Information Technology Insourcing: Myths and Realities

Abstract

As the external services market has evolved, academics have systematically studied a number of important aspects of these IT outsourcing decisions. These studies can be categorized as descriptive case studies and surveys of the current outsourcing practices; surveys of practitioners’ perceptions of risks and benefits of outsourcing, studies of determinants of outsourcing, and identification of best practices which distinguish success from failure (Loh and Venkatraman, 1992; Ang, 1993; Willcocks and Fitzgerald, 1994; Clark etal., 1995; Klepper, 1995; Grover etal, 1996, Gurbaxani, 1996; Nam et al., 1996). A detailed review of outsourcing research can be found in Dibbern et al. (2004), while Willcocks and Lacity (2009) provide a three volume set of research papers on these topics. In general, research indicates that selective sourcing has always been the norm, in fact, but, as Chapter 8 pointed out, that outsourcing options have become more complex. There are many perceived benefits and risks of outsourcing, but many studies are based on respondents’ perceptions rather than actual outcomes. Our earlier research on determinants of outsourcing generally showed that companies most likely to outsource on a large scale were in poor financial situations, had poor IT functions, or had IT functions with little status within their organizations (Lacity and Hirschheim, 1993, 1995). To this day there is still considerable debate on whether certain sourcing decisions and practices result in success or disappointment (Lacity and Willcocks, 2009).