A Strategic Management Framework for IT Outsourcing: A Review of the Literature and the Development of a Success Factors Model

Since the landmark decision in 1989 by Kodak to outsource its Information Technology (IT) services, large scale IT outsourcing has become an accepted and viable alternative for IT managers. The objective of early outsourcing efforts was lower cost; however today the motivation is often more strategic in nature with the goal of improving the business’ competitive advantage. Researchers have suggested several best practices to help ensure IT outsourcing objectives are achieved and deliverables completed long after the contracts have been signed; however there is no documented IT outsourcing framework. The motivation for this paper is to develop a framework for managing IT outsourcing engagements. To fill this gap in the research this paper presents an integrated Information Technology (IT) outsourcing framework that considers the following factors: IT alignment, contracts, infrastructure and technology, culture, strategic partnership, management support, governance and economics. This framework is a tool for IT managers to better collaborate internally and externally in an effort to achieve IT competencies and competitive advantage through IT outsourcing. The contributions of this paper are a multi-factors framework for building a successful outsourcing plan, a discussion of business skills necessary to manage such an endeavor, and model for researchers to further investigate.