IS Sourcing Framework

From Information Systems at Pitt Business

IS/IT expenditures have become the top third expense for businesses. As such, portions, or in some cases, all of IT, are being targeted for outsourcing. IS researchers have been arguing in favor of selective insourcing. To this point, there had been no framework to analyze pros and cons between outsourcing and insourcing opportunities. This framework is based on the internal markets approach.

This framework is built upon the internal markets approach and weighs the pros and cons of the decision to insource or outsource at the short-term competitive impact, mid-term tactical impact, long-term strategic impact and long-term competitive advantage. Propositions are made at each level to aid in the decision of IS sourcing.

[edit] Abstract

This paper develops a framework for the consideration of internal markets as an alternative to information systems (IS) outsourcing. It is based on an assessment of the pros and cons of both outsourcing and insourcing based on the internal markets approach. It is formulated in terms of the operational, tactical, and strategic impacts of the choice among the alternatives. The framework, and the propositions that are developed from it, should be useful both for researchers, who can use it for developing testable research hypotheses, and for practitioners, who may use it as a basis for developing a comprehensive set of criteria for the evaluation of these sourcing options.