How Organizational Learning Capability And Organizational Integration Capability Influence IT Outsourcing Performance

With the rapid development of global IT outsourcing industry, the outsourcing vendors in China are facing great business opportunities. While the development of information technology and the increasing requirements of outsourcing clients bring great challenge at the same time for vendors. Facing this challenge, how to maintain and improve the IT outsourcing performance has become a major issue both in the industry and academia. Lots of scholars have investigated the factors which will have influence on IT outsourcing performance. However, most of the existing studies focus on the client’s perspective, the perspective of vendor is very limited. While there is a close link between the vendor’s performance and the whole success of outsourcing projects considering the fact that the IT outsourcing services are provided by vendors. Therefore, the research focuses on the vendor’s point to explore the influential factors on IT outsourcing performance should not be ignored.On basis of the analysis of existing research and industrial practice, we note that organizational learning capability and organizational integration capability are key factors affecting firm’s competitive advantages and performance in dynamic business environment. While there is still no consensus about whether organizational learning capability has direct or indirect influence on IT outsourcing performance. On the other hand, organizational integration capability is usually studied from internal and external aspects, the mechanism about how these two different integration capabilities influence the outsourcing performance is also unclear. Thus it is necessary to pay attention on these research gaps. On basis of the related research and the vendor’s perspective, this paper establishes a theoretical model to examine the relationships among organizational learning capability, organizational integration capability and IT outsourcing performance.Based on the established theoretical model, we empirically test the model using the questionnaires method. Firstly, we conduct the data collection process from the IT outsourcing vendors located in Dalian Software Park and ultimately obtain 237 valid questionnaires. Then, the panel of data is analyzed with the SPSS and Smart PLS tools to verify the hypotheses. The results indicate that:(1) organizational learning capability has significant direct effect on vendor’s IT outsourcing performance, also it could improve external integration capability to indirectly affect vendor’s IT outsourcing performance; (2) organizational learning capacity has significant effect on both internal and external integration capacity, and internal integration capacity partially mediate the influence of organizational learning capacity on external integration capacity; (3) internal integration capacity has no significant effect on vendor’s IT outsourcing performance, while it could improve external integration capacity to indirectly affect vendor’s IT outsourcing performance. Finally, we provide some managerial recommendations in terms of using the organizational learning capability and organizational integration capability to improve vendor’s IT outsourcing performance according to the empirical research results.