Differences between success factors of IS quasi-outsourcing and conventional outsourcing collaboration: a case study of
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Differences between success factors of IS quasi-outsourcing and conventional outsourcing collaboration: a case study of two Finnish companies Karin Väyrynen & Marianne Kinnula
Received: 24 March 2011 / Accepted: 13 December 2011 / Published online: 18 January 2012 # Institute of Information Management, University of St. Gallen 2012
Abstract Conventional IS outsourcing does not always meet expectations, often because the company lacks control over the outsourced activity. Quasi-outsourcing collaboration, where the company transfers its IS personnel to a subsidiary, allows the company to maintain more control over the relationship than in conventional outsourcing. In this qualitative case study of two Finnish companies, differences between success factors of IS quasi-outsourcing and conventional outsourcing are identified and discussed. The study has practical and theoretical implications. We identified 1) success factors of conventional outsourcing that are already fulfilled (e.g. trust) or less challenging (e.g. physical information technology infrastructure) in quasi-outsourcing, 2) success factors that are more challenging in quasioutsourcing than in conventional outsourcing (e.g. structured interaction processes), and 3) success factors that proved important in both types of outsourcing but showed qualitative differences (e.g. mutual dependency). Our findings can help companies make a more informed choice between these two types of outsourcing. Keywords Information systems . Outsourcing types . Qualitative research . Quasi-outsourcing JEL classification L24
Responsible editor: Nicholas C. Romano K. Väyrynen (*) : M. Kinnula Department of Information Processing Science, University of Oulu, PL 8000, 90014 Oulu, Finland e-mail: [email protected] M. Kinnula e-mail: [email protected]
Introduction Outsourcing has often been named a very important company business strategy in the New Economy era. Information system (IS) outsourcing can be classified into two typical but different patterns: conventional outsourcing and quasi-outsourcing (Matsuno et al. 2009). In conventional outsourcing, the company enters a contract-based relationship with an external service provider without having ownership of the provider. This form of collaboration has been researched widely (Lacity et al. 2009). Quasi-outsourcing, in contrast, is defined as the situation where the company creates a subsidiary and transfers certain business functions to it, keeping total or partial ownership of the new, independently managed company (Barthélemy and Geyer 2001, 2005; Dibbern et al. 2004). Significant risks are related to outsourcing (Aubert et al. 2005; Bahli and Rivard 2005), and outsourcing outcomes are not always successful; one reason is that, in conventional outsourcing, the company loses control over the outsourced activity (Barthélemy 2003). Quasi-outsourcing allows the parent company to retain control over the outsourced activities, even though the quasi-outsourced IS department behaves like an external service p
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