Critical success factors from IT outsourcing theories:: an empirical study

Purpose - This research paper aims to identify and rank critical issues in IT outsourcing relationships. Design/methodology/approach - A total of 11 management theories were applied in this research: theory of core competencies, resource-based theory, neo-classical economic theory, transaction cost theory, contractual theory, agency theory, partnership and alliance theory, relational exchange theory, stakeholder theory, social exchange theory and theory of firm boundaries. The main method used is case studies and survey. Case studies were conducted in three IT outsourcing relationships: ABB-IBM, SAS-CSC, and RR-EDS. Findings - Core competence management and stakeholder management were found to be the most critical success factors. Future research should focus on one or two theories, explicitly laying out expectations with respect to the theories, and organizing rich data to test expectations. Originality/value - This paper demonstrates that a holistic approach to IT outsourcing is needed that recognizes and emphasizes the combination of several critical success factors. The theory-based factors have both divergent and convergent implications for management.