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SME ERP system sourcing
strategies: a case study
Submitted To: Prof. Gunmaa Suri
Submitted !y: "es#a$ "umar
M !A %&'erations ( Mar)eting* Setion+
!

SME ERP system sourcing
SME ERP
system sourcing
strategies: a case study
strategies
Deb Sledgianowski and Mohammed H.A. Tati
De!artment o "normation Technology and #uantitati$e Methods%
&'(
)rank *. +arb School o ,usiness% Hostra -ni$ersity%
Hem!stead% .ew /ork% -SA% and
Recei$ed ' Se!tember '001
2im 3ierstead
Re$ised '& .o$ember '001
Acce!ted 4 December '001
3anebridge 5or!oration% 6akland% .ew 2ersey% -SA
A
bs
tr
ac
t
Pu
r!
os
e
7
Th
e
!u
r!
ose o this !a!er is to identiy ERP system sourcing strategies a$ailable to SMEs and to !ro$ide insights rom a case study o the
!ractices a!!lied and decisions made by an SME in using a hybrid o sourcing resources to im!lement the successul con$ersion
o their legacy ERP system to a new inormation technology 8"T9 en$ironment.
Design:methodology:a!!roach 7 This research is a case study utili;ing $arious data sources including ace<to<ace inter$iews%
inormal con$ersations% and e<mails with members o the case com!any. 5om!any sotware a!!lications and documents were
e=amined and em!loyees were obser$ed in action. The analysis com!ares characteristics o the client<$endor relationshi! o the
case com!any with indings rom rele$ant outsourcing literature.
)indings 7 This case study identiied% among others% the ollowing !ractices that were critical to the case com!any in their
outsourcing endea$ors: attending networking e$ents or SMEs% obtaining ormal contract or ownershi! o intellectual !ro!erty%
utili;ing local $endor contact !oint or communication with oshore contact !oint% and utili;ing $endor>s skill<set or s!eciali;ed
resources.
Practical im!lications 7 This case study relates !ractice with theory% !ro$iding a reerence or both academia and !ractitioners.
6riginality:$alue 7 The decision making and !ractices described in this !a!er !ro$ide insights that may be useul to organi;ations
considering "T sotware im!lementations. ERP systems are increasingly more aordable or SMEs and oshore outsourcing is
becoming more accessible? thereore% SMEs considering these o!tions may beneit rom 3anebridge>s e=!erience.
3eywords 6utsourcing% Manuacturing resource !lanning% Small to medium<si;ed enter!rises
Pa!er ty!e 5ase study
"ntroduction
ERP systems enable the enter!rise to streamline and integrate $irtually all o!erations and
unctions rom order !rocessing to $endor and customer relationshi! management. These
relati$ely e=!ensi$e and so!histicated com!uter<based systems were aorded only by large
business organi;ations in the !ast. ,ut recently% as they !ro$ed to be $ery eecti$e in !ro$iding
large enter!rises signiicant com!etiti$e ad$antage o$er those that did not im!lement ERP
solutions% they became more a$ailable and aordable or SMEs as well 86lsen and Saetre%
'0019.
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se$eral o!tions or SMEs in sourcing inormation technology 8"T9 solutions such as ERP
that until recently% ha$e only been within the reach o large organi;ations. 6n the other
hand% se$eral new !ro$iders o ERP solutions ha$e Foined SAP and other !ro$iders to
oer $arious o!tions or SMEs in im!lementing their ERP systems 8DePom!a% '00C9.
&''
These recent de$elo!ments ha$e o!ened new windows o o!!ortunities or SMEs in ERP
sourcing strategies including the use o outsourced sotware 8,ryson and Sulli$an% '00C9.
This !a!er discusses case study research conducted at 3anebridge 5or!oration 8www.kanebridge.com9. 3anebridge% a
medium<si;ed com!any% recently underwent a decision<making !rocess to determine whether they should Gmake or
buyH a mission<critical enter!rise system. They decided to make the system% which was a rewrite o their e=isting
system% but their decision !rocess led them to use a new sotware de$elo!ment en$ironment and "T inrastructure in
their irst<e$er maFor oshoring endea$or.
A goal o this research is to identiy !ractices a!!lied during an SME>s e=!erience with outsourcing a sotware
de$elo!ment !roFect. Ie identiied eight characteristics 8)igure (9 associated with 3anebridge>s client<$endor
outsourcing relationshi! which we analy;e and com!are to indings rom rele$ant outsourcing literature.
3anebridge has successully im!lemented an oshore a!!lication de$elo!ment relationshi! enabling them to achie$e
their a!!lication im!lementation !roFect goals within their allotted time and cost. "normation obtained or this case
study was
Aendor has a high le$el o
reJuired technical skills
Aendor has a clear understanding o the ERP !roFect reJuirements
5lose% riendly% and somewhat inormal client<$endor
relati
onshi
!
Simil
ar
client<$endor
com!any si;e
5haracteristics o
.o ormal
client<$endor
contract with
outsourcing
the e=ce!tion
relationshi! at
o source code
3anebridge
ownershi!
)igure (.
5haracteristics o client<$endor
outsourcing relationshi!
Iork is relati$ely
standard and has a low<
le$el o com!le=ity
Source code is
ormally agreed to
be clientKs !ro!erty
ReJuired client<s!eciic
custom code or
ERP a!!lication
co
ll
ec
te
d
d
ur
in
g
'004<'001 rom $arious data sources including ace<to<ace inter$iews% inormal
con$ersations% and e<mails with members o the case com!any including the unctional
area managers or "T% !urchasing% sales% and o!erations. 5om!any sotware a!!lications
and documents were e=amined and em!loyees were obser$ed in action.
Sharing the !ractices a!!lied and decisions made by the case com!any may !ro$ide
$aluable inormation to both !ractitioners and academicians concerned with ERP system
im!lementation and sourcing strategies. Ater a brie literature re$iew on SME sourcing
strategies% the com!any>s background and "T en$ironment are discussed. )ollowing this is a
discussion o select "T acti$ities and unctions since 3anebridge>s ince!tion in (L14 that
led to their decision to use both insourcing and outsourcing o "T human resources to
de$elo! their custom ERP system. Eastly% the conclusion and discussion is !resented.
SME sourcing strategies: a brie literature re$iew
Eecti$e !lanning and utili;ation o "T resources in$ol$es analysis o a$ailable "T sourcing
o!tions to eecti$ely res!ond to en$ironmental changes and e=!loit "T or gaining
com!etiti$e ad$antage. SMEs are subFect to similar outsourcing decision considerations as
large businesses to ensure their ongoing sur$i$al. This includes choosing the o!timal
sotware sourcing o!tion when im!lementing new enter!rise sotware systems.
6rgani;ations need to weigh their o!tions relati$e to their ca!abilities.
Sourcing strategies in$ol$e a range o o!tions. 6ne side o the sourcing<o!tion
s!ectrum is Gtotal insourcingH which in$ol$es !roduction% o!eration% and maintenance
o sotware com!letely by the com!any>s sta within the boundary o the enter!rise.
The other side is Gtotal outsourcingH which is allocation o o$er B0 !ercent o the "T
budget to e=ternal $endors 8,arthelemy and *eyer% '00&? Eacity and Iillcocks% (LLB9.
,etween these two o!tions% there e=ists a large $ariety o sourcing strategies in$ol$ing
some combination o insourcing and outsourcing. Among these $ariations% three ERP
system sourcing
o!tions ha$e
emerged as likely
alternati$es or
SMEs:
im!lementing a
!urchased or leased
!ackaged sotware
system on<site?
im!lementing an
a!!lication ser$ice
!ro$ider 8ASP9
model oering a
!ackaged system
deli$ered and
su!!orted by a
remote data center?
and
outsourcing
de$elo!ment o a
custom system which
is then im!lemented
on<site.
ERP systems consist
o
m
ul
ti
!l
e
m
o
d
ul
es
th
at
integrate enter!rise<wide back oice o!erations or unctional areas such as sales and
distribution% materials management% and inancial and cost accounting. Packaged ERP
systems le$erage collecti$e Gbest !racticesH to !ro$ide transormational changes to
business !rocesses and o!erational eiciencies. ERP system $endors such as SAP and
6racle% ha$ing saturated the market or large<si;ed enter!rises% ha$e e=!anded into the
mid<si;ed business market with scaled<down 8and less e=!ensi$e9 ERP solutions.
SMEs may ha$e a greater need or inormation<integrating ERP solutions because they
ty!ically lack the resources and robustness o larger businesses to stay com!etiti$e
8Shehab et al.% '00&9. SMEs usually ha$e limited resources% so im!lementing an ERP
system can be !rohibiti$e. An alternati$e a!!roach to !urchasing a !ackaged ERP
system is to utili;e an ASP or Gsotware as a ser$iceH model 8Eee et al.% '00&9.
Eeasing sotware rom an ASP is a orm o outsourcing whereby ERP unctionality is
deli$ered o$er the
internet without the
e=!ense o hardware
and sotware
SME ERP
system sourcing
strategies
&'C
"MDS
(0B%&
&'&
installations%
sotware
u!grades%
and
maintenance.
Ihile this
may be
ad$antageous
or an SME
because they
do not
reJuire on<
site ERP
e=!ertise to
maintain the
system% this may be a disad$antage o ERP outsourcing since the control o daily o!erations
is usually done by a third<!arty 8DePom!a% '00C9 who may ha$e other !riorities.
The sourcing o!tions o !urchasing a !ackaged system or leasing the system rom an ASP assume
that a decision to buy has been made or the acJuisition o the sotware. 5hen and Soliman 8'00'9
de$elo!ed a make<or<buy decision tree which can be used to determine whether an organi;ation
should de$elo! and maintain an a!!lication in<house% use traditional outsourcing to de$elo! and
maintain the a!!lication% outsource the a!!lication using an ASP solution% or use a hybrid o the
!receding solutions. Their decision model considers an organi;ation>s analysis o actors% like
whether the a!!lication is mission<critical and how easily it can be used elsewhere by
com!etitors% cost actors such as !roduction cost ad$antages and transaction costs% their
e=!erience with the technologies in$ol$ed% and the maturity o those technologies.
Transaction cost economics suggest that the !roduction costs associated with in<house
sotware de$elo!ment relati$e to transaction costs associated with acJuiring sotware
ser$ices rom the market a$or a buy decision when it comes to SMEs% due to the lack o in<
house e=!ertise and resources or in<house de$elo!ment o such a system 8Rooks and
SniFders% '00(9. ,ut% e=ce!tions to this occur in a$or o the make decision when the
sotware to be de$elo!ed is !ercei$ed as strategic% and in<house e=!ertise e=ists. Sourcing
o!tions or de$elo!ment o a custom ERP system include outsourcing all or !art o the
custom sotware de$elo!ment. Two outsourcing o!tions are insourcing and oshoring.
6utsourcing% as a maFor "T and business strategy% has become a common!lace !ractice in recent
years 8)ish and Seydel% '00D9. According to *artner% a!!ro=imately L0 !ercent o all new
businesses in the -SA are SMEs and the trend is toward their increasing use o outsourcing
8Mears% '00D9. 6shore outsourcing 8oshoring9 o sotware de$elo!ment is when a com!any
!rocures !rogramming or other de$elo!ment !rocesses rom a su!!lier !ro$iding human
resources that are located in a oreign country. Skills that are most likely to be oshored are those
that do not reJuire close interaction between the client and oshore ser$ice su!!lier or sharing o
a common knowledge base with the client>s business users? such as !rogramming 8,ullen et al.%
'0019. *i$en the lack o resources that small to medium<si;ed enter!rises ha$e relati$e to larger
organi;ations% oshoring can be a maFor undertaking or these irms and is not as !re$alent as it is
in larger irms 85armel and .icholson% '0049.
6rgani;ation
s generally
e=!ect to
reduce their
o$erall "T
costs% ocus
on their core
com!etencies
% and gain
su!erior technical resources when outsourcing !art or all o their "T unctions. Among all
reasons to outsource% the one that has emerged as the !rime reason in recent years is to gain
com!etiti$e ad$antage through !artnershi! by sharing inormation and knowledge 8)ish and
Seydel% '00D9. Howe$er% without a careul consideration o the $arious risks associated with
outsourcing% any gain in the abo$e areas can be oset by signiicant risks in$ol$ed. Some o
the risks associated with outsourcing include loss o "T e=!ertise% hidden costs% ina!!ro!riate
contract% limitation o control and loss o !ri$acy and security. "n the 3anebridge case% the
risk actor has been addressed and mitigated by management in $arious ways including
!ro$isions to retain intellectual !ro!erty right to source code% choosing a $endor o similar
si;e as well as establishing close !roessional relationshi!s% and making sure
th
e
$
e
n
d
o
r
h
as a clear and accurate understanding o their ERP !roFect obFecti$es. These areas are
among the eight characteristics 8)igure (9 discussed in this !a!er.
5ase study: background
5om!any background
3anebridge 5or!oration is a leading wholesale distributor o industrial asteners 8nuts%
bolts% screws% etc.9. They are a !ri$ately held cor!oration with 10 em!loyees
headJuartered in 6akland% .2 with branches in 5aliornia and "llinois. Their current
annual sales e=ceed M(C.4 million 8the com!any reJuested to withhold s!eciic
inancial data9.
The com!any was incor!orated in (L14 by owners 2oe Mc*rath and ,obby Iilliams
who saw a demand or in<stock asteners contained in smaller !ackage si;es which
could be deli$ered in less time than it took or the traditional made<to<order
manuacturing !rocess 8D<B weeks9 to be com!leted. 6$er the years% the com!any>s
niche e=!anded to carrying a wide range o astener ty!es a$ailable or same day
shi!!ing. This ser$ice reJuires e=ce!tional business intelligence% ca!able o
orecasting in$entory reJuirements to !ro$ide a LB !ercent le$el o a$ailability.
The "T en$ironment at 3anebridge
3anebridge is a leader in their industry in "T usage. The com!any has the ty!ical
characteristics o SMEs most likely to ado!t "T 85huang et al.% '0019.
Table " illustrates a time line o im!ortant "T actions and decisions at 3anebridge. "n
the early (LB0s% 3anebridge collaborated with Dyma= Systems% a sotware
de$elo!ment com!any% to hel! them de$elo! a turnkey logistics system or the astener
distribution industry. This logistics system contained many o the integrated back<
oice unctionalities
o ERP.
This collaboration
worked well or both
sides? 3anebridge
was able to !urchase
custom de$elo!ed
leading edge
sotware at close to
!ackaged sotware
!rices and Dyma=
was able to design
their inormation
systems based on a
leading astener
distributor>s business
!rocesses.
SME ERP
system sourcing
strategies
&'4
/ear
"T acti$ity:decision
Descri!tion
(L1D
"nce!tion
Automated in$entory and
sales tracking
(LB(
Eogistics system
5ollaborated with Dyma=
Systems to de$elo!
their logistics system% a !recursor o ERP
(LBC
"T unction established
3anebridge decides to maintain and enhance
logistics system in<house
(LLC
ERP im!lementation
-sed 5ognos> PowerHouse &*E tool to
de$elo! and im!lement custom ERP on HP
Al!haSer$er
'00'
Aendors announce sun setting o !roducts
HP>s announcement o !hasing out the
8a maFor im!etus or change leading to the
Al!haSer$er% and the resulting 5ongnos>
outsourcing decision9
decision to mature their PowerHouse &*E
!roduct on 6!enAMS leads 3anebridge to
consider $arious "T
sourcing o!tions
'00C
Make or buyN *oing
oshore
Decided to GmakeH
sotware using new
de$elo!ment en$ironment
with in<house and
oshored contract sotware
de$elo!ers
Table ".
Timeline or 3anebridge>s
selected "T acti$ities and
decisions
"MDS
(0B%&
&'D
As 3anebridge>s sales grew and their business transactions increased% they needed to make
some decisions about their "T resources. 3anebridge knew that any com!etiti$e ad$antage
they were reali;ing rom the Dyma= turnkey logistics system would Juickly diminish as the
system became !ublicly a$ailable to any other com!any in the astener distribution industry
that wanted to buy it. Additionally% like other SMEs% they reali;ed the growing im!ortance o
managing their su!!ly chain and su!!lier !erormance 8Aokurka and +ank% '00D9.
3anebridge had to decide whether to continue using the Dyma= logistics system as<is%
contract with Dyma= to make enhancements to it as 3anebridge urther e$ol$ed their
business
!rocesses% or
hire their
own ull<time
"T
de!artment
or sotware
de$elo!ment
and su!!ort.
The "T
unction at
3anebridge
The decision
3anebridge
made was to
!art ways
with Dyma=
and create
their own "T
de!artment.
"n (LBC% 2im
3ierstead
was
a!!ointed to
head the "T
de!artment%
res!onsible
or sustaining
the
com!any>s
in$estment in the Dyma= Systems. 3anebridge>s strategy was to modiy the e=isting
a!!lications when enhancements were necessary or would im!ro$e unctionality. The system
was used throughout the (LB0s% but its limitations and e=tensi$e modiications were taking
their toll on its unctionality and !erormance. A decision was made to rewrite the system to
enhance it with additional integrating unctionality% so that it was truly an enter!rise<wide
resource !lanning system.
At the time o this decision in (LLC% 3anebridge had the necessary "T skill<set% but
de$elo!ing a new system would reJuire increased !roducti$ity rom their "T sta. They did
not want to increase their headcount because ater the system was de$elo!ed% there would not
be ull<time work a$ailable to sustain the !ositions. They considered hiring contract workers%
but based on !re$ious e=!erience% 3anebridge belie$ed the com!any had the ca!ability to
rewrite the system themsel$es i they had a sotware de$elo!ment en$ironment to hel!
generate the code. 3anebridge was satisied with their hardware and o!erating system
!latorm so they looked at sotware de$elo!ment !roducts that ran on that en$ironment. They
decided that 5ognos> PowerHouse &*E was a suitable tool or them to use to de$elo! their
new ERP system. The new ERP system was ully im!lemented by (LL4.
"m!etus or change
The initial moti$ation behind 3anebridge ha$ing to contem!late the ate o their ERP system% yet
again% came rom the reali;ation that their hardware !latorm and sotware en$ironment would no
longer be su!!orted by the $endors who !ro$ided them. The hardware $endor announced that they
were sun<setting sales and su!!ort o their Al!haSer$er. As a result o that news% 5ognos
announced they were maturing their PowerHouse &*E !roduct on this !latorm. 3anebridge had
to consider their o!tions. At the time o their announcement% 5ognos oered only one o!tion that
would work or 3anebridge 7 to migrate PowerHouse a!!lications rom their Al!haSer$ers
running 6!enAMS to another ser$er<ty!e running -."O or Iindows 85ognos% '00D9. This
o!tion was not a sim!le !ort to a new !latorm? rather% it reJuired e=amining the code or
e=ce!tions that reJuire inter$ention% such as !rocedure calls to the o!erating system and data ty!e
ma!!ing. This combination o $endor announcements and resulting migration o!tions was the
im!etus that moti$ated 3anebridge to reconsider their hardware% o!erating system% and sotware
de$elo!ment en$ironment.
5ase study: deciding on a course o action
A new look at the Gmake<buyH decision
3anebridge took the $endor announcements as an o!!ortunity to e$aluate their "T
sourcing strategy.
3anebridge>s "T
history included C0
years o in<house
custom sotware
de$elo!ment. Ias it
time or them to
consider re!lacing
their custom ERP
system with a
!urchased ERP
!ackageN Packaged
sotware systems
ha
$e
m
ad
e
gr
ea
t
st
ri
de
s
si
nc
e
3
an
eb
ri
d
ge
>s
ea
rli
er
de
ci
si
o
n
to
cu
st
o
m
<
build. ERP $endors% ha$ing saturated the market or large<si;ed enter!rises% ha$e
e=!anded into the SME market with scaled down ERP solutions. At the low end o the
!rice range% 3anebridge could e=!ect automated distribution and inancial !rocesses%
but any other unctionality is considered an Gadd<onH module with add<on costs.
"m!lementation can be both costly and risky. Some o the Juestions 3anebridge
considered were:
.
How much will they ha$e to change their !resent business !rocesses to
accommodate a new ERP sotware !ackageN
.
How easy is it to write custom code or the !ackage and what is the diiculty
in installing $endor u!dates to !ackages that ha$e been customi;edN
.
Ihat sotware de$elo!ment en$ironment does the sotware !ackage use and
is it !ro!rietaryN )or e=am!le% SAP uses a !ro!rietary language called A,AP which
reJuires skill in that !articular language and coniguration tools in order to customi;e
the code.
A key actor weighing in on their consideration was that while many o 3anebridge>s
routine !rocedures are common to !ackaged sotware% there are many uniJue as!ects
to their business !rocesses that !ro$ide them with com!etiti$e ad$antage that would
reJuire custom coding. )or e=am!le% 3anebridge was unable to ind any !ackaged
sotware that could re!licate their in$entory orecasting logic. They did not think SAP
or similar !ackaged systems were le=ible enough to easily customi;e to accommodate
their dierent business !ractices. They were uncertain how a !ackaged ERP system
could satisy their core reJuirements while itting with their organi;ational strategy% a
key element in ERP system selection 8Al<Mashari et al.% '00D9. 3anebridge was
unamiliar with SAP>s A,AP !ro!rietary language and they thought that i they had to
learn a new !rogramming language to maintain a !ackaged sotware solution% they
might as well learn a non<!ro!rietary language such as 2a$a.
"n '00C% 3anebridge made the decision to rewrite their system using 2a$a. 2a$a>s o!en
source and cross<!latorm ca!abilities contributed greatly to their decision. They
decided to consider using outsourced hel! in the sotware de$elo!ment !rocess%
mainly because they wanted to get the !roFect done Juickly and their "T manager was
the only 3anebridge
em!loyee with the
necessary skills
needed or the new
de$elo!ment
en$ironment.
3anebridge>s history
was to de$elo!
custom sotware in<
house% but they were
concerned that there
was no 2a$a sotware
de$elo!ment
en$ironment
com!arable to the
en$ironment they
had with
PowerHouse. Ha$ing
the PowerHouse
de$elo!ment
en$ironment was a
key actor in the
success o their
!re$ious sotware
de$elo!ment !roFect.
SME ERP
system sourcing
strategies
&'1
"MDS
(0B%&
&'B
The decision to outsource de$elo!ment
3anebridge>s
President 2oe
Mc*rath irst
met the
President o
Source5ode
"nc. at a
meeting o
small
business
owners.
Source5ode
"nc. is a
sotware
consulting
com!any
headJuartere
d in
Tarrytown%
./% not ar
rom
3anebridge>s
headJuarters.
The two
com!any
!residents
became
acJuaintance
s and
inormally
talked about
3anebridge>s
legacy ERP
system
con$ersion
!roFect.
Source5ode>
s President
suggested
that his
com!any
could !ro$ide
3anebridge
with contract
!rogram
de$elo!ers to hel! them Juickly com!lete the !roFect% at a third o the cost to de$elo! it
onshore.
Source5ode submitted a bid or the !roFect based !rimarily on lines o code and number o
screens. The two com!anies could not agree on a i=ed !rice ee structure% but they
e$entually agreed on a time<and<material ee structure. A time<and<material ee structure is
considered more risky or the client since it !uts the res!onsibility to e=!edite the work on
the client. A i=ed !rice ee structure !uts the res!onsibility to e=!edite on the outsourcing
$endor% since they ha$e incenti$e to inish the !roFect as soon as !ossible% rather than
collecting billable hours as with a time<and<material based ee structure.
The time<and<material ee structure worked well or 3anebridge because it moti$ated them
to look or !roducti$ity tools to sa$e time and money. This resulted in the de$elo!ment o a
custom sotware tool to con$ert PowerHouse code into 2a$a code. 3anebridge rewarded the
outsourced !rogrammer who de$elo!ed the con$ersion tool with a bonus !ayment.
"nterestingly% 3anebridge and Source5ode did not use a ormal contract. Rather% their
agreement was based on a handshake. This was due in !art to the !re<e=isting relationshi!
between the two com!anies and the element o trust they shared. According to 3ierstead% the
other reason there was not a ormal contract was the inherent moti$ation or both !arties to
kee! their end o the agreement because Source5ode was getting their billable hours and
3anebridge was getting seasoned 2a$a !rogrammers with ongoing e=!erience working on the
3anebridge !roFect? a win<win situation. Two critical issues to 3anebridge% though% were
they had a legally binding agreement with Source5ode that any code de$elo!ed during the
!roFect belongs to 3anebridge and each de$elo!er signed a non<disclosure agreement.
3anebridge is $ery satisied with their relationshi! with Source5ode. According to
3anebridge President Mc*rath:
The Source5ode team is a !leasure to work with. ">m im!ressed with their G5ustomer )irstH attitude. "
truly belie$e that ha$ing Source5ode as a long time strategic !artner is a sound and stable business
decision 8Source5ode "nc.% '0019.
6shoring
Shortly into the !roFect 3anebridge was ready to utili;e additional outsourced 2a$a
de$elo!ers. Two de$elo!ers rom Source5ode were added to the !roFect to work at
3anebridge>s .2 location% or a total o three onshore consultants. Source5ode recommended
that 3anebridge use their oshore ser$ices or additional de$elo!ers. They decided to Gstart
smallH and added de$elo!ers in !airs as needed until there was a total o si= oshore
de$elo!ers working in "ndia.
The Source5ode onshore !roFect leader handled most communication with the "ndia
de$elo!ers. The oshore !roFect team worked in two grou!s o three members each. Each
grou! worked on a dierent module o the system. They were able to gain
!r
o
d
uc
ti
$i
ty
us
in
g
a
G
ol
lo
w
<
th
e<
su
nH
st
ra
te
gy% le$eraging the L and (:' hour time dierence by sending !rogramming
s!eciications at the end o the onshore work day and recei$ing the code back rom
"ndia the ne=t morning. Ihile 3anebridge was able to take ad$antage o the time
dierence to increase !roducti$ity% oshore !roducti$ity le$els were two<thirds that o
onshore. ,ut% this was more than oset by the hourly wage o the oshore workers
relati$e to the onshore workers% which was one<third the cost. Ihile cost sa$ings may
be the !rimary reason or -S irms to outsource 8Rottman and Eacity% '00D9% or
3anebridge it was secondary to their need or a s!eciic skill<set? although cost sa$ing
was the !rimary beneit o their oshoring.
2enne= and Adelakun 8'00C9 suggest that traditional oshore a!!lication de$elo!ment
a!!lications tend to be highly structured with little or no changes to the reJuirements
s!eciications% with minimal interaction and !roFect management rom the client. This
was the case with 3anebridge and Source5ode? traditional oshore !rogramming
assignments were tasked to the "ndia !roFect team. Ihen the !rograms rom "ndia
were ready or testing% the testing occurred onshore and any resulting coding issues
were resol$ed in .2. The code did not go back to "ndia to be i=ed. This enabled
!roblems to be i=ed right away so end<users could continue testing without much time
la!se.
The outsourcing literature suggests that the Juality o work recei$ed rom oshore
de$elo!ers may be lower than work !roduced onshore 8Da$is% *.,.% et al.% '00D?
Rottman and Eacity% '00D9. 3anebridge ound the code they recei$ed rom the
oshore !rogrammers had a le$el o deects com!arable to code de$elo!ed onshore.
5usumano et al. 8'00C9 suggest that !rogrammers are less !rone to coding deects i
there are limited design and code changes. This was the case at 3anebridge because
the oshore !rogrammers only worked on con$erting the e=isting code% with minimal
design changes being introduced. Ihere 3anebridge did ind a dierence between
onshore and oshore work was with the Juality o the code. The oshore
!rogrammers were $ery good at the work they did% but 3ierstead only gi$e them
coding assignments ha$ing limited coding com!le=ity that were easy to communicate
without ace<to<ace meetings. The onshore !rogrammers were able to do more
com!le= design and coding because they became amiliar with the domain o
3anebridge>s business !rocesses and the legacy system that being con$erted.
3anebridge held reJuent ace<to<ace design and code re$iews with them to hel! the
knowledge transer !rocess. This knowledge transer ca!ability was missing between
the onshore and oshore de$elo!ment teams due to location and time dierences.
Discussion and conclusion
3anebridge>s decision to make their ERP system% rather than buy a !ackaged solution
and im!lement it in<house or through an ASP% and their ensuing sourcing e=!erience
may !ro$e useul to "T and business leaders o other SMEs as they look to le$erage "T
to enable and dri$e
their business
strategies. The
!ractices and
decisions o
3anebridge may
!ro$ide useul
insight or
organi;ations to
consider when
im!lementing
sotware
de$elo!ment
!roFects. The irst
!art o this section
summari;es the
rationale behind
3anebridge>s
decision to make
their sotware
solution rather than
buy it and the second
!art discusses the
!ractices they
a!!lied.
The maturity o
3anebridge>s "T
resources greatly
inluenced their
decisions to make
their ERP system and
to utili;e
outsourcing. 3arimi
et al. 8'0019% using a
SME ERP
system sourcing
strategies
&'L
"MDS
(0B%&
&C0
resource<
based $iew%
identiied
knowledge%
relationshi!%
and "T
inrastructure
as three
classes o "T
resources that
are critical to
building ERP
ca!abilities%
which can
result in
successul
ERP
im!lementati
on outcomes.
G3nowledge
resourcesH
reers to
e=!ertise and
e=!erience
used or
building "T
ca!ability
83arimi et
al.% '0019.
3anebridge
had two successul enter!rise system im!lementations rom which to gain !roFect
management and business !rocess knowledge. Also% although they had no e=!erience dealing
with oreign consultants% the com!any did gain e=!ertise in dealing with consultants which
was learned rom their e=!erience with Dyma=.
GRelationshi! resourcesH reers to the sharing o risk and res!onsibility between the "T and
business unctions 83arimi et al.% '0019. 3anebridge had to! management su!!ort% and
interde!artmental coo!eration and communication during the entire !roFect% both critical
success actors to ERP im!lementations 8Plant and Iillcocks% '0019 and "T !roFects 83arlsen
et al.% '00D9. GReliable "T inrastructure resources%H the third element identiied by 3arimi et
al. 8'0019 critical to ERP ca!abilities% did not add to 3anebridge>s ca!abilities% but rather
increased risk since their entire hardware and sotware architecture was changed as !art o
the im!lementation.
5om!aring 3anebridge>s decision<making analysis with 5hen and Soliman>s 8'00'9 make<
or<buy decision tree discussed earlier% 3anebridge closely ollowed the suggested !ath or
de$elo!ing and maintaining the solution in<house: The ERP system was seen as a core
com!etency o the organi;ation. Production cost ad$antages were una$orable because
3anebridge did not think they would ind a suitable !ro!rietary ERP system chea!er than it
would cost to de$elo! and maintain a custom system. The transaction costs associated with
the eort% time% and costs to de$elo! in<house were seen to a$or an in<house solution since
3anebridge was $ery accustomed to de$elo!ing their own sotware solutions% and in act it
was embedded in their culture. A highly customi;ed ERP system is seen as a $ery s!eciic
asset to an organi;ation% which according to 5hen and Soliman is an attribute contributing to
the decision to de$elo! and maintain a system in<house% which was the case at 3anebridge.
The organi;ation>s internal e=!ertise with im!lementing and maintaining the !rimary
!ackaged system alternati$e was low% since the !ackaged system they had considered was
written in a !ro!rietary language which they had no e=!erience with. The decision tree
suggests that lack o internal e=!ertise with a !articular !ackaged solution a$ors a decision
to de$elo! in<house. These i$e critical actors contributed 3anebridge>s decision to orego
buying a !ackaged ERP solution% using traditional outsourcing or de$elo!ment% or using an
ASP solution% and to instead de$elo! and maintain an in<house solution.
The ollowing is a discussion o the !ractices used by 3anebridge as related to some o the
indings in rele$ant literature. A summary o the characteristics identiied% com!ared to the
literature% is !resented in Table "":
.
5lient<$endor relationshi!. This case demonstrated that networking e$ents or small
business owners would acilitate successul business relationshi!s. This is consistent with the
obser$ations by Da$is% A. et al. 8'00D9 in their study o $oluntary association membershi!s.
"n 3anebridge>s case% constructi$e interactions during networking e$ents 83ern and
Iillcocks% '00'9 ha$e led to a successul outsourcing deal with Source5ode "nc.
)urthermore% 3anebridge and Source5ode $iew each other as a Glong time strategic !artner.H
5ritical actor
As !racticed at 3anebridge
As suggested by literature
Reerences
5lient<$endor relationshi!
5lose% riendly% and somewhat inormal?
.etworking e$ents acilitates outsourcing
5hou et al. 8'00D9% Da$is% *.,. et al. 8'00D9%
originated $ia Gsocial networkingH
business relationshi!. As the client<$endor
3ern and Iillcocks 8'00'9 and Mirani 8'00D9
relationshi! e$ol$es o$er time% the client
Gculti$ates loose% trust<based% network like
relationshi!sH with $endors
5om!any si;e
3anebridge 8client9 and Source5ode "nc.
SMEs tend to use $endor com!anies o a
)o= 8'00D9% 3obayashi<Hillary% 8'00&:'0049
8$endor9 are o similar si;e
similar si;e
and Paul 8'0019
5ontract
.o ormal contract? mainly based on hand
To be successul% e$ery detail must be
,ryson and Sulli$an 8'00C9% 5hou et al.
shakes and mutual trust
s!elled out in the contract to minimi;e risks?
8'00D9% 2enne= and Adelakun 8'00C9 and 3oh
5ritical to the ERP outsourcing relationshi!.
et al. 8'00&9
Howe$er% mutual trust% usually de$elo!ed
through social and !roessional networking
can act as a close substitute or ormal
institutional su!!ort and contract
"ntellectual !ro!erty
5ritical issue was to ormally deine the
Theory suggests that a client !reers
Aubert et al. 8'00&9 and Ialden 8'0049
ownershi! o source code
com!ensation rather than to ha$e !ro!erty
rights. Howe$er% negotiation !ower is as
im!ortant in the di$ision o assets as $alue
creation
-niJue custom
Much custom logic
Assets that are highly s!eciic to an
5hen and Soliman 8'00'9 and 3eil and
unctionality
organi;ation are less a$ailable in the
Tiwana 8'00D9
market!lace and more costly
5om!le=ity o the
Highly structured 8reJuired minor changes
Traditional outsourcing in$ol$ed highly
2enne= and Adelakun 8'00C9% 3ishore et al.
outsourced work
to s!eciications9
structured a!!lication de$elo!ment? trend is
8'0049% Mirani 8'00D9 and Oue et al. 8'0049
toward less<structured !roFects reJuiring
greater client contact% clarity o outsourcing
mission% and !roFect management
5ommunication
5lient reJuired $endor !roFect leader to
5lear communication o obFecti$es can lead
Oue et al. 8'0049
learn and ully understand the com!any>s
to a higher le$el o team commitment and
outsourcing obFecti$es
Fudgment o trust. 5lear inormation
e=change and communication o di$erse
knowledge can lead to a higher le$el o team
!erormance
Aendor>s skills and
5ritical or $endor to ha$e needed skill
6ne o the most im!ortant reasons or "T
Aubert et al. 8'00&9
ca!abilities
8i.e. Fa$a !rogramming9
outsourcing is the le$el o technical skills
"MDS
(0B%&
&C'
.
.
.
.
This GallianceH orm o client<$endor relationshi! is a mature stage o an
outsourcing relationshi!.
5om!any si;e. 3anebridge>s 3ierstead belie$es that one reason their outsourcing
relationshi! worked so well is because the two com!anies are similar in si;e. He
!reers to work with $endors similar in si;e because they oten !ro$ide better
customer ser$ice than the larger $endors% who may gi$e !reerence to more
lucrati$e contracts. Ihile no em!irical research to date has conclusi$ely
established a signiicant ad$antage rom outsourcing client<$endor si;e !arity% the
!rescri!ti$e literature suggests that SMEs tend to use $endor com!anies o a
similar si;e 8)o=% '00D? 3obayashi<Hillary% '00D9. "n this ty!e o client<$endor
relationshi!% the client com!any>s ability to monitor $endor>s !erormance and
reduce the risk o non<com!liance is enhanced 8Ionseok et al.% '00D9. Some%
howe$er% argue that this is because SMEs ha$e diiculties in reaching out to large
"T outsourcers 8Paul% '0019.
6utsourcing contract. 3anebridge has a successul collaboration with their
outsourcing $endor% Source5ode% without the use o a ormal contract. This is not a
recommended best !ractice !articularly or large outsourcing deals. The outsourcing
literature generally considers a detailed and com!rehensi$e contract as a reJuisite
condition or outsourcing success 8,ryson and Sulli$an% '00C? 2enne= and Adelakun%
'00C9. Howe$er% there e=ists some em!irical e$idence su!!orting the notion that
good<aith !artnershi! and mutual trust% as !racticed by 3anebridge% are critical to
outsourcing success 83oh et al.% '00&9. Social network and !rior a$orable
relationshi!s can hel! reduce the transaction cost o ha$ing to !re!are highly
com!rehensi$e contracts% and Gact as substitutes or ormal institutional su!!ortH
85hou et al.% '00D9. A le$el o trust can reduce the transaction costs inherent in a
relationshi! between two !arties. " one side does not trust the other side% then
resources that could be utili;ed elsewhere may be consumed to manage the risk that
the other !arty will not kee! their side o the agreement. The act that there was a !re<
e=isting relationshi! between the !rinci!les o the two com!anies created a trusting
en$ironment where 3anebridge elt comortable that neither side would break their
im!lied agreement.
"ntellectual !ro!erty. According to transaction<cost theory% the collaboration
between a client and its outsourcing !artner creates a $alue 8or asset9 the
ownershi! o which must be agreed u!on by both sides 8Aubert et al.% '00&9. "n
the area o
"T
outsourcing%
sotware
de$elo!men
t results in
creation o
source code
that is
considered
as a
signiicant
i
n
t
e
l
l
e
c
t
u
a
l
!ro!erty. Thereore% it is $ery im!ortant that the "T outsourcing contracts s!eciy
ownershi! o this intellectual !ro!erty 8Ialden% '0049. Although no general
outsourcing contract has been signed between the two com!anies as discussed
abo$e% 3anebridge insisted on% and recei$ed a signed document assigning the
intellectual !ro!erty right o the resulting source code to 3anebridge. This
arrangement !ro$ides a considerable edge to 3anebridge in reducing their risks
o oshoring !articularly in light o recent international agreements% such as
.A)TA% that include !rotecting intellectual !ro!erty among their main
obFecti$es.
5ustom unctionality. The common wisdom in sotware de$elo!ment is to de$elo! a
solid business case or not im!lementing a commercially a$ailable sotware
!
a
c
k
a
g
e
83eil and Tiwana% '00D? Eucas% '0049. " an e=isting !ackage will sol$e your business
!roblem% then it can be a much aster and chea!er solution than insourcing or
outsourcing a!!lication de$elo!ment. This general guideline is e$en more rele$ant in
the case o ERP im!lementation !articularly in an SME en$ironment because the cost
o the customi;ation !rocess is generally higher than the cost o the ERP acJuisition
85hen and Soliman% '00'? #uiescenti et al.% '00D9. "n the case o 3anebridge% once
they reali;ed no e=isting ERP !ackage would !ro$ide their uniJue custom
unctionality% which is a core com!etency% they sto!!ed analy;ing alternati$e
solutions. They wanted the le=ibility to be able to easily modiy the code as their
business !rocessing needs e$ol$e.
.
Task com!le=ity. 6ne o the main determinants o "T sourcing strategy is
degree o task com!le=ity. 6rgani;ations tend to choose more structured and less
com!le= a!!lications to outsource and kee! com!le= ones or in<house de$elo!ment
82enne= and Adelakun% '00C? 3ishore et al.% '0049. The ERP !rograms outsourced by
3anebridge were highly structured reJuiring minor changes to s!eciications. As the
organi;ations that engage in outsourcing gain urther e=!erience% more com!le=
!roFects reJuiring greater client contact and !roFect management are selected to be
outsourced 8Mirani% '00D? Oue et al.% '0049.
.
5ommunication. "n their outsourcing deal% 3anebridge reJuired the $endor>s
!roFect leader to learn and ully understand the com!any>s outsourcing needs and
obFecti$es. Source5ode !ro$ided an onshore contact !oint at 3anebridge>s
headJuarters to ensure the a$ailability o someone who understood the oshore
culture and who can eecti$ely acilitate interaction among di$erse backgrounds o
oshore de$elo!ers. This is highly consistent with research indings in the
outsourcing literature regarding the !ositi$e im!act o inormation e=change and clear
communication o
di$erse knowledge
on the le$el o team
!erormance.
.
Aendor>s
skills. 6ne o the
main reasons o "T
outsourcing is to
take ad$antage o
the $endor>s
technical skills
8Aubert et al.%
'00&9. 3anebridge>s
e=!ectations rom
their outsourcing
$endor included not
only !ro!er le$el o
technical skills% but
also a clear
understanding o
their ERP !roFect
obFecti$es. "t was
critical that the
outsourced "T sta
were e=!erienced
2a$a !rogrammers
!
r
o
i
ci
e
nt
w
it
h
th
e
s
o
t
ware de$elo!ment !roducts being used. Ha$ing a !roFect contact !oint
knowledgeable o 3anebridge>s ERP needs and the technology being used% who
could successully communicate !roFect reJuirements with the oshore !roFect
team% was a critical actor leading to a successul outsourcing $enture. "n the case
o "S outsourcing% i the !ro$ider does not ully understand what the business is
all about the customer>s needs may not be !ro!erly met.
This case re!resents a successul endea$or by a medium<si;ed business to eecti$ely
manage their "T resources or eiciently sol$ing a business !roblem and% in doing so%
!reser$ing an inormation system that !ro$ides them with a com!etiti$e ad$antage
and establishing a new sotware de$elo!ment en$ironment. Se$eral im!ortant
management im!lications rom this case !ro$ide $aluable lessons in the area o SME
outsourcing. )irst% management bestowed the necessary leadershi!% had a highly
acti$e in$ol$ement in the !rocess% and learned how outsourcing can be used as a tool
to !ro$ide selected resources as needed. Management>s acti$e leadershi! role is
considered as a critical actor in successul outsourcing !roFects. "n the case o
3anebridge% to!
management
SME ERP
system
sourcing
strategies
&CC
"MDS
(0B%&
&C&
in$ol$ement
in $arious
roles
including
$endor
selection% negotiations% liaison% and monitoring has contributed to the success o their
ERP outsourcing !roFect. Second% to! management role in establishing an eecti$e
client<$endor relationshi! is critical to the success o SME outsourcing $entures. The
commencement o the 3anebridge<Source5ode relationshi! through initial to!
management meetings has ob$iously contributed to a successul collaboration between
the two com!anies. Third% mutual client<$endor trust can lead to eecti$e outsourcing
!artnershi! des!ite inadeJuacies in% or lack o% a detailed outsourcing contract. Ihile a
detailed% com!rehensi$e ormal contract is highly recommended throughout the
literature% ha$ing a close and trust<based relationshi! can act as a !ro=y to ormal
contracts% and could lower the risks that !reci!itate the need or outsourcing contracts
85hou et al.% '00D? 3oh et al.% '00&9.
The !roFect was recently com!leted 7 within the !lanned sco!e% budget% and time rame.
The monetary sco!e o the !roFect was a!!ro=imately M(40%000 or the hardware and
sotware and M( million or the consulting ser$ices. This is com!arable to the cost o "T
in$estments made by other small businesses% according to a recent 5"6 sur$ey 8Prewitt
and 5osgro$e Iare% '0019.
Reerences
Al<Mashari% M.% +airi% M. and 6ka;awa% 3. 8'00D9% GEnter!rise resource !lanning 8ERP9
im!lementation: a useul road ma!H% "nternational 2ournal o Management @ Enter!rise
De$elo!ment% Aol. C .os (:'% !!. (DL<B0.
Aubert% ,.A.%
Ri$ard% S.
and Patry% M.
8'00&9% GA
transaction
cost model o
"T
outsourcingH%
"normation
@
Management%
Aol. &( .o. 1%
!!. L'(<C'.
,arthelemy%
2. and *eyer%
D. 8'00&9%
GThe
determinants
o total "T
outsourcing:
an em!irical
in$estigation
o )rench and
*erman
irmsH%
2ournal o
5om!uter
"normation
Systems% Aol.
&& .o. C% !!. L(<1.
,ryson% 3.M. and Sulli$an% I.E. 8'00C9% GDesigning eecti$e incenti$e<oriented contracts or
a!!lication ser$ice !ro$ider hosting o ERP systemsH% ,usiness Process Management 2ournal%
Aol. L .o. D% !!. 104<'(.
,ullen% 5.A.% Abraham% T.% *allagher% 3.% 3aiser% 3.M. and Simon% 2. 8'0019% G5hanging "T skills:
the im!act o sourcing strategies on in<house ca!ability reJuirementsH% 2ournal o Electronic
5ommerce in 6rgani;ations% Aol. 4 .o. '% !!. '&<&D.
5armel% E. and .icholson% ,. 8'0049% GSmall irms and oshore sotware outsourcing: high
transaction costs and their mitigationH% 2ournal o *lobal "normation Management% Aol. (C .o.
C% !!. CC<4&.
5hen% E. and Soliman% 3.S. 8'00'9% GManaging "T outsourcing: a $alue<dri$en a!!roach to
outsourcing using a!!lication ser$ice !ro$idersH% Eogistics "normation Management% Aol. (4
.o. C% !!. (B0<L(.
5hou% T.% 5hen% 2. and Pan% S. 8'00D9% GThe im!acts o social ca!ital on inormation technology
outsourcing decisions: a case study o a Taiwanese high<tech irmH% "nternational 2ournal o
"normation Management% Aol. 'D .o. C% !!. '&L<4D.
5huang% T<T.% Rutherord% M.I. and Ein% ,. 8'0019% G6wner:manager characteristics%
organisational characteristics and "T ado!tion in small and medium enter!risesH%
"nternational 2ournal o Management @ Enter!rise De$elo!ment% Aol. & .o. D% !!. D(L<C&.
5ognos 8'00D9% GMigration !lanning guideH% 6ctober% internet document% a$ailable at: www.
cognos.com:!roducts:!owerhouse:downloads:6!enAMSPMigrationP*uide.!d 8accessed
.o$ember '&% '0019.
5usumano% M.%
Mac5ormack% A.%
3emerer% 5.). and
5randall% I. 8'00C9%
GSotware
de$elo!ment
worldwide: the state
o the !racticeH% "EEE
Sotware% !!. 'B<C&.
D
a
$i
s%
A
.%
R
e
n
;
ul
li%
E.
a
n
d
A
ld
ri
c
h%
H
.E
.
8'
0
0
D9
%
G
M
i=
in
g
or
m
at
c
hi
n
g
N
The inluence o $oluntary associations on the occu!ational di$ersity and density o small
business owners> networksH% Iork @ 6ccu!ations% Aol. CC .o. (% !!. &'<1'.
Da$is% *.,.% Ein<Dor% P.% 3ing% I.R. and Tork;adeh% R. 8'00D9% G"T oshoring: history%
!ros!ects and challengesH% 2ournal o the Association or "normation Systems% Aol. 1 .o.
((% !!. 110<L4.
DePom!a% ,. 8'00C9% GTime to outsource ERPNH% 5om!uterworld% Aol. C1 .o. C(% !. CC.
)ish% 3.E. and Seydel% 2. 8'00D9% GIhere "T outsourcing is and where it is going: a study
across unctions and de!artment si;esH% 2ournal o 5om!uter "normation Systems% Aol.
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)o=% *. 8'00D9% GIhat you should know about outsourcing contractsH% 5"6 Maga;ine% 2anuary%
a$ailable at: www'.cio.com:analyst:re!ort&004.html 8accessed .o$ember '&% '0019.
2enne=% M.E. and Adelakun% 6. 8'00C9% GSuccess actors or oshore inormation system
de$elo!mentH% 2ournal o "normation Technology 5ases and A!!lications% Aol. 4 .o. C%
!!. ('<C(.
3arimi% 2.% Somers% T.M. and ,hattacherFee% A. 8'0019% GThe role o inormation systems
resources in ERP ca!ability building and !rocess outcomesH% 2ournal o Management
"normation Systems% Aol. '& .o. '% !!. ''(<D0.
3arlsen% 2.T.% Andersen% 2.% ,irkely% E.S. and 6degard% E. 8'00D9% GAn em!irical study o
critical success actors in "T !roFectsH% "nternational 2ournal o Management @ Enter!rise
De$elo!ment% Aol. C .o. &% !!. 'L1<C((.
3eil% M. and Tiwana% A. 8'00D9% GRelati$e im!ortance o e$aluation criteria or enter!rise
systems: a conFoint studyH% "normation Systems 2ournal% Aol. (D .o. C% !!. 'C1<D'.
3ern% T. and Iillcocks% E. 8'00'9% GE=!loring relationshi!s in inormation technology
outsourcing: the interaction a!!roachH% Euro!ean 2ournal o "normation Systems% Aol. ((
.o. (% !!. C<'0.
3ishore% R.% Agrawal% M. and Rao% H.R. 8'0049% GDeterminants o sourcing during
technology growth and maturity: an em!irical study o e<commerce sourcingH% 2ournal o
Management "normation Systems% Aol. '( .o. C% !!. &1<B'.
3obayashi<Hillary% M. 8'00D9% G"t>s time to ocus on Juality and inormation securityH% 6ctober%
a$ailable at:
www.indiaonesto!.com
:ace'ace:mark.htm
8accessed .o$ember
'&% '0019.
3oh% 5.% Ang% S. and
Straub% D.I. 8'00&9%
G"T outsourcing
success: a
!sychological contract
!ers!ecti$eH%
"normation Systems
Research% Aol. (4 .o.
&% !!. C4D<1C.
Eacity% M. and
Iillcocks% E. 8(LLB9%
GAn em!irical
in$estigation o
inormation
technology sourcing
!ractices: lessons
rom e=!erienceH%
M"S #uarterly% Aol.
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Eee% 2.M.% Miranda%
S.M. and 3im% /.M.
8'00&9% G"T
outsourcing strategies:
uni$ersalistic%
contingency% and
conigurational
e=!lanations o
successH% "normation
Systems Research%
Aol. (4 .o. '% !!.
((0<C(.
Eucas% H.5. 8'0049%
"normation
T
e
c
h
n
ol
o
g
y:
St
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tegic Decisions Making or Management% Iiley% .ew /ork% ./.
Mears% 2. 8'00D9% GSM,s: outsourcing a growth toolH% .etwork Iorld% Aol. 'C .o. B% !.
'L.
Mirani% R. 8'00D9% G5lient<$endor relationshi!s in oshore a!!lications de$elo!ment: an
e$olutionary rameworkH% "normation Resources Management 2ournal% Aol. (L .o. &% !!.
1'<BD.
SME ERP
system
sourcing
strategies
&C4
"MDS
(0B%&
&CD
6lsen% 3.A.
and Saetre% P.
8'0019% G"T
or niche
com!anies: is
an ERP
system the
solutionNH%
"normation
Systems
2ournal% Aol.
(1 .o. (% !!.
C1<4B.
Paul% A. 8'0019% GSi;e im!edes SMEs> tryst with outsourcingH% The Economic Times% 2anuary (D%
a$ailable at: www.oshoringtimes.com:Pages:'001:oshorePnews(&4D.html 8accessed
.o$ember '&% '0019.
Plant% R. and Iillcocks% E. 8'0019% G5ritical success actors in international ERP
im!lementations: a case research a!!roachH% 2ournal o 5om!uter "normation Systems% Aol. &1
.o. C% !!. D0<10.
Prewitt% E. and 5osgro$e Iare% E. 8'0019% GThe state o the 5"6 '00DH% 5"6 Maga;ine% internet
document% a$ailable at: www.cio.com:archi$e:0(0(0D:2A.(S65.!d 8accessed .o$ember '&%
'0019.
#uiescenti% M.% ,ruccoleri% M.% Ea 5ommare% -.% .oto Ea Diega% S. and Perrone% *. 8'00D9%
G,usiness !rocess<oriented design o enter!rise resource !lanning 8ERP9 systems or small and
medium enter!risesH% "nternational 2ournal o Production Research% Aol. && .os (B:(L% !!. C1L1<
B((.
Rooks% *. and SniFders% 5. 8'00(9% GThe !urchase o inormation technology !roducts by Dutch SMEs:
!roblem resolutionH% 2ournal o Su!!ly 5hain Management% Aol. C1 .o. &% !!. C&<&C.
Rottman% 2.I. and Eacity% M.5. 8'00D9% GPro$en !ractices or eecti$ely oshoring "T workH%
M"T Sloan Management Re$iew% Aol. &1 .o. C% !!. 44<DC.
Shehab% E.M.% Shar!% M.I.% Su!ramanian% E. and S!edding% T.A. 8'00&9% GEnter!rise resource
!lanning: an integrati$e re$iewH% ,usiness Process Management 2ournal% Aol. (0 .o. &% !!. C4L<
BD.
Source5ode "nc. 8'0019% G5ustomers write about Source5ode "nc.H% March% a$ailable at: www.
sourcecodein
c.com:clients.
htm
8accessed
.o$ember
'&% '0019.
Aokurka% R.2.
and +ank%
*.M. 8'00D9%
GA systematic
a!!roach to
su!!lier
im!ro$ement
H%
"nternational
2ournal o
Management @
Enter!rise
De$elo!ment%
Aol. C .os (:'%
!!. B4<L1.
Ialden% E.A. 8'0049% G"ntellectual !ro!erty rights and cannibali;ation in inormation technology
outsourcing contractsH% M"S #uarterly% Aol. 'L .o. &% !!. DLL<1'0.
Ionseok% 6.H.% *alli$an% M.2. and 3im% 2.I. 8'00D9% GThe market>s !erce!tion o the
transactional risks o inormation technology outsourcing announcementsH% 2ournal o
Management "normation Systems% Aol. '' .o. &% !!. '1(<C0C.
Oue% /.% Sankar% 5.S. and Mbarika% A.I. 8'0049% G"normation technology outsourcing and $irtual
teamsH% 2ournal o 5om!uter "normation Systems% Aol. &4 .o. '% !!. L<(D.
)urther reading
)erguson% R.,. 8'00&9% GSAP% HP team on ERP or SM,sH% eIeek% Aol. '( .o. &&% !. (4.
Morgan% R.E. 8'00C9% G6utsourcing: towards the Qshamrock organi;ation>H% 2ournal o *eneral
Management% Aol. 'L .o. '% !!. 4<4'.
5orres!onding author
Deb Sledgianowski can be contacted at: Deb.sledgianowskiRhostra.edu
To !urchase re!rints o this article !lease e<mail: re!rintsRemeraldinsight.com 6r $isit our web site or urther details:
www.emeraldinsight.com:re!rints

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