Information systems outsourcing satisfaction: some explanatory factors
| Pages | 1067-1085 |
| Published date | 13 July 2015 |
| Date | 13 July 2015 |
| DOI | https://doi.org/10.1108/IMDS-01-2015-0030 |
| Author | Reyes Gonzalez,Jose L. Gasco,Juan Llopis |
| Subject Matter | Information & knowledge management,Information systems,Data management systems |
Information systems
outsourcing satisfaction:
some explanatory factors
Reyes Gonzalez, Jose L. Gasco and Juan Llopis
Department of Business Organisation, University of Alicante, Alicante, Spain
Abstract
Purpose –The purpose of this paper is to analyse Information Systems outsourcing success,
measuring the latter according to the satisfaction level achieved by users and taking into account three
success factors: the role played by the client firm’s top management; the relationships between client
and provider; and the degree of outsourcing.
Design/methodology/approach –A survey was carried out by means of a questionnaire answered
by 398 large Spanish firms. Its results were examined using the partial least squares software and
through the proposal of a structural equation model.
Findings –The conclusions reveal that the perceived benefits play a mediating role in outsourcing
satisfaction and also that these benefits can be grouped together into three categories: strategic;
economic; and technological ones.
Originality/value –The study identifies how some success factors will be more influent than others
depending which type of benefits are ultimately sought with outsourcing.
Keywords Satisfaction, Outsourcing, Success, SEM, Information systems, Perceived benefits
Paper type Research paper
1. Introduction
The trend towards the outsourcing of various firm processes has kept increasing
throughout the world’s developed economies during the last few years (Kim et al., 2013).
This process has occurred most visibly in the information systems/information
technologies (IS/IT) area. Although IS outsourcing has had to coexist in recent years with
backsourcing –the process of recalling operations “back in-house”after they have been
outsourced (Bhagwatwar et al., 2011; Solli-Sæther and Gottschalk, 2015) –especially due to
the financial and economic crisis originated in 2008 (Kotlarsky and Bognar, 2012), the
truth is that IS outsourcing came to stay.
IS outsourcing has consequently become consolidated as a usual practice in today’s
firms (Qi and Chau, 2013). According to Computer Economics (2014), IT outsourcing
budgets represented a 10.2 per cent of the total IT budget in 2014, and some IT activities,
such as application development, have been outsourced entirely or partly by 61 per cent of
organisations. However, despite the ever-growing trend towards outsourcing, few
organisations openly declare to have achieved success with outsourcing (Huber et al., 2014).
From the academic sphere, there has been a proliferation of studies which try
to explain the influence exerted by diverse factors on outsourcing success. For instance,
the work of Marchewka and Oruganti (2013) introduced process-and culture-related
factors as new determinants of outsourcing success. In turn, Cetinkaya et al. (2014)
dealt with the influence that relationship quality has on outsourcing success. The paper
by Lee (2001) referred to the impact of knowledge sharing, organisational capacity Industrial Management & Data
Systems
Vol. 115 No. 6, 2015
pp. 1067-1085
©Emerald Group Publis hing Limited
0263-5577
DOI 10.1108/IMDS-01-2015-0030
Received 27 January 2015
Revised 13 April 2015
Accepted4May2015
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
The authors would like to express their gratitude to the editor and the three anonymous
reviewers for all their helpful suggestions.
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IS outsourcing
satisfaction
and outsourcing relationship quality on outsourcing success. Kim and Chung (2003)
observed the influence exerted by the tasks to be outsourced as well as the relationship
features on outsourcing success. And finally, Rustagi et al. (2008) studied the
characteristics of client control over the vendor as a critical outsourcing success factor.
Despite all these studies, the literature has not given much clear advice about the keys
to IS outsourcing success (Seddon et al., 2007).
Along these research lines, the present paper seeks to study the factors which have
some bearing on IS outsourcing success, with a special focus on three of them:
relationship with providers; degree of outsourcing; and support given by the top
management. Our attention centres upon the mediating role of perceived benefits and
their influence on users’satisfaction. The novelty of our approach lies in considering
customer satisfaction as a final and comprehensive measure of outsourcing success.
Hence our definition of satisfaction as a second-order construct explained by the
perceived benefits of outsourcing –which are first-order constructs.
Our paper is based on the results of a survey carried out among the IS executives of
the largest Spanish firms. After an initial literature review which serves as the foundation
for deducing the hypotheses to be verified, the results and conclusions obtained will be
presented through the implementation of a structural equation model (SEM).
2. Literature review
IS outsourcing refers to the practice of shifting one or more organisational IT-related
activities to an outside firm (Schwarz, 2014). As global supply markets have continued
to increase, businesses now have the opportunity to reassess which IT functions
should remain in-house and which could be outsourced (Marchewka and Oruganti,
2013). However, although the IT outsourcing phenomenon has been expanding during
the last decade, the outsourcing success rate remains low (Kim et al., 2013). This
justifies our decision to perform a literature review about IS outsourcing success
factors and how to measure IS outsourcing success.
2.1 Success factors
Many factors have been identified as determinants of IS outsourcing success; amongst
them stand out factors referring to the firm’s external relationships with the client firm
such as: communication and collaboration between client and provider (Han et al., 2008);
relationship with providers (Koh et al., 2004); and knowledge transfer between provider
and client (Koh et al., 2004). Other factors are markedly internal, namely: support offered by
the client firm’s top management (Väyrynen and Kinnula, 2012); correct definition
of clients’needs (Gottschalk and Solli-Sæther, 2005); or clients’supervision of the work
carried out by their providers (Kim and Chung, 2003). A mention can also be made
of factors related to how outsourcing is approached, including type of contract (Burdon
and Bhalla, 2005) or degree of outsourcing (Grover et al., 1996).
Amongst all the factors listed above, our focus in the present work will be placed on
analysing the role played by an external factor (relationship with providers) and
another one internal to the client firm (top management’s role), together with a factor
linked to the actual outsourcing practice (degree of outsourcing).
2.1.1 Relationship with providers. IS outsourcing success requires a careful
management of client-provider relationships (Kern and Willcocks, 2002; Koh et al., 2004;
Gottschalk and Solli-Sæther, 2005). The contacts or relationships between both parties will
make it possible to build work relationships based on trust and on a comfortable mutual
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