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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/14235
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| Title: | Outsourcing of Information Systems as a Strategy for Organizational
Alignment and Transformation |
| Authors: | Kambil, Ajit
Turner, Jon |
| Issue Date: | Mar-1994 |
| Publisher: | Stern School of Business, New York University |
| Series/Report no.: | IS-94-04 |
| Abstract: | Outsourcing of services is usually viewed as a way to increase or
decrease capacity at the margin. By outsourcing a firm can vary its
ability to provide goods or services such as information technology (IT)
processing capacity or applications development, without taking on the
long term commitment of permanent staff or equipment Today, outsourcing
provides new options for managers to provide information technology
infrastructures and services to a firm. In this paper we identify ways
in which outsourcing may be used tactically to better align business and
information technology strategies. Specifically, we consider how
selective outsourcing enables alignment of incentives, business revenues
and IT infrastructure costs, and how organizational intent can be made
more consistent with a firm' s capabilities. We propose that outsourcing
as an information systems management strategy can enable better control
and lower agency costs as managers benefit from better information
through external benchmarking. We also consider the role of outsourcing
as a vehicle to support major organizational transformation, and as a
device for enabling new models of organization. Based on our analysis we
propose a series of testable propositions about outsourcing. The
contributions of this paper include extension of business strategy and
information technology alignment concepts to incorporate the
interdependence between projects, product life cycles, and technology
transfer. Most importantly, the paper highlights new directions for
outsourcing research, focusing on the effects of outsourcing on the IT
organization, the processes of internal technology development and the
transfer of technologies between organizations. |
| URI: | http://hdl.handle.net/2451/14235 |
| Appears in Collections: | IOMS: Information Systems Working Papers
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