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Purpose -It is posited that information technology (IT) outsourcing unfolds a complex relationship that has the propensity to start with a bang and end in a whimper unless the strategic parameters are identified at the outset. The paper is intended to beacon flash areas open to scholarly research in this relatively nascent area. Design/methodology/approach -The key to long-term success is the mutually beneficial partnership of the client and the provider. This paper identifies such relationships based on a framework that can lead to strategic success of the outsourcing engagements. The paper develops a set of propositions to build a deeper understanding of the processes that underlie IT outsourcing as a strategic and sustainable enterprise-wide initiative to further an organization's performance in the competitive market place. Findings -Outsourcing of IT is emerging as a potent business strategy. The statistics compiled by the IT industry watch-dogs point only to one direction -outsourcing will grow unabated in the foreseeable future. However, their data also reveal a staggering failure rate of outsourcing engagements. The failure may be partly attributed to a lack of formal research available to decision makers contemplating the possibility of outsourcing. The literature review corroborates that there is very little scholarly research available to guide decisions in the pre-outsourcing phase. This paper suggests a research framework that would fill a void in understanding the relationships among the firm's internal capabilities, the type of engagement, and strategic business values. Understanding of these strategic relationships is vital before an organization decides to outsource, as the decision domain has shifted primarily from cost cutting to engagement of a strategic nature. The outsourcing decision of IT should be considered strategic as the relationship and the knowledge gained during the engagement can be translated into tangible and intangible business values for the organization. An interesting extension of the proposed research would be to investigate the conditions that underlie acceptance of an engagement by the vendor. The proposed research also has the potential to extend to the post-engagement phase of the outsourcing in terms of identifying the conditions for strategically focused relationship management. Originality/value -The paper provides a framework and identifies propositions to delve deeper into the understanding and underpinnings of IT outsourcing as a strategic process by studying a majority of research available on the topic.

Escalation of commitment emerged as a major explanation for the propensity of management information systems projects to exceed time and budget constraints. Earlier studies demonstrated that escalation in MIS is a common event. This study presents a meta-analysis of the various theories of escalation that allows for integration of the various escalation factors into a model of irrational escalation and a model of rational escalation. The implications of rational and irrational escalation for the decision making in management of information systems are discussed.

The rapid growth of the Internet and the number of online consumers have resulted in increased fears from privacy advocates, legislators and consumer groups regarding the guarantees of privacy when using e‐commerce and the Internet. Some companies collect marketing information on consumers’ Internet habits without their knowledge or consent. This study looks at stated policies appearing on the Web sites of a number of major e‐commerce companies regarding Internet privacy. This was accomplished by the examination of information related to current Internet policies posted on these firms’ Web sites. Also examined was whether these policies have been changed over a three‐year time period. Five policy categories were examined over this three‐year period using a consistent rating scale. These categories were privacy, returns, shipping, warranty, and security.

PurposeThe purpose of this paper is to examine how the real option theory is applicable to evaluation of cases of escalation and premature termination of Management Information Systems (MIS) projects.Design/methodology/approachThe paper compares the implications of psychological and economic escalation theories with lessons from the real option theory as applied to MIS projects. Then, it examines published case studies, and discuss when project continuation enhances and reduces value for the manager and the firm.FindingsEscalation of commitment is continuation of an investment project after receiving negative signals. Escalation was identified as a significant problem in MIS projects often explained by the desire of the manager to avoid recognizing mistakes and to protect reputation. The opposite problem of premature termination of certain investment projects was also identified. This study argues that accurate application of real option theory is critical to distinguish between escalation and premature termination. Under the real option theory, an investment project is analogous to a financial option, in that there is an opportunity to continue the project, but no obligation. Continuation has value when there is uncertainty and new information about the project may be revealed. Failure to account for the real options in a project is value‐reducing as it may lead to mistakes in premature termination of projects when projects with real option value are labeled as cases of irrational escalation.Practical implicationsThe paper details the implications of real option theory to evaluating project continuation in the MIS setting.Originality/valueThis paper applies insights from real option theory to studies of escalation in MIS. Continuing a project may be seen as escalation when it actually has value for the firm, as new information received by continuing the project reduces uncertainty.