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Capabilities of large services outsourcing firms: the "outsourcing plus staff transfer model" in EDS and IBM

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  • Marcela Miozzo
  • Damian Grimshaw

Abstract

How do service suppliers that arise from outsourcing of business functions develop their organizational capabilities? Drawing on the cases of EDS and IBM in the IT outsourcing sector, the article highlights the process by which knowledge is transferred across the client--supplier interface. These services outsourcing firms have developed a novel form of skill acquisition--staff transfer from client organizations--which facilitates their rapid expansion and provides an effective means to acquire client-specific knowledge and develop competences. The challenge for these firms is to develop distinctive capabilities through combining client- (and industry-) specific knowledge brought by staff transferred from multiple client organizations and company-wide processes. These processes capture and diffuse a common system of routines in the services supplier across all different projects and countries of operation. The strategic response of these services outsourcing firms is a phased learning model designed to bring greater productivity and efficiency in the provision of an increasing number of projects. Copyright 2011 The Author 2011. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

Suggested Citation

  • Marcela Miozzo & Damian Grimshaw, 2011. "Capabilities of large services outsourcing firms: the "outsourcing plus staff transfer model" in EDS and IBM," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 20(3), pages 909-940, June.
    • Handle: RePEc:oup:indcch:v:20:y:2011:i:3:p:909-940
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    File URL: http://hdl.handle.net/10.1093/icc/dtr014
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    Cited by:

    1. Miozzo, Marcela & Desyllas, Panos & Lee, Hsing-fen & Miles, Ian, 2016. "Innovation collaboration and appropriability by knowledge-intensive business services firms," Research Policy, Elsevier, vol. 45(7), pages 1337-1351.
    2. Jorge Britto & Leonardo Costa Ribeiro & Lucas Araújo & Eduardo da Motta e Albuquerque, 2017. "Knowledge flows, firms' competencies, and patent citations: an analysis of the trajectory of IBM," Textos para Discussão Cedeplar-UFMG 561, Cedeplar, Universidade Federal de Minas Gerais.
    3. D’Ippolito, Beatrice & Miozzo, Marcela & Consoli, Davide, 2014. "Knowledge systematisation, reconfiguration and the organisation of firms and industry: The case of design," Research Policy, Elsevier, vol. 43(8), pages 1334-1352.
    4. Lehrer, Mark & Ordanini, Andrea & DeFillippi, Robert & Miozzo, Marcela, 2012. "Challenging the orthodoxy of value co-creation theory: A contingent view of co-production in design-intensive business services," European Management Journal, Elsevier, vol. 30(6), pages 499-509.
    5. DâIppolito,Beatrice & Miozzo,Marcela & Consoli,Davide, 2012. "Knowledge systematisation and the development of a business function: the case of design," INGENIO (CSIC-UPV) Working Paper Series 201202, INGENIO (CSIC-UPV), revised 30 May 2012.

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