Determinants of Information Technology Outsourcing: A Cross-Sectional Analysis

By Lawrence Loh, N. Venkatraman. Journal of Management Information Systems, 2011

746 citations recorded by the source corpus.

Abstract:This paper develops and tests a model of the determinants of information technology (IT) outsourcing by integrating both business and IT perspectives. Specifically, we attempt to explain the degree of IT outsourcing using business and IT competences as represented by their cost structures and economic performances. In addition, we posit that outsourcing is dependent on business governance, particularly financial leverage. Based on factor analyses and multiple regressions using data from fIfty-five major U.S. corporations, we observed that the degree of IT outsourcing is positively related to both business and IT cost structures. We also established that the degree ofIT outsourcing is negatively related to IT performance. Finally, we conclude with implications and future research directions.

Subfields: Management Information Systems, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/3971fd08684d8a11031b54019dc39baf4442cd03

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Citations in the corpus

A review of the IT outsourcing literature: Insights for practice (2009, background): “For example, Loh and Venkatraman (1992a) is one of the ﬁrst major articles on the determinants of IT out-sourcing – it has been cited 341 times.”
From the Vendor's Perspective: Exploring the Value Proposition in Information Technology Outsourcing (2003, background): “…the leading reason behind outsourcing is the need to reduce and control IT operating costs (Ang and Cummings 1997; Ang and Straub 1998; Casale 2001; Loh and Venkatraman 1992a, 1992b; Slaughter and Ang 1996), followed by the need to improve management focus and access technical talent not available…”
The impact of knowledge sharing, organizational capability and partnership quality on IS outsourcing success (2001, background): “IS outsourcing, which is de®ned as the process of turning over part or all of an organization's IS functions to external service provider(s), is done to acquire economic, technological, and strategic advantages [33].”
Manufacturing performance: evaluation and determinants (2005, background): “Outsourcing, however, can no longer be considered as a single dichotomous decision as many of today's outsourcing contracts involve complex arrangements and varying degrees of coverage for a firm's business activities ( Loh and Venkatraman, 1992”
A transaction cost model of IT outsourcing (2004, background): “Finally, a number of researchers focus on the determinants of outsourcing, that is, on those variables that will influence the outsourcing decision [20,28].”
IT Outsourcing Strategies: Universalistic, Contingency, and Configurational Explanations of Success (2004, background): “…1995, p. 249); the “act of subcontracting a part, or all, of an organization’s IS work to external vendor(s), to manage on its behalf” (Altinkemer et al. 1994, p. 252); and “managing a firm’s IT infrastructure through governance mechanisms with other firms” (Loh and Venkatraman 1992, p. 8).”
Information systems outsourcing: a survey and analysis of the literature (2004, methodology): “One example of research in this category is an early paper by Loh and Venkatraman (1992b).”
The Diffusion and Assimilation of Information Technology Innovations (2001, background): “- 16 TABLE 7: CHARACTERISTICS OF THE ADOPTION ENVIRONMENT Factors Related Work Adoption Environment: Concentration/Competitiveness (+), Competitive Pressure (+), Profitability/Wealth (+), R&D Intensity (+), IT Intensity (+), Rate of Technical Change (+) (Eveland and Tornatzky, 1990; Gatignon and Rob”