Anne C. Rouse

Is There an "Information Technology Outsourcing Paradox"?

This paper examines an apparent paradox: given the increasing adoption of outsourced IT service delivery, why has the academic literature been unable to confirm widespread satisfaction with the strategy? Instead it has come to be seen as almost axiomatic that outsourcing IT must be perceived as beneficial by purchaser firms – after all, why would organizations engage in this practice if it did not produce corporate benefits? Yet there is a growing body of evidence collected by both consultants and researchers that significant numbers of outsourcing arrangements are quite unsatisfactory (e.g., Aubert, Patry, & Rivard 1999; Bernard 2005; Gartner 2002; Ozanne 2000; Rouse & Corbitt 2003b). Trade and academic claims of a range of benefits have fuelled the worldwide adoption of IT outsourcing. Certainly, outsourcing has the potential for a number of benefits in addition to, and sometimes instead of, cost savings . These include enhanced business flexibility: access to skills; or to new or better technologies; increased capacity to concentrate on core business; enhanced managerial control; and financial restructuring benefits (such as converting capital to operating expenses (Lacity & Willcocks 2001). But in this chapter the evidence on which such claims are based is unpacked, and it will be shown that while in some cases substantial benefits accrue from IT outsourcing, the strategy can also lead to a number of negative outcomes. The most common of these is a failure to deliver the benefits that were the primary reason for engaging in the activity in the first place. Because of the significant disruption and expense caused when outsourcing is entered into, this fundamental failure means that funds and management attention are diverted from other more fruitful business strategies, often for considerable periods. The continued growth of a strategy whose theoretical benefits have largely not been confirmed is puzzling, and has been labelled in this chapter the “IT outsourcing paradox.” This paradox is based on an apparent “disconnect” between the growing level of outsourcing activity in the community and the empirical evidence about how decision makers engaged in outsourcing actually evaluated outsourcing’s

Negotiation in information systems action research

The paper discusses the gradual negotiation process involved in the resolution of the initiative dilemma of IS action research. This dilemma occurs when the researcher faces the decision to either take the initiative to define an opportunity for generating knowledge, and then try to find possible client organisations, or to leave this initiative to client organisations and tackle problems proposed by them. The first option may lead to the definition of a research project that does not meet the interests of client organisations, while the second may lead to a research topic beyond the researchers area of interest or area of expertise. The dilemma is resolved through a process of negotiation. The paper proposes two models to explain this negotiation process and to resolve this dilemma: a model of the overall negotiation process, and a model of the cyclical information exchange that supports this process.