IT Outsourcing: A Comparison between the Romanian and the Dutch Banking Systems

By Elena, Ciolac Camelia; Silvius, A. J. Gilbert | Journal of International Technology and Information Management, April 2010 | Go to article overview
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IT Outsourcing: A Comparison between the Romanian and the Dutch Banking Systems


Elena, Ciolac Camelia, Silvius, A. J. Gilbert, Journal of International Technology and Information Management


INTRODUCTION

The subject of IT outsourcing captured a special attention among researchers in time. Solli-Saether and Gottschalk (2010) realized a synthesis of the main contributions to the IT outsourcing theory and declare that "IT outsourcing- the practice of transferring IT assets, leases, staff and management responsibility for delivery of services from internal IT functions to third-party vendors- has become an undeniable trend". As knowledge and competitive advantage play a mediating role between firm extent of IT usage and its financial performance (Maiga & Jacobs, 2009), IT outsourcing can affect directly the IT knowledge and the competitive advantage of the banks and indirectly its overall performance. Here, an important aspect is defining which IT parts are strategic to a company in general, and to a bank in particular, and an answer is provided by Evans and Neu (2008) stating that "most core technology within an industry is tactical, rather than strategic" and that the Porter's Five Force model can be a valuable tool in identifying them.

This paper aims to identify the features of IT outsourcing in the Dutch and in the Romanian banking systems. We chose the two banking systems for comparison, as both of them have an oligopolistic structure (OECD, 2007; Gus & Hoarca, 2006), belong to countries members of the European Union (The Netherlands is one of the founding members, while Romania became member in 2007) and yet registered different dynamics over time. From this point of view, this research compares the approach to IT outsourcing in an evolving banking environment that emerged after 1990s (in Romania) and a more established one (in The Netherlands).

The features of IT outsourcing are reviewed and analyzed in literature considering the broader environment of the organization and the information usage within it (Fraihat, 2006; Wei & Peach, 2006). Both Dutch and Romanian literature from the last five years focused on this topic. While the Romanian studies focused on theoretical aspects, we could identify a more practical approach in articles written by Dutch researchers.

In the Dutch literature, dating from the last five years, some of the studies that debated IT outsourcing include are: Roe, Smeelen and Hoefeld (2005) that address the topic from an employee's perspective, Radkevitch, Van Heck and Koppius (2006) that analyze the opportunity of SMEs' access to offshore resources by means of online markets, Aydin and Bakker (2008) discuss the decision-making process from a knowledge-based perspective using decision primitives, Ponisio and Vruggink (2009) that underline the need for standards and modularization in monitoring outsourced software development projects.

In the Romanian literature from the last five years, this subject was reflected in studies such as: Mesnita and Dumitriu (2005) that present an overview of the IT outsourcing process components and discuss a SWOT analysis of the Romanian market, Boldea and Brandas (2007) that underlines the core concepts of this subject and debate the IT outsourcing theories, Brandas(2010) that shows the risks associated with IT outsourcing and explains the associated auditing process on both client- and supplier- sides.

With respect to these literature trends, this study is a practical approach to the field of IT outsourcing in the privileged field of banking, which is little represented from this point of view. This research extracts knowledge from press releases and interviews with IT managers coming from the banking industry, and is targeted on undergoing IT outsourcing contracts. This perspective assures a higher degree of accuracy in terms of actual practices. Therefore it is not intended to analyze the desired state of art, but the actual practices in the field of IT outsourcing in banks. As this research is committed to a synthetic overview of concepts, it focuses on the elements involved in an outsourcing contract and not on the banks themselves.

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