Are we already in a mature ITO market? A longitudinal study on the effects of market maturity on ITO vendor project performance

Studies on information technology outsourcing (ITO) have shown different results for the influence of prior interaction and contract type on the project performance of the ITO vendor. The ITO market maturity could provide an explanation for these differences. However, it is not clear how to separate the ITO market into different maturity phases to gain insight into any possible effect maturity might have on project performance. We used a large dataset from an ITO vendor to analyze this research gap. We find that the ITO market has increased its maturity and can be separated into an immature phase, occurring between 1997 and 2001, a transition phase, occurring between 2002 and 2008 and a third phase which occurred after 2008. This identification of different phases of ITO market maturity will contribute to a deeper understanding of the influence of ITO market maturity on the project performance of ITO vendors

A Dynamic View of the Relationship between Software Development Outsourcing Propensity and Industry Environment

Despite the progress scholars have made on the relationship between IT outsourcing (ITO) and industry environment, our knowledge of this link is still ambiguous and limited. Drawing on recent research on the evolvement of ITO market, we extend our understanding by taking a dynamic view of this issue. Specifically, we focus on software development outsourcing (SDO) and three key elements of industry environment, namely resource munificence, industry concentration and technology change. We argue that the evolvement of ITO market has a moderating effect onthe relationship between SDO propensity and industry environment. Using industry-level data for U.S. private industries from 1998 to 2015, we find that industry environment’s impact on SDO propensity does change with the evolvement of the ITO market. Our findings provide insights on the relationship between SDO propensity and industry environment andindicate the importance of a dynamic view for understanding ITO-related phenomena

APPLICATION OUTSOURCING IN THE BANKING INDUSTRY – ITO MODEL

Information Technology Outsourcing (ITO) in terms of the replacement of the in-house production of IT activities by the use of third party suppliers had already started in the 1960s and has increased considerably. For 2013, the Gartner Group expected that the global ITO market would reach a volume of 288 bn US dollars. Until 2017, the market should grow on average about 5.4% yearly. Despite the rich set of experiences companies have already had with ITO, the chances of success are seen as at best 50:50. Currently, the dramatic growth of ITO is accompanied by backsourcing of formerly outsourced IT functions or reports about dissatisfaction and problems with ITO. Scientists put ITO failures or problems down to a lack of modelling of all the possible factors affecting ITO success and demand a specific ITO theory as a basis for better explaining and predicting successes and failures in an IT sourcing context. This thesis takes up this research gap. The aim of this thesis is to develop a novel ITO Model which aids organisations in planning and implementing ITO solutions by guiding them through the ITO process steps of preparation, selection, contract, transition, execution, and post-deal comprising a comprehensive picture of the weighted aspects relevant to ITO success and their interdependencies. In order to achieve this aim, the following objectives were established for this thesis: raising the topical level of scientific knowledge of the last decades about successinfluencing factors in the ITO field based on an extensive literature survey of 48 scientific articles deriving ITO success factors from empirical research work; structuring of this success factor knowledge by the development of two ITO taxonomies (taxonomy of success factors and taxonomy of success factor interdependencies); testing its practical applicability on the basis of 8 real long-running application outsourcing cases in the banking industry; further development of the success factor knowledge by identification of weightings and the temporal relevance of relevant success factors / success factor interdependencies within the ITO process. Design of the novel ITO Model based on the empirical knowledge gained by development of rules for relevant success factors and success factor interdependencies, by arrangement of these rules in temporal order within the ITO process and by assignment of these rules to four levels of environment

A Systematic Literature Review on IT Outsourcing Decision and Future Research Directions

During the recent decades, some academic research on the subject of information technology outsourcing (ITO) decision has appeared in different outlets, which may impede the use of such resources and as a result, repetition of research by various researchers is very likely. The purpose of this paper is then to conduct a systematic literature review (SLR) pertaining to research on ITO decision. Then, this review intends to 1) classify ITO decision literature, 2) provide a list of factors affecting ITO decision, and 3) identify ITO strategies. To this end, 91 ITO articles published between 2000 and 2018 in 51 unique journals were reviewed. The results yielded three kinds of descriptive, relational, and comparative ITO decision studies. The determinants of ITO decisions are classified into technological, organizational, environmental and user adoption factors. Furthermore, the trend of studied ITO strategies in the reviewed literature is analyzed, and future sourcing varietals are proposed. Finally, some insights and future research directions are proposed based on the review results.During the recent decades, some academic research on the subject of information technology outsourcing (ITO) decision has appeared in different outlets, which may impede the use of such resources and as a result, repetition of research by various researchers is very likely. The purpose of this paper is then to conduct a systematic literature review (SLR) pertaining to research on ITO decision. Then, this review intends to 1) classify ITO decision literature, 2) provide a list of factors affecting ITO decision, and 3) identify ITO strategies. To this end, 91 ITO articles published between 2000 and 2018 in 51 unique journals were reviewed. The results yielded three kinds of descriptive, relational, and comparative ITO decision studies. The determinants of ITO decisions are classified into technological, organizational, environmental and user adoption factors. Furthermore, the trend of studied ITO strategies in the reviewed literature is analyzed, and future sourcing varietals are proposed. Finally, some insights and future research directions are proposed based on the review results

Critical Success Factors in the Offshore Business Process Outsourcing of Debt Collection to India

This research identifies critical success factors for the offshore business process outsourcing of debt collection to India. It develops a critical success factor model for offshore debt collection incorporating the new concept of Opaque Indifference. Opaque Indifference is a series of constructed states eliminating negative cues for debtors dealing with offshore debt collectors. The research contributes to the existing literature by applying information systems outsourcing theory to the offshore business process outsourcing of debt collection

Information Technology Sourcing Research: Critique, Lessons and Prospects

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An Analysis of IT Sourcing Practices: Identification and Exploration of Cultural Distance as a Key Factor in IT Outsourcing Engagements

Information technology outsourcing (ITO) can be defined as “the commissioning of a third party (or a number of third parties) to manage a client organization’s IT assets, people, and/or activities […] to required results” (Fitzgerald and Willcocks, 1994). It has been a pivotal topic on Chief Information Officers’ (CIO) agendas ever since Eastman Kodak’s decision to hand over their information systems function to IBM, DEC, Anderson Consulting, and Businessland in 1989. Never before had such a wellknown company that considered IT as a strategic asset handed over responsibility for it to an external partner (Applegate, 1992). The deal showed that ITO can constitute an alternative to managing complex Information Technology (IT) systems in-house (Kern and Willcocks, 2000) and subsequently led executives across different industries to follow suit and sign large contracts worth multiple hundred million dollars. The “Kodak effect” served as a starting point to what would become an important strategic matter for IT managers to consider (Caldwell, 1994). 30 years later, ITO has developed into a common practice for organizations of all sizes, industries, and geographies (Qi and Chau, 2013). Over the course of three decades, practitioners have come to appreciate ITO especially for its advantages in terms of cost, flexibility, and the possibility to capitalize on external capabilities (Martins et al., 2015; Schneider and Sunyaev, 2016). Today, virtually every Fortune 500 company2 and many large public institutions outsource a significant portion of their IT services (Patil and Wongsurawat, 2015). As a consequence, an entire global industry has evolved around ITO, with annual growth rates of around 10% and an estimated market size of around 320 billion US dollars in 2015 (Faisal and Raza, 2016). The increasing relevance of ITO in practice has also attracted considerable research that has explored various aspects of outsourcing, including common motivations, outcomes, success factors, benefits, and risks (Dibbern et al., 2004; Gonzalez et al., 2006; Lacity et al., 2009; Lacity et al., 2010; Lacity et al., 2016; Liang et al., 2015). Notwithstanding its three decades of existence, however, ITO remains a dynamic phenomenon that is subject to the ongoing rapid developments in the economic and societal environment in which it is embedded. Major developments in the field of IT, particularly the ever-progressing digitalization and the rise of IT-centered and -enabled business models (Bughin et al., 2019; Harvey Nash/KPMG, 2018; Legner et al., 2017), require adequate consideration in IT sourcing decision-making

Transformation Potential of Cloud Computing - Understanding Strategic Value Creation from Customer and Vendor Perspectives.

While Cloud Computing is evolving as a major information technology phenomenon by redefining how IT capabilities are generated and consumed, the business value of this emerging model of IT capabilities delivery is anecdotal. Limited empirical research exists to my knowledge on what and how business value is created from these technologies. My dissertation devises three empirical studies to systematically investigate the business value of cloud computing technologies from the customer and vendor perspectives. In particular, I examine the transformation potential of these technologies in delivering strategic benefits that transcend beyond mere cost advantages often cited in practitioner literature. From the customer perspective, I investigate the strategic benefits these technologies create towards organizational and individual role effectiveness. In one study, I examine at the organizational level if adopting these technologies can be associated with the IT-enabled business innovation of the firms. At the individual role level investigated in another study, I examine the association between cloud computing adoption and the involvement of Chief Information Officers in strategic opportunities related to innovation and new product development. From the vendor perspective, I examine in my third study, the implications of cloud computing architectures for the vendor organizations. I attempt to understand what changes in the technical and organizational functions are needed in the vendor organizations to reorient themselves to create the expected business value and succeed in the cloud computing market. Through these three empirical studies, my dissertation is a systematic attempt to shed light on the strategic business benefits of cloud computing and the enablers of value creation in the cloud-based technology model.PhDBusiness AdministrationUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/110393/1/sureshms_1.pd

The Effects of Capabilities and Governance on Information Technology and Business Process Outsourcing Performance: Client and Provider Perspectives

Research on information technology outsourcing (ITO) and business process outsourcing (BPO) has consistently found that client firm capabilities, provider firm capabilities, and governance mechanisms (contractual and relational) are key determinants of outsourcing performance. These key determinants work together to affect outsourcing performance, however, the information systems (IS) literature has investigated them in a separate manner. This study contributes to the body of IS knowledge by examining capabilities and governance mechanisms influence on outsourcing performance independently and jointly. Based on resource-based theory, transaction cost economics, and relational exchange theories, we develop a research model to examine the independent and joint effects of one client\u27s capabilities (i.e., client\u27s provider management capability), three provider\u27s capabilities (i.e., human resources management, risk management, and innovativeness), and two governance mechanisms (contractual and relational governance) on two indicators of outsourcing performance (i.e., provider\u27s service quality, and client\u27s economic benefits). Survey data gathered from 306 practitioners in 21 client firms and 20 provider firms is used to test the research model. Our results indicate that service quality and client’s economic benefits have different sets of determinants. Service quality is determined by three provider\u27s capabilities and relational governance. Client’s economic benefits are determined by contractual and relational governance, client\u27s provider management capability, and provider’s service quality. Our findings also provides evidence that service quality fully mediates the relationships among three provider\u27s capabilities and outsourcing performance. Further, our analyses suggest that there are negative interaction effects between capabilities and governance mechanisms on outsourcing performance. More specifically, in the presence of strong governance mechanisms, the positive effects of client\u27s and provider\u27s capabilities on outsourcing performance are reduced. Last, we also reveal that clients and providers differ in how they view the independent and joint effects of capabilities and governance mechanisms on outsourcing performance. This study provides some important implications for researchers and practitioners pertaining to effective governance of outsourcing arrangements and offers directions for future research