable business climate; time zones; international collaborations; proven and established offshore outsourcing processes; access and proximity to large markets; fiscal irresponsibility in the United States; key players in offshoring; India and China; and possible impacts of offshore outsourcing on the US economy and workforce. The last part of the paper presents a long set of potential remedies.
KOH, C., TAY, C., AND ANG, S. 1999. Managing Vendor-Client Expectations in IT Outsourcing: A Psychological Contract Perspective. In Proceeding of the 20th international Conference on information Systems. Charlotte, NC. (Dec.) 512-517.
The article discusses the psychological expectations that a vendor and client each hold when they enter into an IT outsourcing relationship. The authors interviewed clients and vendors and then conducted a quantitative study. The authors are all at the Nanyang Business School in Singapore. In the literature review, the authors pointed to previous work that argued that "in an outsourcing situation where a firm's employees are transferred to a service provider, the outsourcing firm (client) still retained the old mental schemas and continued to treat the outsourced employees in the same way." This persistence of expectations affected the degree of fulfillment of the contract. Their basic empirical result is that successful projects had more fulfilled vendor expectations and more fulfilled client expectations than unsuccessful projects. There was a statistically significant difference between a successful and a failed project on vendor expectations concerning client staffing, client staff turnover, knowledge transfer, client leadership, relationship building, client responsiveness, and project monitoring, but no statistically significant difference on project specifications, fair compensation, and prompt payment. The authors found a statistically significant difference between a successful and a failed project on client expectations concerning role clarity, vendor staffing, vendor staff turnover, knowledge transfer, vendor initiative, relationship building, vendor responsiveness, and soft deliverables, but no statistical difference on project scoping, project pricing, or project feedback.
KRISHNA, S., SAHAY, S., AND WALSHAM, G. 2004. Managing Cross-Cultural Issues in Global Software Outsourcing. Communications of the ACM 47, 4 (April) 62-66.
The article describes five years of in-depth case studies on cross-cultural issues in outsourcing in North America, Western Europe, and Japan by an Indian, Norwegian, and British faculty member. The article points to problems with communication (how formal, how much written versus oral) between people from the vendor and client countries, and in the cultural adaptation of the bridgehead teams working in the client companies (social behavior, attitudes towards authority, language issues). Strategic approaches to offshoring projects are discussed. Best are those that can be specified in a culturally relatively neutral way such as software embedded in operating systems or middleware. Many of the outsourcing companies want to take on projects that enable them to gain new expertise such as a new area application (banking) or move up the value chain from simple maintenance to higher levels of project involvement. Offshoring applications software is tricky and requires effective in-depth relationships between the two sides. (Germans-Asians have had trouble generally in this regard.) One can try to replace strong cultural match with careful relationship management, but it is difficult to achieve. Active management is always a key to success. Use of common control and reporting mechanisms, systems development methodologies, and computer hardware and software all help. One cannot expect to manage away major differences in norms and values such as attitudes about hierarchy and power or different business practices. One can build cross-cultural teams to provide a negotiated cultural perspective. This might involve using bridgehead teams that spend long periods on the client premises and exchange staff on a long-term basis. Another strategy is to use managers who bridge the cultures. Systematic on-the-job cultural training is not all that common, and training generally is seen as a one-way process for the software supplier to learn about the cultural practices of the client. Two-way training is best.
KRISHNADAS, K.C. 2004. India is Undisputed Offshoring Leader, Report Says. Electronic Engineering Times (March 29) 10.
Reporting on a Gartner Group study, India is by far and away the location of choice for outsourcing, followed by China and Russia. Poland, the Czech Republic, and Hungary are growing rapidly from a small base because of interest by Western European countries in more local offshoring ("near-sourcing").
KRISHNAN, T. 2005. Wake-Up Call in Order. The Hindu Businessline, the Web-based business section of The Hindu (April 18). (Available at www.thehindubusinessline.com/bline/ew/2005/04/18/stories/2005041800200300.htm").
In the United States, protests of job loss due to outsourcing have slowly died down only to be replaced with concerns for privacy and security issues. "The recent media spotlight over alleged theft by former employees of MphasiS' BPO arm, MsourcE, has rocked the BPO industry…. India does not have a comprehensive data protection law in place. No wonder, for the last few years, data security and privacy has been one of the key concerns of US-based financial services and telecom service companies offshoring voice-based customer care and support to India… If the BPO industry has to emerge unscathed from this, the industry, Nasscom, and the Government will have to swing into action on multiple fronts to make some fundamental changes to the way the industry operates." The four areas in which focus is imperative include law on data protection, legal enforceability of agreements, authentication technology, and screening candidates.
KRONSTADT, K.A. 2004. India, 2004 National Election. Congressional Research Service, Library of Congress, Washington, DC. CSR 2-3.
Summary from the report. U.S. relations with India depend largely on India's political leadership. India's 2004 national elections ended governance by the center-right coalition headed by Prime Minister Atal Bihari Vajpayee and brought in a new center-left coalition led by Prime Minister Manmohan Singh. Following the upset victory for the historically-dominant Indian National Congress Party led by Sonia Gandhi, Gandhi declined the post of Prime Minister in the new left-leaning United Progressive Alliance (UPA) coalition government, instead nominating her party lieutenant, Oxford-educated economist Manmohan Singh, for the job. As Finance Minister from 1991-1996, Singh was the architect of major Indian economic reform and liberalization efforts. On May 22, the widely-esteemed Sikh became India's first ever non-Hindu Prime Minister. The defeated Bharatiya Janata Party now sits in
opposition at the national level led in Parliament by former Deputy Prime Minister Lal Advani. A coalition of communist parties supports the UPA, but New Delhi's economic, foreign, and security policies are not expected to be significantly altered. The new government has vowed to continue close and positive engagement with the United States in all areas. This report, which will not be updated, provides an overview of the elections, key parties, and U.S. policy interests.
KUMAR, V. R. 2004. NetScaler to Double Headcount. (June 16). (Available at www.thehindubusinessline.com/2004/06/17/stories/2004061702170700.htm. Accessed Aug.).
From the article. NETSCALER India, part of the Santa Clara-based application networking systems and solutions company, is set to expand India operations by building upon networking products that it has developed locally and by doubling its headcount at the R&D centre based out of Bangalore.
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