While previous research has focused on choosing between insourcing or outsourcing, no systematic attempt has been made to find a viable alternative for IT capable companies, which need to realize optimum value from their IT capabilities. This study reviews the IT outsourcing and strategic management literature and identifies outsourcing alliances as a strategic alternative to the traditional ar...

Existing research on outsourcing uses several different theoretical perspectives to study outsourcing, including the resource based view, transaction costs analysis, contingency theory and agency theory. While studying a phenomenon from different viewpoints increases our understanding on the subject, we need a consistent theoretical framework to consolidate the ideas generated in the field, com...

Many large enterprises develop their software nowadays in globally distributed settings. By using the option to outsource, the respective enterprises can realize decisive competitive advantages. In order to remain competitive, small and medium-sized enterprises (SMEs) are also forced to follow this trend and to outsource parts of their software development. However, most of the existing studies...

As information systems managers come under increasing pressure to improve the cost performance of information processing, outsourcing has become an important management strategy. Although information systems outsourcing is now a major industry, it is still a new decision problem for many managers. As managers gain more and more experience with IS outsourcing, satisfaction with vendor performanc...

Williamson’s (1979) transaction cost theory (TCT) has been widely used in information technology (IT) outsourcing research. This research, however, has led to mixed and unexpected results. From a theoretical standpoint, this paper argues that the conceptualization of the constructs and, more importantly, the linkage among constructs that IT outsourcing decision models have hypothesized are not ...

Outsourcing has been considered as an important source of innovation, nowadays. The paradigm of open innovation suggests that valuable ideas may occur either inside or outside the company, as in the Information Technology (IT) outsourcing. In view of the emerging paradigm of open innovation, this paper analyzes the IT outsourcing process as an external source of open innovation. This research h...

Although the security Outsourcing companies can provide several security services to its customer organizations, but the customer organizations should avoid Outsourcing security risks which emerge from providing security services to the customers through open environments or malicious behaviors which the security providers at Outsourcing companies may carry out. For this problem we propose a ne...

We investigate the impact of Information Technology (IT) outsourcing on firm performance from several dimensions, including changes in labor productivity, improvements in financial and operational performance variables, and stock market valuation of IT outsourcing initiatives as measured by Tobin’s q. While our main objective is to better understand the economics of IT outsourcing, we also aim ...

We use an economic learning model to examine how knowledge parameters characterizing a sourcing relationship between a vendor and a client interact with production costs and coordination costs to affect the business value of alternative outsourcing strategies. This information is then used to determine a firm’s optimal rate of information technology (IT) outsourcing. We find that the optimal ou...

This paper analyzes how capital structure and product market competition affect the firms’ choice between outsourcing with long term contracts and outsourcing to the spot market. When outsourcing to the spot market firms are exposed to price uncertainty, whereas a long term contract allows them to set in advance the outsourcing price. We show that, to the extent that leverage and uncertainty ca...