IT outsourcing and firm-level performance: A transaction cost perspective

We analyzed the effect of the level of low asset specificity IT outsourcing on firm-level financial performance. We used transaction cost economics (TCE) as the theoretical basis to explain the effect of the level of network and telecommunication services outsourced on financial performance. An analysis of 1444 Integrated Healthcare Delivery Systems revealed that higher levels of network and telecommunication services outsourced were associated with superior financial performance. Specifically, each additional network and telecommunication service outsourced resulted in an average $3,120,000 in savings, a 25% increase in profit. In addition, increases in IT budgetary expenditures were found to be associated with increased financial performance. Our study provided preliminary support for the use of asset specificity to guide outsourcing decisions. In particular, IT activities that have become commodities (having ‘low specificity’) should be outsourced to improve the firm's financial performance

Managing Security Service Providers: Issues in Outsourcing Security

The issue of trust and risk in outsourced relationships was extended beyond traditional outsourcing models with the introduction of Application Service Providers (ASPs). As ASPs evolve, Managed Security Service Providers (MSSPs) have emerged as external providers of security for firms facing increasing information assurance threats. This research-in-progress paper develops a conceptual model of MSSP adoption; it investigates variables that affect the adoption and management of the relationship (trust, risk, reputation and relationships with vendors)

BI as a service: an attempt to understand the leading adoption factors

The research question of this study attempts to identify which are the leading factors for the adoption of a sourcing Software as a Service model for Business Intelligence applications. The objective is to build a model containing enabling factors for the adoption of BI solutions. We seek to expand on the Benlian et al. model which is based on a theoretical framework including axioms from Transaction Cost Theory, Resource Based View, Theory of Planned Behavior. In order to better understand the phenomenon under investigation, we will use also the Organizational Culture Theory. It is a theoretical research in progress

The Multidimensionality of IT Outsourcing Risks

Abstract: IT outsourcing is a complex endeavour with multiple sources of risks. The body of knowledge on the subject is vast but scattered. Our project aims to create an integrated risk and controls framework. This paper discusses the multidimensional nature of outsourcing risks that needs to be addressed when such framework is developed. This paper presents findings from two workshops where risks, their classifications and dimensions where discussed by a group of experienced risk practitioners. The results highlight that practitioners see strategy, stakeholders and the different phases of the outsourcing as important dimensions that create risk and need to be addressed when organisations are planning or running an outsourcing venture. This research confirms that there are a number of dimensions in IT outsourcing risk and it has provided depth to the understanding of these dimensions

Research Agenda for Studying Open Source II: View Through the Lens of Referent Discipline Theories

In a companion paper [Niederman et al., 2006] we presented a multi-level research agenda for studying information systems using open source software. This paper examines open source in terms of MIS and referent discipline theories that are the base needed for rigorous study of the research agenda

IT Outsourcing Success in Healthcare Industry: Build Your Capabilities on Multiple Fronts within the Institutional Framework

In this manuscript we report the findings from an in-depth case study about the factors that determine IT outsourcing success in the healthcare industry. Healthcare organizations in Taiwan are faced with increasing institutional pressures in the forms of hospital accreditation systems and national insurance program requirements. We found that organizations appeared to have adopted similar outsourcing practices under institutional pressures. However, whether or not an organization could successfully implement an outsourcing decision depends on the organization’s IT capabilities, governance capabilities, and capabilities to manage its relationship with the vendor. Research implications of these results are discussed

Adaptability in IT Sourcing: The Impact of Switching Costs

Firms have an increasing need today to develop a sourcing strategy that is more strategic than in years past. Firms need to maintain a strategy of adaptability in order to mitigate the risks associated with outsourcing. A major influence on the adaptability of a firm in the short- and long-term is the switching costs associated with bring an outsourced activity back inhouse (backsource) or switching to another vendor. As switching costs increase, firms are increasingly “locked in” to a vendor. Firms should therefore work to decrease the switching costs so that they are more able to switch to another vendor or backsource if the market changes or an outsourcing relationship sours. Three strategies are presented for lowering switching costs

The Multidimensionality of IT Outsourcing Risks

IT outsourcing is a complex endeavour with multiple sources of risks. The body of knowledge on the subject is vast but scattered. Our project aims to create an integrated risk and controls framework. This paper discusses the multidimensional nature of outsourcing risks that needs to be addressed when such framework is developed. This paper presents findings from two workshops where risks, their classifications and dimensions where discussed by a group of experienced risk practitioners. The results highlight that practitioners see strategy, stakeholders and the different phases of the outsourcing as important dimensions that create risk and needs to be addressed by organisations that are planning or already running an outsourcing venture. This research confirms that there are a number of dimensions in IT outsourcing risk and it has provided depth to the understanding of these dimensions

Fit Between IT Outsourcing Supplier Sourcing Capabilities and Organizational Structure: A Conceptual Model

Thus far, relatively few studies have focused on the IT supplier side of IS/IT outsourcing arrangements. Existing research identifies two recurring problems: (1) a lack of sustainability with regard to service performance, and (2) a poor fit between the heterogeneous context of clients and homogenous provider solutions. The objective of this theoretical paper is to relate sourcing capabilities and organizational structure of IT suppliers to sourcing performance, taking the dynamics that clients have to deal with into account. To that end, we develop a conceptual model that connects the interaction between developments in the client domain to the sourcing capabilities and organizational structure of suppliers. To be more exact, we hypothesize that realizing a fit between the necessary sourcing capabilities and organizational structure on the IT supplier side will result in a sustainable sourcing performance