The Effect of Service Quality and Partnership on the Outsourcing of Information Systems Functions.

Author List: Grover, Varun; Cheon, Myun Joong; Teng, James T. C.;

Journal of Management Information Systems, 1996, Volume 12, Issue 4, Page 89-116.

Numerous corporations today are outsourcing specific information systems (IS) functions. The diversity of these outsourcing arrangements goes well beyond that associated with the more traditional facilities management. This paper examines outsourcing trends and reports the results of an empirical study on IS outsourcing. Overall IS outsourcing and its five component functions namely, applications development, systems operations, telecommunications, end-user support, and systems planning and management--are examined for their relationships with outsourcing success. The effect of service quality of the provider and the ability of companies to build a partnership on these relationships are hypothesized and studied. Data from senior executives in 188 companies are gathered. Outsourcing success is found to be highly related to the degree of outsourcing of two functions, systems operations and telecommunications. The results indicate that transaction cost theory provides a good framework for IS outsourcing and that asset specificity of outsourcing transactions needs to be considered in any decision to outsource. Also, both service quality of the vendor and elements of partnership such as trust, cooperation, and communication are important for outsourcing success. Implications of the study for research and practice are discussed.

Keywords: business partnership; information systems outsourcing; outsourcing success; service quality.

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List of Topics

#274	0.396	outsourcing transaction cost partnership information economics relationships outsource large-scale contracts specificity perspective decisions long-term develop requirements economic association factors hypotheses
#198	0.115	factors success information critical management implementation study factor successful systems support quality variables related results key model csf importance determinants
#211	0.101	service services delivery quality providers technology information customer business provider asp e-service role variability science propose logic companies especially customers
#150	0.099	issues management systems information key managers executives senior corporate important importance survey critical corporations multinational managing interviews study results concerns
#127	0.070	systems information research theory implications practice discussed findings field paper practitioners role general important key grounded researchers domain new identified