Information Systems Outsourcing: A Study of Pre-Event Firm Characteristics

Software-as-a-Service Model: Elaborating Client-Side Adoption Factors

“…Firms with high cost of capital can economize on their fixed capital costs by creating a cash infusion through sale and lease-back of their IT assets through outsourcing contracts (Loh and Venkatrama 1992a;Smith et al 1998 (Barney 1999;Van de Ven 2005), and an activity should be outsourced if it is not a core competence of a firm (Quinn 1999;Prahalad et al 1990).…”

The Impact of Business Process Outsourcing on Firm Performance and the Influence of Governance: A Long Term Study in the German Banking Industry

“…As many studies found different pre-event characteristics of outsourcing firms (e.g. Ang et al, 1998;Hall et al, 2005;Smith et al, 1998), we do not look at the absolute values of the performance metrics three years after the event but rather at the change of these metrics over a three year period after the BPO to ensure that the observed effect stems from BPO. To test for the significance of the difference between the two groups we use a parametric t-test and the non-parametric Wilcoxon signed rank test.…”

“…Most of the studies are focused on IT outsourcing in the manufacturing industry. Finding that low overhead costs, low cash reserves, high dept, and declining growth rates determine outsourcing decisions, Smith, Mitra, and Narasimhan (1998) conclude that the main motives for outsourcing are cost reduction and cash generation. Hall and Liedtka (2005) present a similar result, showing that IT outsourcing is determined by poor performance, poor cost control, and short term cash needs.…”

“…Relying on publicly available audited data has the advantage of providing a more objective evaluation of a firm's performance and characteristics than the perception-based intermediate metrics typically used in case studies (Smith et al, 1998). Further, respondents answers in surveys may be self-justifying (Ang et al, 1998).…”

“…Further, respondents answers in surveys may be self-justifying (Ang et al, 1998). Previous studies analyzing either firm level determinants or financial impact of outsourcing employ several measures for profitability (D'Aveni et al, 1994;Görg et al, 2004;Görzig et al, 2002;Hall et al, 2005;Jiang et al, 2006;Smith et al, 1998), cost efficiency (D'Aveni et al, 1994Hall et al, 2005;Jiang et al, 2006;Smith et al, 1998), and factor or labour productivity (Girma et al, 2004;Görzig et al, 2002;Jiang et al, 2006). Some authors also use different financial measures like financial slack, free cash flow or growth rates to explain the firm level consequences of outsourcing.…”