Database Reference
In-Depth Information
In reality, the framework supports the practical implementation of business pro-
cess outsourcing and then contributes to accelerating effective business collaboration in
contemporary business environments. In particular, it can be applied to a wide variety
of practical circumstances such as the following two cases in which tightly-coupled and
loosely-coupled business process outsourcing take place respectively: a holding company
and virtual enterprise.
First, a holding company is formed to buy shares in other companies, which it then
controls. The regulatory change and the desire for a large customer base have increased the
number of large holding companies through tremendous industry consolidation recently.
However, companies inside a holding company typically perform similar business functions
such as logistics and IT system management redundantly, which impedes the economy of
scale. Then, if the redundant business functions are transferred from the companies to one
of them or an external insourcing company, overall cost effi ciency of the holding company
could be improved by virtue of the sharing of human resource and system infrastructure.
Second, a virtual enterprise outsources multiple business functions and then controls them
as if they were performed locally. As the online store in Figure 10 collaborates with a
transportation company and a credit card company, a virtual enterprise works together
with multiple insourcing companies since it may choose different insourcing companies
by business functions. In doing so, a virtual enterprise tends to incline to best-of-breed
virtual integration without any preferences or dependencies on specifi c partners; therefore,
the most infl uential criterions to select external partners are service quality and customized
service fulfi llment.
These two cases show that the goals of business process outsourcing vary from
global optimization of the cost structure to local optimization, depending on the governance
structure and business relationship of insourcing and outsourcing companies. On the other
hand, in both the cases, insourcing companies want to keep autonomy and agility, and thus
hesitate about the full information sharing with an outsourcing company. To support such
various cases of business process outsourcing, the federated process framework presents
the mechanism to control shared process data with the shared policy.
CONCLUSIONS AND FUTURE RESEARCH
Recall that the initial goal of the chapter was to provide a system framework to facili-
tate process information sharing in the modern business environment. Specifi cally, at the
beginning of the chapter, we issued the autonomy and agility problems. These two problems
have not been previously addressed in the literature, though they are crucial obstacles to
developing process information sharing. To achieve an effi cient and applicable framework,
this chapter makes efforts to address these problems in the following ways:
First, to solve the autonomy problem, we proposed the federated process framework.
Specifi cally, the fi rst step of the framework provides an object data model and XML docu-
ment structure as systematic representations of a process model and process status. The
second step distinguishes the external process model from the internal process model and
provides the detailed rules to automatically generate the external process model. The third
step presents the method to seamlessly integrate multiple process models according to
participants' sharing policies. The fourth step tailors the integrated process model for the
purposes of customization and user-level access control. In this way, the four steps facilitate
