Outsourcing and offshore outsourcing of information technology in major corporations

Abstract

Purpose

The purpose of this paper is to explore the views of top corporate financial executives on the success of implementation of systems outsourcing and offshore outsourcing, as well as the variables associated with success in these areas.

Design/methodology/approach

An analysis of secondary data obtained from the Financial Executives International comprehensive survey‐based research on technology issues for financial executives. Regression analysis and other statistical methods are used.

Findings

The study examined usage of outsourcing and offshore outsourcing from the top financial executive's perspective. Only 30 percent of the surveyed companies outsourced IT and only 25 percent engaged in offshore outsourcing IT. Size of the company did significantly influence usage. The major motivators behind the decision to pursue outsourcing were the views that IT is not a core competency and that significant cost reduction was possible. The experiences of the organizations surveyed reflect a general satisfaction with outsourcing and offshore outsourcing. But finally, it was found that while overall use of outsourcing did correlate with higher IT returns, offshore outsourcing did not correlate with higher IT return to the organization at traditional significance levels.

Research limitations/implications

The study can be used as a basis for further exploration on outsourcing and offshore outsourcing success, influencing variables, and motivators.

Practical implications

The findings can be used to guide management teams in outsourcing and offshore outsourcing decisions to maximize returns to their organizations.

Originality/value

Despite many studies that examine success from the theoretical and IT perspectives, this paper provides a large sample set, which empirically reviews major corporations' top financial executives' experiences with outsourcing and offshore outsourcing. In addition, it begins to explore the variables influencing overall outsourcing and offshore outsourcing success perception. Major contributions are the extent of the detail, the large dataset analysis, and the CFO rather than CIO perspective.

Citation

Peslak, A.R. (2012), "Outsourcing and offshore outsourcing of information technology in major corporations", Management Research Review, Vol. 35 No. 1, pp. 14-31. https://doi.org/10.1108/01409171211190788