Making Decisions in IS/IT Outsourcing: A Dynamic Perspective

Beginning in 1990, outsourcing became a key approach to manage IS/IT. The Gartner Group has estimated that the market for outsourced IS/IT services reached $280 billion in 2005, and would expand to $410 billion by 2007. However, there are considerable intractable and unforeseen risks in outsourced IS/IT projects (Taylor, 2006), and making decisions therein is complex and unpredictable. Much of the research on IS/IT outsourcing decision-making are based on economic theories (i.e., transaction costs, resource dependency, and agency theories) or critical success factors to solve outsourcing motivation, scope, performance, or insourcing/outsourcing “problems” (Lacity & Willocks 1995; Watjatrakul, 2005). These studies have derived largely from economists’ view of “rational” decision-making. They assume the ABSTRACT