Success of Outsourcing and Strategic Alignment as Predictors of IS Effectiveness

  • Markku Sääksjärvi

Summary

According to evolving IS literature there are several different theoretic approaches to outsourcing of IS services. However, these have not yet been very successful in explaining the relation between successful outsourcing and organizational IS effectiveness. We argue that IS outsourcing as a complex phenomenon could be understood well only as part of an overall IT management framework. For this purpose we propose and apply the Strategic Alignment model, presenting an integrative view of the interplay between business and IT in organizations. We review this theory and generate hypotheses of the relations between success of IS outsourcing and integration, the critical factor measuring alignment. Our empirical tests with data from ca. 70 business executives showed that success of IS outsourcing is an important predictor of IS effectiveness at the business division level. However, strategic integration and success of IS outsourcing seemed to be in a competitive (mediated) relation with each other. On the basis of the analyses presented, IS outsourcing in large companies is an important predictor of operative IS effectiveness at the business level, not yet coherently integrated into the institutional mechanism of strategic IT management. Implication of the study for research and practice are discussed.

Keywords

Petroleum Marketing 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2002

Authors and Affiliations

  • Markku Sääksjärvi
    • 1
  1. 1.Department of ManagementHelsinki School of Economics and Business AdministrationFinland

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