Global network of information technology can reduce costs, improve quality, reduce response time, and disperse risks. But flexible IT networks requires a lot of manual control and micromanagement can significantly increase transaction costs and reduce any potential savings. Most of the micro-management is the result of training and labor-intensive management begins a relationship with a new partner. The authors use data from interviews with customers and suppliers to identify 15 developing best practices in the fight against offshore IT providers for each stage of development. In the early stages of development of offshore IT network, the authors suggest that when choosing the right place for your offshore activities is critical and that it may be best to start with a few small pilot programs. As offshoring efforts become more mature, the authors recommend diversify your supplier portfolio to spread risk and increase competition. They will also discuss how to structure contracts and break the project so as to provide incentives and protection of intellectual property. The article describes several practices that allow for more value-added practice time in full and mature global network does not exist, including, as overlapping networks work best for provider to provider knowledge transfer. "Hide
by Joseph W. Rottman, Mary C. Lacity Source: MIT Sloan Management Review 10 pages. Publication Date: April 1, 2006. Prod. #: SMR204-PDF-ENG
Related Case Solutions & Analyses:
Hindalcos Acquisition of Novelis: The Making of a Giant
Spreading Happiness: Warm Fuzz Cards
Strategic Risk Approach to Knowledge Management
Dynamic Synchronization of Strategy and Information Technology
Entropia (A)
DaimlerChrysler Merger: The Quest to Create One Company
Torrington Wuxi Bearings: From a State-owned Enterprise to a Sino-American Joint Venture
YAAS’s Service Center (B)
How Fast Fashion Works: Can It Work for You, Too?
Sri Lanka Transport (B): The Railroad and the Port
