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Information systems (IS) outsourcing is a key driver as well as an outcome of the professio- lization, industrialization, and service orientation in the IT services industry. It has become an established business practice and a popular research issue. Along with this popularity, o- sourcing has changed tremendously over the past decades and so have its scope, complexity, and the variety of outsourcing options. Surprisingly, still many outsourcing arrangements are not successful. Divergent expectations of both parties towards the venture along with an - sufficient governance can cause the outsourcing relationship to turn sour. Current research shows that a one-size-fits-all governance approach for outsourcing projects is not appropriate and a differentiation of outsourcing clients is necessary. Encouraged by the current challenges of the outsourcing market, this work presents a dif- rentiated approach to investigate various types of IS outsourcing relationships and their c- racteristics depending on the underlying expectations of the outsourcing clients. Grounded on the current body of knowledge of the outsourcing research literature and a variety of current theories in the fields of information systems, business administration, and social theories, it develops a framework for classifying outsourcing projects and clients. This framework builds the foundation to empirically examine different outsourcing projects, their constitutive e- ments, and management approaches among German IT executives and CIOs. Based on these insights, the work proposes appropriate governance mechanisms for the management of each outsourcing client type.



1. Introduction

Outsourcing of information systems (IS) has seen unprecedented growth in the past few years and continues to be an important issue on the agenda of corporate IT executives (Luftman/ Kempaiah/Nash 2006; Pütter 2007). A recent market study by the German Association for Information Technology, Telecommunications and New Media (BITKOM) found that outsourcing is one of the top three IT issues of the year 2009 (BITKOM 2009a). With a 2007 worldwide market growth rate of 10.2%, both IT outsourcing (ITO) and business process outsourcing still hold a huge potential in the global IT market and are forecast to reach US $563.3 billion1 by 2011 (Potter 2007). According to the European Information Technology Observatory (EITO), the growth rate of outsourcing in Germany is estimated to be 7.2% for 2009 with a market volume of 14.6 billion Euro (BITKOM 2009b).
Stefanie Leimeister

2. Epistemological Foundation and Research Methodology

This chapter lays out the epistemological basis for the research in this thesis as to research methodology chosen for this work and philosophical perspectives underlying this approach.
Stefanie Leimeister

3. Theoretical Background on Outsourcing

The generic notion of outsourcing refers to a decision of an organization whether to make or buycertain products, services or parts thereof (Loh/Venkatraman 1992a, 9, 1992b, 336). The business practice of making arrangements with an external entity for the provision of goods or services to supplement or replace internal efforts has been around for centuries (Dibbern et al. 2004). In the course of establishing a trend towards “lean production” (Womack/Jones/Roos 1991), organizations more and more focused on their core competencies in order to leverage the organization's unique potential and comparative advantages over their competitors (Wintergerst/Welker 2007). Consequently, companies assigned commodity or non-specific assets (i.e., processes, products, or services) to external entities. By reducing the level of inhouse production and the degree of the company's vertical integration, companies also shifted those components away from a “hierarchical” mode toward a “market” mode of governance (Loh/Venkatraman 1992a, 8; Malone/Yates/Benjamin 1987; Wintergerst/Welker 2007, 938pp.).
Stefanie Leimeister

4. Theoretical and Methodological Foundations for Classifying Data

After having introduced a conceptual framework of IS outsourcing characteristics to identify and classify different types or configurations of outsourcing relationships, a clear understanding of the variety of terms around “classification”, “types”, and “configuration” is still missing. Also some methodological knowledge and foundations on the empirical assessment of different configurations of outsourcing relationships have to be laid.
Stefanie Leimeister

5. Empirical Evidence of Outsourcing Relationship Types

Quantitative research in the social and behavioral sciences follows an established research process (Atteslander 2008). In general, one can distinguish three phases of research:
The context of discovering the object of inquiry,where the context of the research and the motivation and causes for conducting the research are laid out
The context of exploration and justification,where the methods of the study are discussed and the actual data is assessed and analyzed, and
The context of interpretation and dissemination,where the conclusions and contributions of the study are discussed and learnings for theory and practice are elaborated
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6. Governance of IS Outsourcing Relationship Types

Based on empirical evidence, the previous chapter identified four different outsourcing client types in practice. It laid out the main characteristics of these types in a descriptive way, for example, what is the main motivation of each type to engage in an outsourcing venture, how important is, e.g., the contract etc. However, while single governance mechanisms have been addressed and roughly described in the previous chapter, so far it remains still unclear how each client type is best, i.e., successfully, managed. Governance mechanisms have not yet been set in relation to any outcome measure (e.g., perceived service quality or satisfaction). This chapter is thus dedicated to introducing a model that investigates the impact of different governance mechanisms (introduced and described conceptually in chapter 3.6.3, p. 51ff.) on outsourcing outcome, thereby addressing research question 3: “What are appropriate governance approaches and mechanisms for the successful management of different outsourcing relationships?”
Stefanie Leimeister

7. Conclusion and Outlook on Future Research

This thesis was motivated by the need to improve the understanding why outsourcing outcomes and performance are so ambiguous among various client firms and why so many outsourcing projects fail while others are extraordinarily successful. The underlying assumption of this work to be examined was that different expectations and motivations towards an outsourcing venture form different outsourcing client types. These types need a specific portfolio and appropriate approaches of governance modes in order to achieve outsourcing success.
Stefanie Leimeister


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