Slide 1IntroductionIT OutsourcingIT OutsourcingIT Outsourcing MechanismsIT Outsourcing MechanismsIT Outsourcing MechanismsBoundary Spanning StrategyBoundary Spanning StrategyBoundary Spanning StrategyBoundary Spanning StrategyBoundary Spanning StrategyCarta CorporationCarta CorporationCarta CorporationCarta CorporationCarta CorporationMagma Global Support CenterMagma Global Support CenterMagma Global Support CenterMagma Global Support CenterCarta CorporationMagma AGConclusionConclusionQuizQuizBoundary Spanning by Design:Insights From a Vendor PerspectivePresented by Todd CookPaper written by Wendy Du and Shan L. PanTodd CookIT OutsourcingIT Outsourcing MechanismsBoundary Spanning StrategyCase Study: Carta CorporationCase Study: Magma Global Support CenterConclusionQuizIntroductionIT outsourcing is expected to reach $160 billion by 2012Outsourcing needs to meet the objectives of both the client and the vendorIssues arise from opportunistic behavior, conflicts, and boundariesIT OutsourcingClientDecreases transaction/production costs, increase access to advance technologies, and focus on strategic competenceVendorFocus on project quality and efficiency, access domain knowledge of the client, and improve its market reputationIT OutsourcingIT outsourcing mechanisms are broken into 4 categoriesOrganizational control, partnership management, contract management, and boundary spanningUsed to prevent and control conflicts that may ariseIT Outsourcing MechanismsOrganizational controlReconciles conflicts between stakeholders and marshal resources in the same directionContract managementLimits opportunistic behavior between vendors and clientsOften invokes partnership managementIT Outsourcing MechanismsPartnership managementUsed to complement contract management due to complications in ITO relationshipsBoundary spanningCollaborate on sharing knowledge across vendors and clientsIT Outsourcing MechanismsBoundary Spanning StrategyDiscussed at both the organizational-level and the group-levelGroups are the major units that handle communicationInteraction and communication primarily occurs at the group level within an organizationBoundary Spanning StrategyOccupational boundaries and language and cultural boundaries are problematicVendors and clients may have different levels of technical and communication expertiseThere are three types of boundary spanning strategiesBased on orientation, content, and structureOrientation▪Respond to and anticipate the environmentContent▪Professionally-driven and socially driven strategiesStructure▪Narrow-engagement strategy and broad-engagement strategy invoke spanners▪Spanners operate on the periphery to act as an intermediary between the organization and the elements outside of itBoundary Spanning StrategyNarrow-engagement strategyHaving a limited number of boundary spanners can increase efficiency and reduce errorsBroad-engagement strategySharing of boundary spanning roles may reduce workload on individual spanners and may offer more opportunities for informationAssigns as many spanners as possible to the clientBoundary Spanning StrategyBoundary spanning strategies are patterns of activity that a group or organization demonstrates over a period of timeCTTTTTBoundary Spanning StrategyNarrow-Engagement StrategyVendor ClientBoundary Spanning StrategyCTCTCTBroad-Engagement StrategyVendor ClientTCTTechnical expertiseTechnical and communicative expertiseCarta Corporation17 years ago Carta Corporation was a small startup company with fewer than 10 employeesOriginally a software and network research labToday, Carta Corporation is a leading Chinese IT provider with over 15,000 staff and 9,000 clients worldwideCarta CorporationUtilized boundary-spanning practices to bridge a strategic partnership between Carta and Aldo corporation, a leading Japanese electronics companyBoundary spanning practices evolved into three phasesPhase 1: 1991-1996Recruiting engineers with advanced technical abilitiesCarta sought help from parent company North University to lobby research labs to partner with or join CartaAcquired a management information lab and a virtue networking research lab both with about 25 experienced engineersCarta CorporationPhase 2: 1996-2000Restructuring the communication model▪Communications between key clients was handled primarily by engineers▪Improved communication skills or replaced engineers▪Engagement level reduced to a Window Project Manager▪Only Window Project Manager communicated between client and engineering teamCarta CorporationPhase 3: 2000-presentFurther enhancing engineers’ abilities▪By 2003 Carta outsourced $30 million in business▪Started to recruit low-cost fresh graduates well trained in coding▪Built own IT institute▪3 campuses with over 25,000 studentsCarta CorporationMagma Global Support CenterA subsidiary of Magma AG best known for its enterprise resource planningHas 47,000 employees in over 120 countriesConsolidated small local support centers into large-scale global support centers in countries with low labor costPhase 1: 1997-2004Creating a communication model▪Complexity and lack of trained personal caused major problems at the China support center▪Developed message-solving mechanism which allowed consultants to interact directly with clients▪Allowed for faster response times and a joint effort to resolve issuesMagma Global Support CenterPhase 2: 2004-2008Recruiting engineers with technical and communicative abilitiesLocated recruiting offices in Dalian and Shanghai to have access to high-end consultantsSponsored a double-major program at a top university to top studentsRecruited over-seasIntensive training program with the MS mechanism and technical areasMagma Global Support CenterPhase 3: 2008-presentFurther enhancing the communication model▪Implemented the Support Advisory Center team to proactively engage clients▪Surveyed clients to raise issues and log messages▪Eliminates issues before they emergeMagma Global Support CenterCarta CorporationCTTTTTCTCTCTBoundary Spanning StrategyBoundary Spanning CapabilityPolarized CapabilityMost employees have technical ability but lack communicative ability. The recruitment targets engineers and training focuses on technical knowledgeAmbidextrous CapabilityMost