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Outsourcing of Information Systems in Small and Medium Sized Enterprises: A Test of a Multi-Theoretical Causal Model

  • Chapter
Information Systems Outsourcing

Summary

This paper examines the situation of information systems (IS) outsourcing in a business sector intrinsic to small and medium sized enterprises (SME). Based on transaction cost theory, resource-based theory and power theory, the critical determinants for IS outsourcing are deduced and summarized within a theoretical framework. The framework is transformed into a structural equation model and empirically tested using 34 SME across five different IS functions. The main results of this study are as follows:

  • Overall, the share of IS outsourcing in SME may be categorized as moderate.

  • The IS functions in SME are selectively outsourced, i.e., the degree of outsourcing varies across different IS functions. Whereas applications development makes up the largest share thereof, planning and management remain mostly within the boundaries of the firm.

  • An assessment of internal resource deficits vis-à-vis external service providers establishes the predominate determinant which explains the varying degrees of outsourcing IS functions.

  • Contrastingly, rationality calculations, such as consideration of transaction costs and assessment of the strategic significance of IS, seem to recede to the background.

Another version of this paper appeared as: Dibbcrn. J. and Heinzi, A. “Outsourcing der Informationsverarbeitung im Mittelstand: Test eines mulütheoreüsehen Kausalmodells,” WIRTSCIIAFTSINFORMATIK (43:4), 2001, pp. 339–350. The cuirent version appears with permission of WIRTSCHAFTSINHORMATIK.

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Authors and Affiliations

  1. Department of Information Systems, University of Bayreuth, 95440, Bayreuth, Germany

    Jens Dibbern & Armin Heinzl

Authors
  1. Jens Dibbern
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  2. Armin Heinzl
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Editors and Affiliations

  1. Bauer College of Business, University of Houston, 77204-6282, Houston, TX, USA

    Rudy Hirschheim

  2. Universität Bayreuth, Universitätsstraße 30, 95440, Bayreuth, Germany

    Armin Heinzl  & Jens Dibbern  & 

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Dibbern, J., Heinzl, A. (2002). Outsourcing of Information Systems in Small and Medium Sized Enterprises: A Test of a Multi-Theoretical Causal Model. In: Hirschheim, R., Heinzl, A., Dibbern, J. (eds) Information Systems Outsourcing. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-04754-5_4

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  • DOI: https://doi.org/10.1007/978-3-662-04754-5_4

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