A managerial application of system dynamics modeling to outsourcing

Abstract

Purpose -The purpose of this paper is to use modeling and simulation to investigate the puzzling performance problems that plagued the project outsourcing in term of poor quality and delivery delay, and apply the appeal and power of system dynamics modeling as a managerial approach to improve learning and intervention in complex situations to South African context where little or no such attempt had been made. Design/methodology/approach -This work is based on exploratory use of system dynamics modeling to study a web of quality and productivity problems that plagued a company as a result of adopting outsourcing as a policy to bolster productivity and service delivery. Findings -A significant finding from this research is that outsourcing has the propensity to perpetuate any trend it dominantly generates as a result of strong positive feedback loops. It also made explicit the dynamic processes that lead to certain observations that have been made in conventional management literature about the effects of outsourcing.Research limitations/implications -The major limitation to this study is availability of information in form of certain operating data need for calibration thus imposing few aggregations on the model. Originality/value -The authors believe that this work has a degree of originality as it applies system dynamics modeling to public sector outsourcing which not being done before. It also made a significant finding by uncovering possible counteractive effect of outsourcing on internal staff.

A dynamic model of strategic outsourcing with emphasis on human resources and work experience in power industry of Iran

“…The results of this study were consistent with studies such as Lisse (2014), Block and Pickl (2014), Ojugbele and Bodhanya (2015), Shiboud and Assaf (2019), and the results of Al Hallak et al (2019). In researches that have consistent results, they point out that Outsourcing should be done very cautious.…”

“…Integration of this approach with a dynamic model which is for prediction of future can able the researchers to formulate qualitative factors too. So, the strength of this study over previous studies such as Al Hallak et al (2019), Shafiei Nikabadi andHakaki (2019) and Shiboud and Assaf (2019), Ojugbele and Bodhanya (2015), Lisse (2014), Block and Pickl (2014) is the formulation of qualitative factors. Another positive point of this study is that it could find roots of consequences and make comprehensible offers for top managers.…”

“…To this end, improving outsourcing has been attempting to improve outsourcing in the organization with emphasis on human resources. In Ojugbele and Bodhanya's (2015) research, the results also indicate that in a dynamic model, positive feedback loops enhance the occurrences inside the loop.…”

“…For example, Block and Pickl (2014) have looked at the quality of human resources performance and, in the Lisse (2014), quantitatively trained employees in their job performance. In the next study, only a small dimension of the factors is taken into account (Ojugbele and Bodhanya, 2015). Meanwhile in some studies, it can be noted that for qualitative variables, formulation has been done using methods such as fuzzy DEMATEL, and VANSIM software functions have not been used in studies by Shafiei Nikabadi and Hakaki (2019) and Al Hallak et al (2019).…”

Outsourcing Strategies in Public Services under Budgetary Constraints: Analysing Perceptions of Public Managers

“…However, Dahlström et al (2018) showed that the excessive use of outsourcing in public services can decrease quality. For these reasons, several authors have proposed that service performance evaluations are already outsourced in the public sector (Ahimbisibwe et al, 2012;Cordella & Willcocks, 2010;Duhamel et al, 2014;Ojugbele & Bodhanya, 2015;Rönnbäck & Witell, 2009;Waal & Kerklaan, 2010).…”