“Outsourcing” as a Mechanism of Information Technology Governance: A Cross-Sectional Analysis of Its Determinants
Name
MIT_CISR_WP_228_Outsourcing_as_a_Mechanism_of_Information_Technology_Governance_A_Cross-Sectional_Analysis_of_its_Determinants_Loh_Venkatraman.pdf
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568.53 KB
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Adobe PDF
Checksum (MD5)
a2af486539be971301caeea4af668ce5
Author(s)
Loh, Lawrence
Venkatraman, N.
Date Issued
August 1, 1991
Publisher
Cambridge, Mass.: Center for Information Systems Research, Sloan School of Management, Massachusetts Institute of Technology
Citation
Loh, Lawrence and N. Venkatraman. “‘Outsourcing’ as a Mechanism of Information Technology Governance: A Cross-Sectional Analysis of Its Determinants.” Working paper 228, Center for Information Systems Research, Sloan School of Management, Massachusetts Institute of Technology, 1991. https://dspace.mit.edu/handle/1721.1/175263.
Series/Report no.
MIT Sloan School of Management Working Paper 3272-91
CISR Working Paper 228
Abstract
This paper develops and tests a model of determinants of information technology (IT) outsourcing as a mechanism of IT governance by integrating both business and IT perspectives. Specifically, we attempt to explain the degree of IT outsourcing by business and IT competencies exemplified by their cost structures and economic performances. Additionally, we posit that outsourcing is related to business governance, particularly financial leverage. Empirical assessments involving factor and multiple regression analysis on data pertaining to 55 major U.S. corporations indicate that the following three variables -- (a) business cost structure, (b) IT cost structure, and (c) IT performance -- are significant determinants of the degree of IT outsourcing. Implications and research directions are developed.
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