2. The Study of Information Technology Outsourcing

As the practice of information technology (IT) outsourcing has been evolving, the research issues concerned with it, and the theories used to explain it, have shifted accordingly (Dibbern et al. 2004; Lacity et al. 2009; Willcocks et al. 2018). In the early stages, research on IT outsourcing was centred on the ‘make-or-buy’ decision. Researchers from economic perspectives supported that outsourcing is a reasonable option when contracting out the IT function is cheaper than developing it in-house (e.g. Williamson 1975; McFarlan and Nolan 1995; Ang and Straub 1998). On the other hand, scholars adopting a strategic perspective argued that “core activities should stay in-house, whilst non-core activities can be outsourced” (e.g. Jauch and Wilson 1979; Prahalad and Hamel 1990; Hamel 1991; Quinn and Hilmer 1994; Lacity and Willcocks 1995; Cox 1996). In this chapter we explore how the study of information technology outsourcing (ITO) and business process outsourcing (BPO) developed from these beginnings, and the themes and problems dealt with in the literature, with a particular focus on contracts, relationships, and governance—the main concerns of this book.