Evaluating Motivational Factors Involved at Different Stages in an IS Outsourcing Decision Process

Abstract

This study evaluates factors involved at different stages in an IS outsourcing decision process. From a theoretical perspective, the motivation for IS outsourcing is often described as a result of three factors: cost reduction, access to technological expertise and focus on core competence. The aim of this paper is to evaluate motivational factors in an outsourcing decision process. The study uses a literature review and a retrospective case study of an outsourcing project in a large Swedish organisation. The idea is to evaluate if there are different factors involved at different stages in an IS outsourcing decision process. It has been found that the cost perspective is often used as a way of motivating the start of the process as well as the result of the process. However, during different stages other factors are involved. The results, based upon the case study, show that the size and reputation of the provider as well as thoughts about the provider's ability to deliver required capability is more important than cost reduction. It can be argued that the impact of IS outsourcing on performance and value of an organisation's IS function can be both positive and negative. To minimise the odds of a negative result, this paper contributes with an evaluation of motivational factors involved at different stages in an IS outsourcing decision process. If they are duly addressed, the chances of a successful IS outsourcing process will improve significantly.