A hybrid algorithm of BSC and QFD to determine the criteria affecting implementation of successful outsourcing


Mohammad Hemati, Azim Zarei, Mosayeb Karami and Hamidreza Karkehabadi


Successful organizations share some identical factors that pave the way for their success. Among these factors, strategic management is the key to success for organizations to contribute more to the competitive world market of today. In this respect, the pivotal role of outsourcing cannot be denied. This research parallelizes the criteria affecting the outsourcing success as presented in Elmuti model with the Balanced score card method in the Tose'e Ta'avon Bank. In this research, questionnaires and interviews with experts helped determine the strategic goals at four perspectives of balanced score card method (at Tose'e Ta'avon Bank) and the relative weights were computed for each of balance score card (BSC) perspectives by using AHP method. As the next step, the indexes were prioritized by applying the quality function development(QFD) technique and considering strategic goals at four perspectives in section "WHAT" and the outsourcing success criteria of Elmuti model in section "HOW". At the end of algorithm, the results are compared with the Elmuti method. Based on the results, the hybrid proposed technique seems to perform better than Elmuti.


DOI: j.msl.2011.11.002

Keywords: Outsourcing ,BSC ,Performance appraisal ,QFD ,

How to cite this paper:

Hemati, M., Zarei, A., Karami, M & Karkehabadi, H. (2012). A hybrid algorithm of BSC and QFD to determine the criteria affecting implementation of successful outsourcing.Management Science Letters, 2(2), 655-664.


References

Almannai, B., Greenough, R.M., & Kay, J.M. (2008). A decision support tool based on QFD and FMEA for the selection of manufacturing automation technologies. Robotics and Computer-Integrated Manufacturing, 4(24), 501-507.

Bush, A.A., Taiwana, A., & Tsuji, H. (2008). An empirical investigation of the drivers of software outsourcing decisions in Japanese organizations. Information and Software Technology, 50(6), 499–510.

Davis, S., & Albright, T. (2004). An investigation of the effect of Balanced Scorecard implementation on financial performance. Management Accounting Research, 15, 135–153.

Elmuti, D. (2003). The perceived impact of outsourcing on organizational performance. American Journal of Business, 18(2), 33-41.

Huang, H.C. (2009). Designing a knowledge-based system for strategic planning: A balanced scorecard perspective. Expert Systems with Applications, 36(1), 209-218.

Karimi Alaghehband, F., Rivard, S., Wu, S., & Goyette, S. (2011). An assessment of the use of transaction cost theory in information technology outsourcing. The Journal of Strategic Information Systems, 20, 125–138.

Koskela, E., & Stenbacka, R. (2009). Equilibrium unemployment with outsourcing under labor market imperfections. Labor Economics, 16, 284–290.

Kolawa A. (2004). Outsourcing is not the enemy. WallStreet Journal (Eastern Edition), February 24. pB-2.

Lacity, M., & Hirschheim, R. (1993). The Information Systems Analysis: Myths, Metaphors, and Realities. New York: John Willey and Sons.

Lamminmaki, D. (2011). An examination of factors motivating hotel outsourcing. International Journal of Hospitality Management, 30, 963– 973.

Lee, J.N., & Choi, B. (2011). Effects of initial and ongoing trust in IT outsourcing: A bilateral perspective. Information & Management, 48, 96–105.

Lee, S.F., Lo, K.K., Leung, R.F., & Sai, K.A. (2000). Strategy formulation framework for vocational education: Integrating SWOT Analysis, Balanced Scorecard, QFD Methodology and MBNQA educational criteria. Managerial Auditing Journal, 15(8), 407-423.

Wu, H.Y., Tzeng, G.H., & Chen, Y.H. (2009). A fuzzy MCDM approach for evaluating banking performance based on Balanced Scorecard. Expert Systems with Applications, 36(6), 10135-10147

James, J. H., Liou, H. S., Wang, C.C, & Hsu, S. L. ( 2011). A hybrid model for selection of an outsourcing provider. Applied Mathematical Modelling, 35, 5121–5133.

Makhijani N., Creelman, J. (2008). How leading organizations successfully implement corporate strategy with the balanced scorecard. The OTI Thought Leadership Series, 1, 1-16.

Moon, Y. (2010). Efforts and efficiency in partial outsourcing and investment timing strategy under market uncertainty. Computers & Industrial Engineering, 59, 24–33.

Neely, A., Mills, J., Gregory, M., Richards, H., Platts, K., & Bourne, M. (1996). Getting the Measure of Your Business. Works Management, University of Cambridge.

Ndubisi, N.O. (2011), Mindfulness, reliability, pre-emptive conflict handling, customer orientation and outcomes in Malaysia’s healthcare sector. Journal of Business Research, 40, 109–117.

Rigby, D. K. (2001). Management Tools, Global Results. Annual Survey of Senior Executives: Survey, Bain & Company, Boston MA, available at: www.bain.com.

Shi, X., Tsuji, H., & Zhang, S. (2011). Eliciting experts’ perceived risk of software offshore outsourcing incorporating individual heterogeneity. Expert Systems with Applications, 38: 2283–2291.

UllahKhan, S., Niazi, M., & Rashid, A. (2011). Factors influencing clients in the selection of offshore software outsourcing vendors: An exploratory study using a systematic literature review. Journal of systems and software, 84(4), 686-699.

Wu, H.Y., Lin, Y.K., & Chang, C.H. (2011). Performance evaluation of extension education centers in universities based on the balanced scorecard. Evaluation Program Planning, 34(1), 37-50.

Tangen, S. (2004). Professional practice performance Measurement: from philosophy to practice. International Journal of Productivity and Performance Management, 53(8), 26-37.

Thomas, P. (2004). Small business – case study: the time to diversify is before it’s too late. WallStreet Journal, (EasternEdition), March 2, p. B4.

Tjader, Y.C., Shang, J.S., & Vargas, L.G. (2010). Offshore outsourcing decision making: A policy-maker’s perspective. European Journal of Operational Research, 207(1), 434–444.