Dynamic Outsourcing of Services

The concept of outsourcing has its roots in the manufacturing industry where products are often assembled using standardised components produced by partnering companies. However, driven by information technology, services today are also subject to standardisation and subsequently more and more examples of service outsourcing can be observed in practice. The outsourcing process in general requires to describe service offers and service requests, to match providers and consumers, to negotiate the terms and conditions of the contract, and finally to setup the provisioning of the service (triggering execution, billing etc.). These coordination steps can be performed in an electronic market, which allows the exploitation of both, electronic market characteristics such as low transaction cost, and generic service characteristics such as intangibility, to increase the efficiency of the outsourcing process. But the emergence of electronic markets for services also enables a change to the outsourcing process itself. The final state of the traditional outsourcing process is an outsourcing relationship involving one consumer and one provider organisation that covers a certain number of service provisions. In contrast to this, dynamic outsourcing is an ongoing process that involves a set of provider organisations competing in an electronic market for services. Whenever a service needs to be performed, the consumer organisation dynamically selects the ‘best’ provider for this specific service request. This dynamic relationship requires strong support for automation in the coordination process and a high degree of interoperability among the providers and consumers. Many standards have been suggested to address interoperability in electronic markets. These standards can be classified in semantic standards for certain industries and in meta-standards, which define the general nature of interfaces or messages. An analysis of the latter shows, that these standards mainly focus on the knowledge phase of electronic markets, lacking support for processes in the intention and agreement phase as well as the service management issues in the settlement phase.