Database Reference
In-Depth Information
INTRODUCTION
Researchers and business consulting fi rms increasingly emphasize the importance of
effective outsourcing in terms of revenue increase and cost reduction (Gartner, 2002; Hafeez,
2002). To accommodate such goals effectively, the outsourcing target requires including
the business processes as well as IT infrastructure (Berfi eld, 2002), and such a type of an
outsourcing model is called business process outsourcing. Specifi cally, by outsourcing a
part of local business processes with its supporting systems, a company could reduce the
cost related to human resource and system development, while focusing on its core busi-
ness without bothering about the outsourced part. However, Gartner's recent survey (2003)
of corporate executives across Asia/Pacifi c shows that the fear of loss of control is one of
the most prominent reasons for not outsourcing. To remove the concern for the control, a
company should be able to monitor its outsourced business process transparently, as if the
outsourced one is executed internally. By enabling this transparent process monitoring, the
company could streamline and coordinate the internally-executed business processes with
the outsourced one in its value chain. The key technique for achieving the transparent pro-
cess monitoring is process information sharing (Alonso, 1999; Ball, 2002; Georgakopoulos,
1999).Process information sharing means that participating organizations in business process
outsourcing provide visibility of their internal process information to each other in order to
enhance process monitoring capabilities.
In the example of an online store case, most online stores outsource their delivery
operations to external transportation companies for the purpose of cost effi ciency, and
then focus on their core business functions, such as marketing and order processing. Then,
if an on-line store receives detailed delivery process information from its collaborating
transportation company, it can effectively carry out and monitor full steps of order fulfi ll-
ment processes, from order capturing through picking and packing, and fi nally to product
delivery. In terms of the customer satisfaction, such process information sharing allows the
online store to provide customers an extended order tracking service to monitor the overall
process status for their orders. In terms of the service quality control, the online store can
check the quality of the transportation company's services by monitoring the status of the
delivery process.
Most of the previous research on process information sharing has focused on demon-
strating such benefi ts (Ball, 2002; Lee, 1997; D'Amours, 1999; Zhou, 1998) and providing
appropriate underlying system architecture or design for process information sharing (Alonso,
1999; Georgakopoulos, 1999; Kuechler, 2001; Mori, 1999; Workfl ow Management Coalition,
2000). However, research efforts considering the issues caused from the autonomy and agility
that are the inherent properties of modern organizations are few, even though these issues
make it diffi cult to accommodate process information sharing in many real situations.
Motivation and Research Questions
Autonomy means that an outsourcing service provider, called an insourcing company,
can decide whether to and how much of its local data to share with an outsourcing service
requester, called an outsourcing company. In spite of outsourcing agreements, most insourcing
companies are usually reluctant to expose their core business information on their internal
business logic and full process status to outsourcing companies (Bolcer, 1999; Georgako-
poulos, 1999; Merz, 1999). Such unwillingness often confl icts with the need to share data,
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