How Information Systems Providers Develop and Manage Expertise and Leverage Their Client Relationships for Competitive Advantage

  • Robert Gregory
  • Michael Prifling
Part of the IFIP — The International Federation for Information Processing book series (IFIPAICT, volume 267)

Abstract

Information technology vendors are continuously growing into global service providers. To reap the benefits of the changing global economy and gain a competitive advantage, providers need to see their client relationships as strategic assets and leverage them for expertise development and knowledge integration. How do IS service providers absorb knowledge from client relationships over multiple projects at multiple levels? How do IS service providers transfer and disseminate knowledge internally at and across multiple levels and integrate it to generate value-creating competencies? These questions are investigated in a longitudinal qualitative study employing interpretive case-study methods. The case included in the analysis is a 4-year IS outsourcing project between a large European bank and one of the largest Asian service providers. Services were delivered through a global virtual team, including offshore and onshore locations, and a particular strategy was employed to transfer knowledge cross-functionally, integrate this knowledge internally within the organization, and utilize it effectively in the global service delivery system. However, our initial analysis of the first interviews reveals that there was a discrepancy between the expected and actual performance of the service provider. Accordingly, the knowledge transfer and management processes need to be analyzed in more detail. With this research study, we aim at contributing to the domain of IS offshore outsourcing and services science as well as to the theory on vendor capabilities and knowledge management.

Keywords

Strategic client-vendor relationships IS outsourcing IS service providers expertise development knowledge integration knowledge transfer global delivery of services globalization of knowledge work global virtual teams organizational learning 

References

  1. Apte, U. M., and Mason, R. O. 1995. “Global Disaggregation of Information Intensive Services,” Management Science (41:7), pp. 1250-1262.CrossRefGoogle Scholar
  2. Arora, A., Arunachalam, V. S., Asundi, J., and Fernandes, R. 2001. “The Indian Software Services Industry,” Research Policy (30:8), pp. 1267-1287.CrossRefGoogle Scholar
  3. Barden, J. Q., and Mitchell, W. 2007. “Disentangling the Influences of Leaders’ Relational Embeddedness on Interorganizational Exchange,” Academy of Management Journal (50:6), pp. 1440-1461.Google Scholar
  4. Brass, D. 2001. “Networks and Frog Ponds: Trends in Multilevel Research,” In Multilevel Theory, Research, and Methods in Organizations, K. Klein and S. Kozlowski (eds.), San Francisco: Jossey-Bass, pp. 557-571.Google Scholar
  5. Cappelli, P., and Sherer, P. D. 1991. “The Missing Role of Context in OB: The Need for a MesoLevel Approach,” Research in Organizational Behavior (13), pp. 55-110.Google Scholar
  6. Cohen, W. M., and Levinthal, D. A. 1990. “Absorptive Capacity: A New Perspective on Learning and Innovation,” Administrative Science Quarterly (35:1), pp. 128-152.CrossRefGoogle Scholar
  7. Dibbern, J., Goles, T., Hirschheim, R., and Jayatilaka, B. 2004. “Information Systems Out sourcing: A Survey and Analysis of the Literature,” The DATA BASE for Advances in Information Systems (35:4), pp. 6-102.Google Scholar
  8. Dibbern, J., Winkler, J., and Heinzl, A. 2008. “Explaining Variations in Client Extra Costs Between Software Projects Offshored to India,” MIS Quarterly (32:2), pp. 333-366.Google Scholar
  9. Dubé, L., and Paré, G. 2003. “Rigor in Information Systems Positivist Case Research: Current Practices, Trends, and Recommendations”, MIS Quarterly (27:4), pp. 597-635.Google Scholar
  10. Dyer, J. H., and Singh, H. 1998. “The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage,” The Academy of Management Review (23:4), pp. 660-679.CrossRefGoogle Scholar
  11. Eisenhardt, K. M. 1989. “Building Theories from Case Study Research,” Academy of Management Review (14:4), pp. 532-550.CrossRefGoogle Scholar
  12. Ethiraj, S. K., Kale, P., Krishnan, M. S., and Singh, J. V. 2005. “Where Do Capabilities Come from and How Do They Matter? A Study in the Software Services Industry,” Strategic Management Journal (26), pp. 25-45.CrossRefGoogle Scholar
  13. Fairell, D., Kaka, N., and Stürze, S. 2005. “Ensuring India’s Offshoring Future,” McKinsey Quarterly, Special Edition, pp. 74-83.Google Scholar
  14. Friedman, T. L. 2005. The World is Flat: A Brief History of the Twenty-First Century, New York: Farrar, Straus and Giroux,Google Scholar
  15. Garud, R., and Kumaraswamy, A. 2005. “Vicious and Virtuous Circles in the Management of Knowledge: The Case of Infosys Technologies,” MIS Quarterly (29:1), pp. 9-33.Google Scholar
  16. Glaser, B. G. 1998. Doing Grounded Theory: Issues and Discussions, Mill Valley, CA: Sociology Press.Google Scholar
  17. Glaser, B. G., and Strauss, A. L. 1967. The Discovery of Grounded Theory: Strategies for Qualitative Research, Chicago: Aldine Publishing Company.Google Scholar
  18. Grant, R. M. 1996. “Prospering in Dynamically-Competitive Environments: Organizational Capability as Knowledge Integration,” Organization Science (7:4), pp. 375-387.CrossRefGoogle Scholar
  19. Gulati, R. 1995. “Social Structure and Alliance Formation Patterns: A Longitudinal Analysis,” Administrative Science Quarterly (40:4), pp. 619-652.CrossRefMathSciNetGoogle Scholar
  20. Henderson, R. M., and Clark, K. B. 1990. “Architectural Innovation: The Reconfiguration of Existing Product Technologies and the Failure of Established Firms,” Administrative Science Quarterly (30:1), pp. 9-30.CrossRefGoogle Scholar
  21. Hitt, M. A., Beamish, P. W., Jackson, S. E., and Mathieu, J. E. 2007. “Building Theoretical and Empirical Bridges Across Levels: Multilevel Research in Management,” Academy of Management Journal (50:6), pp. 1385-1399.CrossRefGoogle Scholar
  22. Hitt, M. A., Bierman, L., Uhlenbruck, K., and Shimizu, K. 2006. “The Importance of Resources in the Internationalization of Professional Service Firms: The Good, the Bad, and the Ugly,” Academy of Management Journal (49:6), pp. 1137-1157.Google Scholar
  23. Hsu, J. S. C., Parolia, N., Jiang, J. J., and Klein, G. 2007. “The Impact of Team Mental Models on IS Project Teams’ Information Processing and Project Performance,” in Proceedings of the Second International Research Workshop on Information Technology Project Management, Montreal, Quebec, Canada, December 8, pp. 39-49.Google Scholar
  24. Kanter, R. M. 1999. “Change Is Everyone’s Job: Managing the Extended Enterprise in a Globally Connected World,” Organizational Dynamics (28:1), pp. 6-22.Google Scholar
  25. Klein, K., Palmer, S., and Conn, A. 2001. “Interorganizational Relationships: A Multilevel perspective,” In Multilevel Theory, Research, and Methods in Organizations, K. Klein and S. Kozlowski (eds.), San Francisco: Jossey-Bass, pp. 267-308.Google Scholar
  26. Kogut, B., and Zander, U. 1992. “Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology,” Organization Science (3:3), pp. 383-397.CrossRefGoogle Scholar
  27. Koh, C., Soon, A., and Straub, D. W. 2004. “IT Outsourcing Success: A Psychological Contract Perspective,” Information Systems Research (15:4), pp. 356-373.CrossRefGoogle Scholar
  28. Krishnan, M. S., Rai, A., and Zmud, R. 2007. “The Digitally Enabled Extended Enterprise in a Global Economy,” Information Systems Research (18:3), pp. 233-236.CrossRefGoogle Scholar
  29. Levina, N., and Ross, J. W. 2003. “From the Vendor’s Perspective: Exploring the Value Proposition in Information Technology Outsourcing,” MIS Quarterly (27:3), pp. 331-364.Google Scholar
  30. Masuch, M. 1985. “Vicious Circles in Organizations,” Administrative Science Quarterly (30:1), pp. 14-33.CrossRefGoogle Scholar
  31. Mithas, S., and Whitaker, J. 2007. “Is the World Flat or Spiky? Information Intensity, Skills, and Global Service Disaggregation,” Information Systems Research (18:3), pp. 237-259.CrossRefGoogle Scholar
  32. Mowery, D. C., Oxley, J. E., and Silverman, B. S. 2002. “The Two Faces of Partner-Specific Absorptive Capacity: Learning and Cospecialization in Strategic Alliances,” In Cooperative Strategies and Alliances, F. J. Contractor and P. Lorange (eds.), Amsterdam: Elsevier Science, pp. 291-319.Google Scholar
  33. Nonaka, I., and Takeuchi, H. 1995. The Knowledge-Creating Company, New York: Oxford University Press.Google Scholar
  34. Okhuysen, G. A., and Eisenhardt, K. M. 2002. “Integrating Knowledge in Groups: How Formal Interventions Enable Flexibility,” Organization Science (13:4), pp. 370-386.CrossRefGoogle Scholar
  35. Oshri, I., Kotlarsky, J., and Willcocks, L. 2007. “Managing Dispersed Expertise in IT Offshore Outsourcing: Lessons from Tata Consultancy Services,” MIS Quarterly Executive (6:2), pp. 53-65.Google Scholar
  36. Ravishankar, M. N., and Pan, S. L. 2008. “The Influence of Organizational Identification on Organizational Knowledge Management (KM),” Omega (36:2), pp. 221-234.CrossRefGoogle Scholar
  37. Ring, P. S., and Van de Ven, A. H. 1994. “Developmental Processes of Cooperative Inter-organizational Relationships,” The Academy of Management Review (19:1), pp. 90-118.CrossRefGoogle Scholar
  38. Saraf, N., Langdon, C. S., and Gosain, S. 2007. “IS Applications Capabilities and Relational Value in Interfirm Partnerships,” Information Systems Research (18:3), pp. 320-339.CrossRefGoogle Scholar
  39. Tiwana, A., Bharadwaj, A., and Sambamurthy, V. 2003. “The Antecedents of Information Systems Development Capability in Firms: A Knowledge Integration Perspective,” In Proceedings of the 24 th International Conference on Information Systems, A. Massey, S. T. March, and J. I. DeGross (eds.), Seattle, Washington, December 14-17, pp. 246-258.Google Scholar
  40. Uzzi, B. 1997. “Social Structure and Competition in Interfirm Networks: The Paradox of Embeddedness,” Administrative Science Quaterly (42:1), pp. 35-67.CrossRefGoogle Scholar
  41. Walsham, G. 1993. Interpreting Information Systems in Organizations, Chichester, UK: Wiley.Google Scholar
  42. Walsham, G. 2006. “Doing Interpretive Research,” European Journal of Information Systems (15:3), pp. 320-330.CrossRefGoogle Scholar
  43. Walsham, G., Robey, D., and Sahay, S. 2007. “Foreword: Special Issue on Information Systems in Developing Countries,” MIS Quarterly (31:2), pp. 317-326.Google Scholar
  44. Walsham, G., and Sahay, S. 1999. “GIS for District-Level Administration in India: Problems and Opportunities,” MIS Quarterly (23:1), pp. 39-65.CrossRefGoogle Scholar
  45. Weick, K. E. 1969. The Social Psychology of Organizing, Reading, MA: Addison-Wesley.Google Scholar
  46. Yin, R. K. 2003. Case Study Research: Design and Methods (3rd ed.), Thousand Oaks, CA: Sage Publications.Google Scholar

Copyright information

© International Federation for Information Processing 2008

Authors and Affiliations

  • Robert Gregory
    • 1
  • Michael Prifling
    • 1
  1. 1.Institute for Information SystemsUniversity of Frankfurt, E-Finance LabFrankfurt am MainGermany

Personalised recommendations