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TitleExamining the outsourcing of information systems functions from diverse theoretical perspectives
Author(s)Moura, Isabel Cristina A. A.
Grover, Varun
KeywordsInformation Systems Outsourcing
Outsourcing Theory
Research Model
Issue date2001
Abstract(s)In recent years there has been a significant increase in the incidence of information systems (IS) outsourcing. Technological uncertainty, cost reduction, the need to concentration on core business, and the increasing quality and competition among a growing cadre of service providers, (e.g.) are often discussed as key outsourcing motivators. While a number of theoretical frameworks have been used to structure studies on this phenomenon, the efforts have often been piece-meal and disjointed. IS outsourcing involves multiple facets, including the initial decision, choice of governance structure and the management of the ongoing relationship. This study attempts to provide a view of outsourcing from three theoretical lenses – resource/knowledge-based, transaction costs, and agency theory, focusing on key variables espoused by these theories and their relevance to the different facets of outsourcing. It is suggested that resource/knowledge-based theory can help explain strategic initial IS outsourcing decisions and some IT determinants of sustained competitive advantage related to those decisions. Transaction costs theory can help explain cost-reduction strategies for initial IS outsourcing decisions and point out different governance mechanisms for a variety of IS outsourcing relationships (e.g., supplier-firm and contract type choices). Agency theory can help design and explain adequate and costliest ways (i.e., compensation schemes) to manage IS outsourcing and/or internalized (i.e., internal procurement) relationships. Collectively, it is hoped that this effort will serve to integrate disparate approaches to this important and growing phenomenon.
DescriptionSubmitted to "Information & Management" in 2001.
AccessOpen access
Appears in Collections:DSI - Engenharia e Gestão de Sistemas de Informação

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