Outsourcing At Office Supply

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Case Study: Outsourcing at Office Supply Inc.

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The case study of outsourcing at Office Supply (OSI) depicts many success factors for both the parties in ensuring good decisions and continuing a relationship based on mutual benefits. While outsourcing, OSI can determine its key success factors by achieving ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"CyplFiwm","properties":{"formattedCitation":"(Gottschalk and Solli\\uc0\\u8208{}S\\uc0\\u230{}ther)","plainCitation":"(Gottschalk and Solli‐Sæther)","noteIndex":0},"citationItems":[{"id":237,"uris":["http://zotero.org/users/local/2y0xTiQs/items/SENIUA6F"],"uri":["http://zotero.org/users/local/2y0xTiQs/items/SENIUA6F"],"itemData":{"id":237,"type":"article-journal","abstract":"Purpose – This research paper aims to identify and rank critical issues in IT outsourcing relationships. Design/methodology/approach – A total of 11 management theories were applied in this research: theory of core competencies, resource-based theory, neo-classical economic theory, transaction cost theory, contractual theory, agency theory, partnership and alliance theory, relational exchange theory, stakeholder theory, social exchange theory and theory of firm boundaries. The main method used is case studies and survey. Case studies were conducted in three IT outsourcing relationships: ABB-IBM, SAS-CSC, and RR-EDS.","container-title":"Industrial Management & Data Systems","DOI":"10.1108/02635570510606941","ISSN":"0263-5577","issue":"6","journalAbbreviation":"Industr Mngmnt & Data Systems","language":"en","page":"685-702","source":"DOI.org (Crossref)","title":"Critical success factors from IT outsourcing theories: an empirical study","title-short":"Critical success factors from IT outsourcing theories","volume":"105","author":[{"family":"Gottschalk","given":"Petter"},{"family":"Solli‐Sæther","given":"Hans"}],"issued":{"date-parts":[["2005",8]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Gottschalk and Solli‐Sæther):

The anticipated reduction in cost

Key performance indicators

Effective implementation of the processes

Expected process improvements in the initial stage

Raised business dexterity

Adaptability to the change and increased innovation

Customer satisfaction

However, the factors which determine the success of TIS are as following ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"rE6ZGqhK","properties":{"formattedCitation":"(\\uc0\\u8220{}The IT Outsourcing Guide | Wiley\\uc0\\u8221{})","plainCitation":"(“The IT Outsourcing Guide | Wiley”)","noteIndex":0},"citationItems":[{"id":247,"uris":["http://zotero.org/users/local/2y0xTiQs/items/WRCHBZP7"],"uri":["http://zotero.org/users/local/2y0xTiQs/items/WRCHBZP7"],"itemData":{"id":247,"type":"webpage","abstract":"You have decided that your business needs to outsource its IT requirements - this book will now show you how! The outsourcing of IT is currently a hot topic internationally and yet guidebooks on how, rather than whether or not to implement this difficult process are rare despite the serious consequences of mistakes: the costs of switching back to an in-house operation are emotionally and financially high. The IT Outsourcing Guide provides invaluable, practical advice to both guide the novice and inform the veteran on how to effectively navigate through the IT outsourcing minefield once they have decided this is the route their business needs to take. The approach suggested is top-down and leads from business goals through contracting to ongoing management, with contributions from key employees of large international companies such as: Commonwealth Bank, Royal Sun Alliance, Booz.Allen Hamilton, PA Consulting and IDG. Pioneering in the field as one of the first texts on how to implement IT outsourcing, this is a valuable resource for anyone involved in any part or stage of the information technology outsourcing process.","container-title":"Wiley.com","language":"en-us","title":"The IT Outsourcing Guide | Wiley","URL":"https://www.wiley.com/en-us/The+IT+Outsourcing+Guide-p-9780471499350","accessed":{"date-parts":[["2019",12,16]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“The IT Outsourcing Guide | Wiley”):

Estimated profit margins

Successful implementation of processes

Adaptability to the change and OSI policies

OSI satisfaction and reliability

The listed key factors collectively determine the success of the outsourcing relationship between OSI and TIS. In order to quantify the success of outsourcing, one should conduct a cost-benefit analysis of the two companies in relevance to the outsourced deal. This will provide initial guidance to either pursue the contract or withdraw it primarily. Following this analysis, determine the baseline costs and expenses based on different assumptions such as hardware and software, FTE and others, applying saving analysis ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"ukRfAthW","properties":{"formattedCitation":"(Anfield)","plainCitation":"(Anfield)","noteIndex":0},"citationItems":[{"id":244,"uris":["http://zotero.org/users/local/2y0xTiQs/items/U73EB8KK"],"uri":["http://zotero.org/users/local/2y0xTiQs/items/U73EB8KK"],"itemData":{"id":244,"type":"article-journal","language":"en","page":"19","source":"Zotero","title":"Outsourcing at Office Supply Inc.","author":[{"family":"Anfield","given":"Jim"}],"issued":{"date-parts":[["2019"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Jeffery Mark). If the calculation results in net gain, the outsourcing will prove to be successful ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"oWu5liGy","properties":{"formattedCitation":"(Watson)","plainCitation":"(Watson)","noteIndex":0},"citationItems":[{"id":245,"uris":["http://zotero.org/users/local/2y0xTiQs/items/BYN24VYK"],"uri":["http://zotero.org/users/local/2y0xTiQs/items/BYN24VYK"],"itemData":{"id":245,"type":"webpage","abstract":"Before making the decision to outsourcing IT, you need to understand what your ROI will be on using the IT outsourcing model. Here Mark Watson shows you how.","language":"en-gb","title":"How To Calculate IT Outsourcing ROI","URL":"https://www.ukngroup.com/ukn-blog/how-to-calculate-it-outsourcing-roi","author":[{"family":"Watson","given":"Mark"}],"accessed":{"date-parts":[["2019",12,16]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (Watson).

Response to Part 2:

TIS can generate profits in the underlined outsourcing deal by quantifying its key success factors based on cost-saving analysis. If TIS is successful in saving costs for the OSI along with the smooth transition of processes within estimated expenses and costs, it will generate revenues and earn the potential profit. In order to determine the profits, return on investments (ROI) of the outsourcing initiative should be assessed as well. However, the positive or negative ROIs do not indicate the success or failure of the deal, respectively. Instead, there are many other factors such as start costs to return to the insourcing that might overshadow the benefits of withdrawing the outsourcing ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"2HiYo2wJ","properties":{"formattedCitation":"(\\uc0\\u8220{}Measuring the Effectiveness of Outsourcing\\uc0\\u8221{})","plainCitation":"(“Measuring the Effectiveness of Outsourcing”)","noteIndex":0},"citationItems":[{"id":241,"uris":["http://zotero.org/users/local/2y0xTiQs/items/VZKNE6J4"],"uri":["http://zotero.org/users/local/2y0xTiQs/items/VZKNE6J4"],"itemData":{"id":241,"type":"post-weblog","abstract":"What Exactly Is A Metric? Metrics are measures of output or results.  While some managers use","container-title":"Dr John Sullivan","language":"en-US","title":"Measuring the Effectiveness of Outsourcing","URL":"https://drjohnsullivan.com/articles/measuring-the-effectiveness-of-outsourcing/","accessed":{"date-parts":[["2019",12,16]]},"issued":{"date-parts":[["2006",8,21]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Measuring the Effectiveness of Outsourcing”).

TIS is a company that excels in providing IT management solutions to different organizations. Its main business approach is outsourcing IT support. Whereas, OSI is a wholesale distributor of diverse business products and one of its product lines is serving in technological products. The IT department lacks effectiveness and expert personnel to operate efficiently. In this regard, TIS having proficient IT experts, highly equipped infrastructure, and server platforms in place, is able to save costs in providing IT solutions by benefitting from economies of scale as compared to the existing IT department conditions in OSI ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"gOK7T92F","properties":{"formattedCitation":"(Anfield)","plainCitation":"(Anfield)","noteIndex":0},"citationItems":[{"id":244,"uris":["http://zotero.org/users/local/2y0xTiQs/items/U73EB8KK"],"uri":["http://zotero.org/users/local/2y0xTiQs/items/U73EB8KK"],"itemData":{"id":244,"type":"article-journal","language":"en","page":"19","source":"Zotero","title":"Outsourcing at Office Supply Inc.","author":[{"family":"Anfield","given":"Jim"}],"issued":{"date-parts":[["2019"]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} ( Jeffery Mark).

Works Cited:

ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Jeffery Mark. “Outsourcing at Office Supply Inc.” Kellogg School of Management Cases, edited by Anfield James, Jan. 2017, pp. 1–19, doi:10.1108/case.kellogg.2016.000252.

Gottschalk, Petter, and Hans Solli‐Sæther. “Critical Success Factors from IT Outsourcing Theories: An Empirical Study.” Industrial Management & Data Systems, vol. 105, no. 6, Aug. 2005, pp. 685–702. DOI.org (Crossref), doi:10.1108/02635570510606941.

“Measuring the Effectiveness of Outsourcing.” Dr John Sullivan, 21 Aug. 2006, https://drjohnsullivan.com/articles/measuring-the-effectiveness-of-outsourcing/.

“The IT Outsourcing Guide | Wiley.” Wiley.Com, https://www.wiley.com/en-us/The+IT+Outsourcing+Guide-p-9780471499350. Accessed 16 Dec. 2019.

Watson, Mark. How To Calculate IT Outsourcing ROI. https://www.ukngroup.com/ukn-blog/how-to-calculate-it-outsourcing-roi. Accessed 16 Dec. 2019.