Three Essays on Information Technology Sourcing: Decision, Strategy, and Outcome

This three essay thesis pertains to IT sourcing, defined as all the processes (e.g., decision making process, contracting process, monitoring process) included in the delegation of IS functions to an internal service provider and/or an external vendor. The thesis adopts two conceptual perspectives: transaction cost theory (TCT) and the dynamic capabilities perspective (DCP). In the first essay, the assessment of how extant IT outsourcing models appropriated TCT shows that the extant models do not apply TCT totally in line with the original conceptualization of the theory, especially regarding its normative nature. The study therefore suggests that TCT could remain relevant to the study of ITO decisions and outcomes and therefore it could contribute to develop an endogenous theory of IT outsourcing. The second and third essays adopt DCP to examine the strategic role of IT outsourcing dynamic capabilities. Informed by qualitative data from a single extreme case of IT outsourcing, essay two proposes that a set of strategic IT capabilities supports IT and business alignment. The findings suggest that IT outsourcing dynamic capabilities (e.g., search and selection of vendors) combines with IT architecture dynamic capabilities (e.g., search and selection of IT solutions) to create new states of alignments between IT and business. Essay three focuses on IT outsourcing dynamic capabilities, operational capabilities, and learning capabilities and proposes and tests a model of their impact on IT outsourcing success. A cross-sectional survey of 152 organizations across different industries was conducted. The survey data are analyzed with a structural equation modeling (SEM) approach. The findings suggest that dynamic capabilities positively influence IT outsourcing successful reconfiguration (strategic success of IT outsourcing). Also, the findings suggest that operational capabilities positively influence successful delivery (operational success). Moreover, both operational success and strategic success positively influence IT outsourcing success.