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A review of the IT outsourcing empirical literature and future research directions

Published on Dec 1, 2010in Journal of Information Technology 3.13
· DOI :10.1057/jit.2010.21
Mary C. Lacity45
Estimated H-index: 45
(UMSL: University of Missouri–St. Louis),
Shaji Khan9
Estimated H-index: 9
(UMSL: University of Missouri–St. Louis)
+ 1 AuthorsLeslie P. Willcocks63
Estimated H-index: 63
(LSE: London School of Economics and Political Science)
An enormous amount of information has been produced about the IT outsourcing phenomenon over the last 20 years, but one has to look to the academic literature for consistent, objective, and reliable research approaches and analyses. Our review finds that, in practice, the academic literature on IT outsourcing has very much honored both rigor and relevance in the ways in which research has been conducted. Our central purpose in the review was to answer two research questions: What has the empirical academic literature found about information technology outsourcing (ITO) decisions and outcomes? What are the gaps in knowledge to consider in future ITO research? To answer these questions, we examined 164 empirical ITO articles published between 1992 and 2010 in 50 journals. Adapting a method used by Jeyaraj et al. (2006), we encapsulated this vast empirical literature on ITO in a way that was concise, meaningful, and helpful to researchers. We coded 36 dependent variables, 138 independent variables, and 741 relationships between independent and dependent variables. By extracting the best evidence, we developed two models of outsourcing: one model addressed ITO decisions and one model addressed ITO outcomes. The model of ITO decisions includes independent variables associated with motives to outsource, transaction attributes, client firm characteristics, and influence sources. The model of ITO outcomes includes independent variables associated with client and supplier capabilities, relationship characteristics, contractual governance, decision characteristics, and transaction attributes. We also examined the interactions among broad categories of variables and the learning curve effects resulting from feedback loops. Overall, ITO researchers have a broad and deep understanding of ITO. However, the field continues to evolve as clients and suppliers on every inhabited continent participate actively in the global sourcing community. There is still much research yet to be done. We reviewed recent studies that have identified gaps in current knowledge and proposed future paths of research pertaining to strategic motivations, environmental influences, dynamic interactions, configurational and portfolio approaches, global destinations, emerging models, reference theory extension, and grounded theory development.
  • References (187)
  • Citations (271)
Published on Feb 1, 2016
J. Barhtelemy9
Estimated H-index: 9
(ESSEC Business School),
Dominique Geyer4
Estimated H-index: 4
An increasingly large number of firms outsource their Information Technology (IT) to outside vendors. Firms that contemplate IT outsourcing have two alternatives: (1) outsource part of their IT activity (i.e., “selective outsourcing”) or (2) outsource their entire IT activity (i.e., “total outsourcing”). It has been repeatedly reported that total IT outsourcing efforts have far lower success rates than selective ones. Using primary data collected both in France and Germany, we investigate the re...
Published on Feb 1, 2016
Terry R. Adler8
Estimated H-index: 8
(NMSU: New Mexico State University)
This study examines the social context of trust with regard to team-based designs in the novel environment of negotiating information technology (IT) work that will be outsourced by organizations. The effects of organizational social systems, internal and external team factors, and emergent perspectives were synthesized into a conceptual model for understanding these underlying factors and processes that affect the development of collective trust among team members in the contract negotiation ph...
Published on Feb 1, 2016
John Benamati16
Estimated H-index: 16
(Miami University),
T. M. Rajkumar11
Estimated H-index: 11
(Miami University)
The outsourcing industry has grown rapidly. This study synthesizes factors from prior outsourcing research and the Technology Acceptance Model (TAM) with information gathered from structured interviews of nine IT executives from seven companies to propose a model of outsourcing acceptance.TAM suggested that perceived usefulness and ease of use mediate the effects of other variables on users' attitudes toward technology. The model in this study suggests that perceived usefulness and ease of use o...
Published on Feb 1, 2016
Sung Kim1
Estimated H-index: 1
(MSU: Minnesota State University, Mankato),
Young-Soo Chung3
Estimated H-index: 3
(CNU: Chungnam National University)
The primary purpose of this study is to investigate the factors contributing to the success and failure of IS outsourcing relationships between client firms and vendors. The proposed research model is based on the relational exchange theory, communication behavior, and transaction cost theory. A survey study of 207 IS outsourcing relationships of U.S. firms indicates that (1) vendor capability, solidarity, continuity expectation, flexibility, and monitoring of the vendor are positively related t...
Published on Mar 1, 2011in Journal of Information Technology 3.13
Jason Dedrick35
Estimated H-index: 35
(SU: Syracuse University),
Erran Carmel28
Estimated H-index: 28
(AU: American University),
Kenneth L. Kraemer60
Estimated H-index: 60
(University of California, Berkeley)
As the offshoring of knowledge work has accelerated, theoretical models to explain the phenomenon have not kept up. Most theoretical models assume a static transactional relationship from various factors to a binary offshoring decision. Such models do not take into account the mix of sourcing choices at the level of a firm, nor do they consider dynamic changes over time. To help fill these gaps, we use five case studies on offshore migration of software work by major US companies. Data were coll...
Published on Jan 1, 2011
Leslie P. Willcocks63
Estimated H-index: 63
Sara Cullen9
Estimated H-index: 9
Andrew Craig5
Estimated H-index: 5
List of Figures List of Tables Acknowledgements Series Preface About the Authors Introduction: Still on the Learning Curve Foundations Moving to the Strategic Agenda Building the Relationship Advantage Selecting and Leveraging Suppliers Keeping Control Through Core Retained Capabilities Collaborating to Innovate - The Next Phase Key Practices The Governance Charter - Overseeing the Outsourcing Arrangement Contract Management Strategy The Contract Scorecard: Design and Measurement Disengagement: ...
Published on Jun 1, 2010in Journal of Strategic Information Systems 4.00
Lior Fink10
Estimated H-index: 10
(BGU: Ben-Gurion University of the Negev)
This paper explores the value of a configurational approach to IT outsourcing by developing a framework for IT outsourcing effectiveness. Taking a process view of outsourcing and drawing on the relational view of the firm, the framework identifies four high-level dimensions that correspond to an organization's resource position in four key areas: organizational IT value position, organizational IT asset position, relational asset position, and relational capability position. A novel structured m...
Leslie P. Willcocks63
Estimated H-index: 63
(LSE: London School of Economics and Political Science)
Purpose – This paper aims to distill research findings that will influence CEO and top team behaviour.Design/methodology/approach – The findings are based on case study research into 650 plus organisations and their outsourcing arrangements in Europe, Asia Pacific and USA.Findings – CEOs have five reasons for ensuring IT‐based services outsourcing is included in their strategy discussions. IT outsourcing impacts upon a firm's market value. The sheer size of outsourcing expenditure merits senior ...
Mohammed A. T. AlSudairi4
Estimated H-index: 4
(KSU: King Saud University),
Yogesh Kumar Dwivedi46
Estimated H-index: 46
(Swansea University)
Purpose – In recent years a large number of studies have appeared on information systems (IS)/information technology (IT) outsourcing related issues but scattered in a number of distantly related publishing outlets which may hamper the use of such published resources and repetition of research conducted by various researchers. The purpose of this paper is to conduct a systematic survey of the literature pertaining to research on IS/IT outsourcing.Design/methodology/approach – The research aim wa...
Published on Dec 1, 2009in Journal of International Marketing 3.38
Janet Y. Murray25
Estimated H-index: 25
(UMSL: University of Missouri–St. Louis),
Masaaki Kotabe48
Estimated H-index: 48
(TU: Temple University),
Stanford A. Westjohn11
Estimated H-index: 11
(UT: University of Toledo)
Abstract This research contributes to the understanding of global sourcing strategy of knowledge-intensive business services (KIBSs) by offering an explanation for the differential performance among firms, even when they use similar global sourcing strategies. Using a systems integrator as the sourcing firm's perspective, the authors argue that complex KIBSs involve a complicated mixture of interfaces in that the performance of an individual KIBS is insufficient in defining the overall performan...
Cited By271
Published on Oct 1, 2019in International Journal of Information Management 5.06
Fangjian Gao2
Estimated H-index: 2
(University of Cologne),
Ali Sunyaev15
Estimated H-index: 15
(KIT: Karlsruhe Institute of Technology)
Abstract Cloud computing is an IT service paradigm that can, if used meaningfully, enhance traditional health IT approaches and offer major benefits to the healthcare industry. However, its adoption by healthcare organizations has been accompanied by diverse challenges that could impede its meaningful use. Decisions about its adoption should be made after serious consideration of relevant industry-specific factors. Whereas the literature has focused on cloud computing adoption in general, the in...
Quang “Neo” Bui (RIT: Rochester Institute of Technology), Ezekiel Masao Leo (RIT: Rochester Institute of Technology), Olayele Adelakun4
Estimated H-index: 4
(DePaul University)
Abstract Effectively managing Information Technology outsourcing (ITO) requires integration of conceptually distinct and sometimes contradicting factors. For instance, ITO “best practices” for cost reduction can inhibit a firm’s innovativeness. To address these challenges, we build on governance and capability perspectives and employ a set-theoretic approach to examine ITO practices in 27 firms. Our exploratory study reveals four distinct ITO configurations, of which three lead to positive outco...
Published on Feb 1, 2019in Journal of Information Technology 3.13
Forough Karimi-Alaghehband1
Estimated H-index: 1
(HEC Montréal),
Suzanne Rivard37
Estimated H-index: 37
(HEC Montréal)
Grounded in the dynamic capabilities perspective, our study addresses the question of how information technology outsourcing capabilities can interact with other IT strategic capabilities to enable...
Published on Jun 1, 2019
Dennis D. Fehrenbacher3
Estimated H-index: 3
(Monash University),
Martin Wiener9
Estimated H-index: 9
(Bentley University)
Abstract Adding to the collective knowledge on how to craft effective IT outsourcing contracts, this study examines the effects of service level agreement (SLA) framing in terms of bonus versus penalty clauses on two important factors of outsourcing success: service providers' knowledge-sharing willingness and commitment (effort-related vs. affective). Results from an experiment with 198 IT professionals and novices show that penalty framing decreases knowledge-sharing willingness and affective ...
Published on Apr 1, 2019in Journal of Business Research 4.03
Daniel Gozman3
Estimated H-index: 3
(University of Reading),
Leslie P. Willcocks63
Estimated H-index: 63
(LSE: London School of Economics and Political Science)
Abstract The pervasive adoption of outsourcing and Cloud technologies proceeds apace, but the challenges and risks inherent in Cloud arrangements are causing concern amongst regulators globally. How well prepared are financial services multinationals for regulatory compliance? Cloud based Fintech companies are disrupting traditional banking models, signaling that highly regulated firms must adopt Cloud technologies. The paper focuses on understanding specific risks in relation to Cloud adoption,...
Published on Mar 1, 2019in Journal of Information Technology 3.13
Aleksandre Asatiani2
Estimated H-index: 2
(Aston University),
Esko Penttinen8
Estimated H-index: 8
Ashish Kumar3
Estimated H-index: 3
(Aalto University)
Prior literature has identified several outsourcing motivations, such as cost reduction and access to expertise, and deciphered the influence of these variables on outsourcing decisions. In another stream of outsourcing studies, researchers have gauged the degree of outsourcing, unearthing how companies may choose to outsource a set or processes instead of the whole business function. In this article, we draw on both of these streams of outsourcing research to study the relationship between outs...
Ashish Malik9
Estimated H-index: 9
(Northumbria University),
Vijay Pereira9
Estimated H-index: 9
(University of Wollongong in Dubai),
Shlomo Y. Tarba23
Estimated H-index: 23
(University of Birmingham)
AbstractRecent studies have started exploring the linkages between organisational ambidexterity (OA) and HRM practices. OA is noted as a critical resource in achieving product, process, and business model innovations. By adopting an inductive case study of a US MNC subsidiary in India, we found empowerment-focused HRM practices were being used for exploration of new ideas and efficiency-focused HRM practices were adopted for the exploitation of the organisation’s existing strengths. Empowerment-...
Published on Feb 1, 2019
Euripidis N. Loukis20
Estimated H-index: 20
(University of the Aegean),
Marijn Janssen41
Estimated H-index: 41
(TU Delft: Delft University of Technology),
Ianislav Mintchev1
Estimated H-index: 1
Abstract Software as a Service (SaaS) is increasingly used by firms for sourcing business application software. SaaS can enable a cost reduction and quality improvement of existing operations and provide rapid and low-cost innovation. However, decision makers are unclear about how they can benefit from SaaS. This study contributes to filling this knowledge gap by investigating factors that determine the magnitudes of operational and innovational benefits and firm performance. These research hypo...
Published on Jan 2, 2019in Information Systems Management 2.04
Michael Könning (TUD: Dresden University of Technology), Markus Westner3
Estimated H-index: 3
Susanne Strahringer5
Estimated H-index: 5
(TUD: Dresden University of Technology)