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Retained Organizations in IT Outsourcing

Linking Organization Design to Outsourcing Management Problems

Abstract

IT outsourcing is a strategic option which enables companies to focus on their core competencies. Over time however, many outsourcing arrangements suffer from severe problems. While the design of retained organizations is generally seen as a critical element, there is hardly any empirical evidence on how the choice of the organizational setup is linked to the occurrence of outsourcing management problems later on. In this work, a quantitative study across various outsourcing arrangements is used to identify the key outsourcing management problems and their interdependency with organizational attributes of retained organizations. It is shown that the key problems differ by outsourcing degree, and critical organizational attributes for each of these problems are unveiled. The paper’s objective is to enhance the design of retained organizations to enable more mature and successful outsourcing solutions as well as to provide foundations for future IS research.

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Notes

  1. 1.

    We used Google Scholar with variations/combinations of the following keywords: IT outsourcing, retained organization, risk, challenges, success, demand management, provider management, and organization design.

  2. 2.

    For examples of how qualitative data was coded, see Online Appendix C.

  3. 3.

    http://www.audiotranskription.de/english.

  4. 4.

    For a questionnaire excerpt see Online Appendix D.

  5. 5.

    The Likert scores for rating difficulties were verbalized as “minor”, “tending towards minor”, “tending towards major”, and “major”.

  6. 6.

    A short description of each outsourcing management problem is attached in Online Appendix A.

  7. 7.

    A short description of each organizational attribute is attached in the Online Appendix A.

  8. 8.

    A complete overview of significant correlations is attached in the Online Appendix B.

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Correspondence to Marius Goldberg.

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Accepted after four revisions by Prof. Dr. Heinzl.

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Goldberg, M., Kieninger, A., Satzger, G. et al. Retained Organizations in IT Outsourcing. Bus Inf Syst Eng 59, 111–124 (2017). https://doi.org/10.1007/s12599-016-0449-x

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Keywords

  • IT outsourcing
  • Retained organization
  • IT organization
  • Organization design
  • Outsourcing relationship