Boundary Spanning by Design Insights From a Vendor Perspective Presented by Todd Cook Paper written by Wendy Du and Shan L Pan Todd Cook Introduction IT IT Outsourcing Outsourcing Mechanisms Boundary Spanning Strategy Case Study Carta Corporation Case Study Magma Global Support Center Conclusion Quiz IT Outsourcing 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 boundaries IT 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 reputation IT Outsourcing Mechanisms 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 arise IT 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 management IT Outsourcing Mechanisms Partnership management Used to complement contract management due to complications in ITO relationships Boundary spanning Collaborate on sharing knowledge across vendors and clients Boundary Spanning Strategy Discussed at both the organizationallevel and the group level Groups are the major units that handle communication Interaction and communication primarily occurs at the group level within an organization Boundary 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 Boundary Spanning Strategy Orientation Respond to and anticipate the environment Content Professionally driven and socially driven strategies Structure Narrow engagement strategy and broadengagement strategy invoke spanners Spanners operate on the periphery to act as an intermediary between the organization and the elements outside of it Boundary 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 client Boundary Spanning Strategy Boundary spanning strategies are patterns of activity that a group or organization demonstrates over a period of time Technical expertise T Technical and communicative expertise Boundary Spanning Strategy Narrow Engagement Strategy Vendor T Broad Engagement Strategy Client T T C T Vendor CT T CT CT CT Client Carta 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 worldwide Carta 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 Carta Corporation 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 engineers Carta 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 team Carta 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 students Magma 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 Magma Global Support Center 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 issues Magma 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 areas Magma 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 emerge Carta Corporation Carta Magma Boundary Spanning Capability Polarized Capability Most employees have technical ability but lack communicative ability The recruitment targets engineers and training focuses on technical knowledge Ambidextrous Capability Most employees have both technical ability and communicative ability The recruitment targets on ambidextrous employees and training focuses on both technical and communicative abilities Boundary Spanning Strategy Narrow Engagement Strategy Vendor Client T T T Broad Engagement Strategy Vendor CT T CT CT CT Client Magma AG Carta Magma Boundary Spanning Strategy Narrow Engagement Strategy Vendor Client T T Broad Engagement Strategy Vendor Client CT T CT T Both information assimilation and releasing are channeled and guarded by the Window Internal engineers remain isolated from the client CT CT Everyone is assigned a role as the boundary spanner They are contacted based on their