IT Outsourcing Strategies: Universalistic, Contingency, and Configurational Explanations of Success

Abstract

Focus on individual outsourcing decisions in IT research has often yielded contradictory findings and recommendations. To address these contradictions, we investigate a holistic, configurational approach with the prevailing universalistic or contingency perspectives in exploring the effects of IT outsourcing strategies on outsourcing success. Based on residual rights theory, we begin by identifying three dimensions of IT outsourcing strategies: degree of integration, allocation of control, and performance period. We then develop a model of fit-as-gestalt, drawing from literatures on strategy, governance, interorganizational relationships, and outsourcing. Next, based on data from 311 firms in South Korea, we test universalistic and contingency perspectives in explaining the relationship between IT outsourcing strategies and outsourcing success. We then identify three congruent patterns, or gestalts, of IT outsourcing strategies. We term these strategies independent, arm's-length, and embedded strategies. To establish the predictive validity of these gestalts and the viability of a configurational perspective, we then explore the effects of these congruent gestalts vis-à-vis noncongruent patterns on three dimensions of outsourcing success: strategic competence, cost efficiency, and technology catalysis. We also contrast the effects of each of the three gestalts on each of the three dimensions of outsourcing success. Our findings indicate the superiority of the configurational approach over universalistic and contingency perspectives in explaining outsourcing success.

Information systems outsourcing: A literature analysis

“…Finally, it dealt with articles discussing the factors required for the outsourcing relationship to be successful [114].…”

Competências Organizacionais no Contexto dos Relacionamentos Interorganizacionais

“…Principais resultados: organizações tendem a aprender mais juntas quando escolhem estratégias de aprendizagem colaborativas de alta transparência e receptividade, tendo como um dos focos de aprendizagem o desenvolvimento de competências. Lee, Miranda, Kim (2004) Empírico quantitativo (survey). 331 firmas na Coréia do Sul Enfoque: estratégia de terceirização e tecnologia da informação.…”

“…Lee, Miranda, Kim (2004) Incluir mais métricas e perspectivas para avaliar os resultados das terceirizações em empresas de tecnologia da informação como, por exemplo, a influência da inovação e entrada em novos mercados e a aplicação do método em outros países, além da Coréia do Sul.…”

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

“…These forms differ with respect to governance structures: research on inter-organizational relationships, and, more recently, on IT outsourcing, has recognized the existence of arm's length vs. embedded governance structures in interorganizational relationships (e.g. Jarillo, 1988;Kaufmann, Kraay, and Mastruzzi, 2005;Lee, Miranda, and Kim, 2004). Arm's length relationships are those that are exclusively economic and rely solely on formal means of governance, i.e.…”

“…[Insert Table 2 Lee et al, 2004;Poppo and Zenger, 2002;Sabherwal, 1999). Competence-based trust substitutes the necessity of previous business relations that would allow client and vendor to get a better understanding of what type of agreement is being entered into (scope) and what the specific expectations of both parties about that agreement are (Sargent, 2006).…”