A Configurational Approach to Information Technology Outsourcing

As scholarly interest in IT outsourcing has gained momentum recently, the ability to integrate this line of research into a coherent and consistent body of evidence seems to have been constrained by the difficulty of reconciling the contradictory findings that have emerged from outsourcing studies. This paper suggests that the recurring call for an integrative view of outsourcing can be addressed by breaking away from the reductionistic approach of contingency theory toward the holistic approach of configurational theory. The paper adopts a configurational approach to develop an exploratory framework of IT outsourcing effectiveness. Drawing on the relational view of the firm and taking a process view of outsourcing, the framework identifies four high-level dimensions that correspond to an organization's resource position in four key areas: organizational IT value position, organizational IT asset position, relational asset position, and relational capability position. A novel structured method is used to identify the congruent (internally consistent) outsourcing configurations within the range of possible outsourcing configurations based on the interdependencies among the four dimensions. Furthermore, a settheoretic approach and Boolean algebra are applied to formally demonstrate the logic underlying the exploratory framework. Three congruent outsourcing configurations, labeled as asset dependence, relational dependence, and independence, emerge from this analysis. Drawing on the assumptions of configurational theory about organizational change and taking a dynamic perspective, the framework is extended to describe how organizations transition between outsourcing configurations over time. The discussion concluding this paper uses the exploratory framework to demonstrate how a configurational approach can effectively address the limitations of the outsourcing literature and advance outsourcing research. While configurational theory offers a holistic and multifaceted way of modeling the intricate interactions between IT and organizational attributes, previous IT studies have drawn on it to a limited extent, primarily as a lens to describe frequently recurring patterns of attributes. Hence, an important contribution of this paper is to demonstrate the potential value of comprehensively adopting a configurational approach for IT research in general and outsourcing research in particular.