A review of the IT outsourcing empirical literature and future research directions

Abstract

An enormous amount of information has been produced about the IT outsourcing phenomenon over the last 20 years, but one has to look to the academic literature for consistent, objective, and reliable research approaches and analyses. Our review finds that, in practice, the academic literature on IT outsourcing has very much honored both rigor and relevance in the ways in which research has been conducted. Our central purpose in the review was to answer two research questions: What has the empirical academic literature found about information technology outsourcing (ITO) decisions and outcomes? What are the gaps in knowledge to consider in future ITO research? To answer these questions, we examined 164 empirical ITO articles published between 1992 and 2010 in 50 journals. Adapting a method used by Jeyaraj et al. (2006), we encapsulated this vast empirical literature on ITO in a way that was concise, meaningful, and helpful to researchers. We coded 36 dependent variables, 138 independent variables, and 741 relationships between independent and dependent variables. By extracting the best evidence, we developed two models of outsourcing: one model addressed ITO decisions and one model addressed ITO outcomes. The model of ITO decisions includes independent variables associated with motives to outsource, transaction attributes, client firm characteristics, and influence sources. The model of ITO outcomes includes independent variables associated with client and supplier capabilities, relationship characteristics, contractual governance, decision characteristics, and transaction attributes. We also examined the interactions among broad categories of variables and the learning curve effects resulting from feedback loops. Overall, ITO researchers have a broad and deep understanding of ITO. However, the field continues to evolve as clients and suppliers on every inhabited continent participate actively in the global sourcing community. There is still much research yet to be done. We reviewed recent studies that have identified gaps in current knowledge and proposed future paths of research pertaining to strategic motivations, environmental influences, dynamic interactions, configurational and portfolio approaches, global destinations, emerging models, reference theory extension, and grounded theory development.

Appendices

Appendix A

Master codes

• 1 Absorptive Capacity – Client: A client organization's ability to scan, acquire, assimilate, and exploit valuable knowledge (Cohen and Levinthal, 1990; Lee, 2001; Lin et al., 2007).

• 2 Absorptive Capacity – Supplier: A supplier organization's ability to scan, acquire, assimilate, and exploit valuable knowledge (Cohen and Levinthal, 1990; Lee, 2001).

• 3 Access to Expertise/Skills: A client organization's desire or need to access supplier skills/expertise (e.g., Lacity et al., 1994; Clark et al., 1995).

• 4 Access to Global Markets: A client organization's desire or need to gain access to global markets by outsourcing to suppliers in those markets (e.g., Sobol and Apte, 1995; Rao et al., 2006).

• 5 Alignment of IS and Business Strategy: The fit or congruence between a firm's business strategy and its outsourcing strategy (McLellan et al., 1995; Lee, 2006).

• 6 Asset Specificity: The degree to which an asset can be redeployed to alternative uses and by alternative users without sacrifice of productive value (Williamson, 1976, 1991).

• 7 Benefits and Risk Sharing: Degree of articulation and agreement on the benefits and risk sharing between partners engaged in an outsourcing arrangement (e.g., Lee and Kim, 1999).

• 8 Business Risk: The probability that an action will adversely affect an organization (Wikipedia).

• 9 Business Strategic Type: An organization's strategy to address three fundamental business problems – entrepreneurial, engineering, and administrative. Categorized under the Miles and Snow typology as Defenders, Prospectors, Analyzers, and Reactors (Miles and Snow, 1978; Teng et al., 1995; Aubert et al., 2008, 2004).

• 10 Business/Process Performance Improvements: A client organization's desire or need to engage a supplier to help improve a client's business, processes, or capabilities (DiRomualdo and Gurbaxani, 1998).

• 11 Career Development of IS Employees: A client organization's desire or need to provide better career opportunities for IT employees (e.g., Apte et al., 1997).

• 12 Centralization of IS Department: The degree to which the IS department's decision-making is concentrated within a particular group or location (Sobol and Apte, 1995; Wikipedia).

• 13 Change Catalyst: A client organization's desire or need to use outsourcing to bring about large-scale changes in the organization (e.g., Linder, 2004).

• 14 CIO – CEO Proximity: The reporting level of the CIO vis-à-vis the CEO (e.g., Arnett and Jones, 1994).

• 15 Clear Authority Structures: A supplier's obligation to the client firm in terms of delineating the decision-making rights and reporting structures for an outsourcing engagement, in terms of the roles and responsibilities of all parties involved (Koh et al., 2004).

• 16 Client Experience with Outsourcing: A client organization's level of experience with outsourcing or offshoring (e.g., Gopal et al., 2003).

• 17 Client Management Capability: The extent to which a supplier organization is able to effectively manage client relationships (e.g., Levina and Ross, 2003).

• 18 Client Outsourcing Readiness: The extent to which a client organization is prepared to engage an outsourcing supplier by having realistic expectations and a clear understanding of internal costs and services compared to outsourced costs and services (e.g., Cullen et al., 2005; Iacovou and Nakatsu, 2008).

• 19 Client Relationship Management Capability: A supplier firm's capability to effectively manage its relationships with client firms (e.g., Levina and Ross, 2003).

• 20 Client Size: The size of a client organization usually measured as total assets, sales, and/or number of employees (e.g., Koh et al, 2004).

• 21 Client User Involvement/Participation: The degree to which users in the client organization participate in outsourcing (e.g., Iacovou and Nakatsu, 2008).

• 22 Client-specific Knowledge Required: The degree to which a unit of work requires a significant amount of understanding/knowledge about unique client systems, processes, or procedures (e.g., Nam et al., 1996; Aubert et al., 2004; Dibbern et al., 2008).

• 23 Client-Supplier Interface Design: The planned structure on where, when, and how client and supplier employees work, interact, and communicate (e.g., Rottman and Lacity, 2006).

• 24 Commercial Exploitation: A client organization's desire or need to partner with a supplier to commercially exploit existing client assets or to form a new enterprise (e.g., DiRomualdo and Gurbaxani, 1998; Agarwal et al., 2006).

• 25 Commitment: The degree to which partners pledge to continue the relationship (e.g., Lee and Kim, 1999; Bhargava and Sundaresan, 2004).

• 26 Communication: The degree to which parties are willing to openly discuss their expectations, directions for the future, their capabilities, and/or their strengths and weaknesses (e.g., Klepper, 1995).

• 27 Concern for Security/Intellectual Property: A client organization's concerns about security of information, transborder data flow issues, and protection of intellectual property (e.g., Khalfan, 2004; Walden, 2005; Rao et al., 2006).

• 28 Conflict: Degree of incompatibility of activities, resources, and goals between partners (e.g., Lee and Kim, 1999).

• 29 Contract Detail: The number or degree of detailed clauses in the outsourcing contract, such as clauses that specify prices, service levels, benchmarking, warranties, and penalties for non-performance (e.g., Pinnington and Woolcock, 1995; Poppo and Zenger, 2002).

• 30 Contract Duration: The duration of the contract in terms of time (e.g., Lacity and Willcocks, 1998).

• 31 Contract Flexibility: The degree to which a contract specifies contingencies and enables parties to change contractual terms (e.g., Kern et al., 2002).

• 32 Contract Negotiation Capability: The extent to which a client organization is able to effectively bid, select, and negotiate effective contracts with suppliers (e.g., Feeny and Willcocks, 1998).

• 33 Contract Recency: Contract date as either the year the contract was signed or years lapsed (e.g., Lacity and Willcocks, 1998).

• 34 Contract Size: The size of the outsourcing contract usually measured as the total value of the contract in monetary terms (e.g., Oh et al., 2006; Rottman and Lacity, 2008).

• 35 Contract Type: A term denoting different forms of contracts used in outsourcing. Examples include customized, fixed priced, time and materials, fee for service, and partnership based contracts (e.g., McFarlan and Nolan, 1995; Poppo and Zenger, 2002; Ross and Beath, 2006).

• 36 Control Mechanisms: Certain means or devices a controller uses to promote desired behavior by the controlee (e.g., Kirsch, 1997; Choudhury and Sabherwal, 2003).

• 37 Cooperation: The degree to which client and supplier employees are willing to work together in common pursuit (e.g., Dibbern et al., 2008).

• 38 Cost Predictability: A client organization's desire or need to use outsourcing to better predict IS costs (e.g., Sobol and Apte, 1995).

• 39 Cost Reduction: A client organization's need or desire to use outsourcing to reduce or control IS costs (e.g., Barthelemy and Geyer, 2004).

• 40 Country: The nationality of the client or supplier organization (e.g., Barthélemy and Geyer, 2005).

• 41 Critical Role of IS – Organization: The degree to which a client organization views IS as a critical enabler of business success (e.g. Teng et al., 1995; Saunders et al., 1997; Straub et al., 2008).

• 42 Critical Role of IS – Transaction: The degree to which a client organization views an IS transaction as a critical enabler of business success (e.g., Teng et al., 1995; Saunders et al., 1997; Straub et al., 2008).

• 43 Cultural Distance: The extent to which the members of two distinct groups (such as client and supplier organizations) differ on one or more cultural dimensions (e.g., Dibbern et al., 2008).

• 44 Cultural Distance Management: The extent to which client and supplier organizations understand, accept, and adapt to cultural differences (e.g., Winkler et al., 2008).

• 45 Culture: Shared values, beliefs, practices, and assumptions that characterize a group (Allen et al., 2002; Roberts and Wasti, 2002).

• 46 Decision Sponsorship: The stakeholders involved in an outsourcing decision (e.g., Lacity and Willcocks, 1998).

• 47 Demonstratability: The extent to which a supplier organization articulates outcomes in a convincing way to the client (e.g., Oza et al., 2006).

• 48 Domain Understanding: The extent to which a supplier has prior experience and/or understanding of the client organization's business and technical contexts, processes, practices, and requirements (e.g., Clark et al., 1995; Gopal et al., 2002).

• 49 Effective Knowledge Sharing: The degree to which clients and suppliers are successful in sharing and transferring knowledge (e.g., Lee, 2001; Murray et al., 2009).

• 50 Engagement of Multiple Suppliers: The situation in which a client organization engages more than one supplier or when one supplier subcontracts client work (e.g., Currie, 1998).

• 51 Ethnocentricism: The tendency to believe that one's own race or ethnic group is the most important and that some or all aspects of its culture are superior to those of other groups (e.g., Van den Berghe, 1981; Wikipedia).

• 52 Evaluation Process: The client organization's process for evaluating and selecting suppliers (e.g., Cullen et al., 2005).

• 53 External Production Cost Advantage: The degree to which a supplier is perceived to have an advantage over a client organization in production cost economies (e.g., Williamson, 1991; Koh et al, 2004).

• 54 Fear of Losing Control: A client organization's concerns that outsourcing may result in loss of control over IT (e.g., Patane and Jurison, 1994; Collins and Millen, 1995).

• 55 Financial Leverage: The degree to which a business utilizes debt rather than equity to fund its operations (e.g., Hall and Liedtka, 2005).

• 56 Financial Slack: Financial resources an organization possesses in excess of what is required to maintain the organization (e.g., Koh et al, 2004; Hall and Liedtka, 2005).

• 57 Flexibility Enablement: A client organization's desire or need to outsource to increase the flexibility of the use and allocation of resources (e.g., Slaughter and Ang, 1996).

• 58 Focus on Core Capabilities: A client organization's desire or need to outsource in order to focus on its core capabilities (e.g., Lacity et al., 1994; Linder, 2004).

• 59 Frequency of Project Status Meetings: The regularity with which project status meetings between the client and the supplier take place (e.g., Gopal et al., 2002).

• 60 Future Business Potential: A supplier's perception of the possibility of obtaining future contracts from a client (e.g., Gopal et al., 2003).

• 61 Geographic Distance: The physical distance between two locations (e.g., Dibbern et al., 2008).

• 62 Head Count Reduction: A client organization's need or desire to use outsourcing to reduce the number of staff (e.g., De Loof, 1995).

• 63 Industry: The primary industry classification of a client organization; common classifications include service vs manufacturing, private vs public, banking vs others, etc. (e.g., Loh and Venkatraman, 1992; Grover et al., 1994; Barthélemy and Geyer, 2004).

• 64 Influences – Coercive: Influences that result from both formal and informal pressures exerted on an organization by other organizations upon which they are dependent (e.g., DiMaggio and Powell, 1991; Ang and Cummings, 1997).

• 65 Influences – External and Internal: The combination of external media, supplier pressure, and internal communications at the personal level among managers of companies (e.g., Collins and Millen, 1995; Pinnington and Woolcock, 1995; Hu et al., 1997).

• 66 Influences – Mimetic: Influences that arise from the perception that peer organizations are more successful; by modeling themselves based on peer organizations, the mimicking organization aims to achieve similar results (e.g., DiMaggio and Powell 1991; Ang and Cummings 1997).

• 67 Influences – Normative: Influences arising from norms of professionalism, including formal education and professional and trade associations (e.g., DiMaggio and Powell, 1991).

• 68 Information Intensity: An indicator of whether a client organization is IT intensive; as measured, for example, by IS Budget as percentage of Sales (e.g., Grover et al., 1994).

• 69 Initial Trust: One party's willingness to believe the other party based on the economic and cognitive cues that the other party would fulfill the commitment and behave in a predictable way (e.g., Lee et al., 2008).

• 70 Innovation: A client organization's desire or need to use outsourcing as an engine for innovation (e.g., Quinn, 2000).

• 71 IS Change Management Capability: The extent to which a client organization effectively manages change (e.g., Ranganathan and Balaji, 2007).

• 72 IS Chargeback Structure: The extent to which a client organization charges users for IS services, usually categorized as either a cost center or profit center (Barthélemy and Geyer, 2005).

• 73 IS Department Performance: CIO's, CEO's, or organizational members’ perceptions of the IS function's performance or competence (e.g., Arnett and Jones, 1994).

• 74 IS Department Power: The level of influence of the IS department on the organization (e.g., Nam et al., 1996; Dibbern and Heinzl, 2002).

• 75 IS Department Size: The size of an IS department usually measured as total IS budget, number of functions, and/or number of employees (e.g., Barthélemy and Geyer, 2005)

• 76 IS Human Resource Management Capability – Client: A client organization's ability to identify, acquire, develop, and deploy human resources to achieve its organizational objectives (e.g., Levina and Ross, 2003; Ranganathan and Balaji, 2007).

• 77 IS Human Resource Management Capability – Supplier: A supplier organization's ability to identify, acquire, develop, and deploy human resources to achieve both supplier's and client's organizational objectives (e.g., Levina and Ross, 2003).

• 78 IS Technical and Methodological Capability – Client: A client organization's level of maturity in terms of technical or process-related standards including the Capability Maturity Model (CMM), Capability Maturity Model Integrated (CMMI), and the Information Technology Infrastructure Library (ITIL) and best practices such as component reuse (e.g., Davenport, 2005, Rottman and Lacity, 2006; Kotlarsky et al., 2007).

• 79 IS Technical and Methodological Capability – Supplier: A supplier organization's level of maturity in terms of technical or process-related standards including the Capability Maturity Model (CMM), Capability Maturity Model Integrated (CMMI), and the Information Technology Infrastructure Library (ITIL) and best practices such as component reuse (e.g., Levina and Ross, 2003).

• 80 IT Management Competence: Senior executives’ perceptions of the IT manager's competence (e.g., Willcocks and Plant, 2003).

• 81 Legal and Political Uncertainties: The extent to which a county's legal and political environments are uncertain, unstable, or unfamiliar (e.g., Smith and McKeen, 2004).

• 82 Length of Relationship: The number of years a client and a supplier organization has worked together (e.g., Lee and Kim, 1999; Gopal et al., 2003).

• 83 Maintenance Efforts: The effort required to maintain an information system; measured, for example, by the number of system maintainers assigned to maintenance tasks (e.g., Park and Kim, 2005).

• 84 Managing Client Expectations: The extent to which a supplier fosters realistic client expectations, avoids over-promising, and informs clients about changes in project status in a timely manner (e.g., Oza and Hall, 2005; Taylor, 2006).

• 85 Measurement Difficulty: The degree of difficulty in measuring performance of exchange partners in circumstances of joint effort, soft outcomes, and/or ambiguous links between effort and performance (e.g., Eisenhardt, 1989).

• 86 Mutual Dependency: The degree to which a client and supplier organization depend on each other (e.g., Lee and Kim, 1999).

• 87 Mutual Understanding: Degree of understanding of behaviors, goals, and policies between partners (e.g., Lee and Kim, 1999).

• 88 Need to Generate Cash: A client organization's desire or need to generate cash through the sale of IT assets to the supplier (Smith et al., 1998).

• 89 Norms: Established expectations of behavior (e.g., Macneil, 1983; Kern and Blois, 2002).

• 90 Number of Liaisons: The number of people who serve as intermediaries between client and supplier organizations (e.g., Gopal et al., 2002).

• 91 Opportunism: ‘Self-interest seeking with guile’ or ‘Making of false or empty, that is self-disbelieved, threats and promises’ (Williamson, 1976, 1991).

• 92 Outsourcing – Applications Development and Maintenance: The outsourcing of new application development and/or the support and maintenance of existing applications (e.g., Grover et al., 1996).

• 93 Outsourcing – End-user support: The outsourcing of activities pertaining to end-user support such as help/service desk (e.g., Grover et al., 1996).

• 94 Outsourcing – Planning and Management: Outsourcing of activities involving IS planning and management (e.g., Grover et al., 1996).

• 95 Outsourcing – Systems Operations: Outsourcing of activities pertaining to systems operations such as data centers (e.g., Grover et al., 1996).

• 96 Outsourcing – Telecommunications and Networks: Outsourcing of activities associated with telecommunications and networks (e.g., Grover et al., 1996).

• 97 Outsourcing Decision – Degree of Outsourcing: The amount of outsourcing as indicated by percentage of IS budget outsourced and/or type and number of IS functions outsourced (e.g., Lacity and Willcocks, 1998).

• 98 Outsourcing Decision – Make or Buy: The fundamental make or buy decision (e.g., Williamson, 1991) in which a client organization decides to keep IT in-house or decides to engage an outsourcing supplier, measured as a binary variable.

• 99 Outsourcing Decision – Offshoring: A client organization's decision to engage an offshore supplier (e.g., Rao et al., 2006; Mirani, 2007).

• 100 Outsourcing Outcomes – Business Performance – Client: The degree to which a client organization reports business performance improvements as a result of an outsourcing decision, such as stock price performance, return on assets, expenses, and profits (e.g., Agarwal et al., 2006; Mojsilovic et al., 2007).

• 101 Outsourcing Outcomes – Business Performance – Supplier: The degree to which a supplier organization reports business performance improvements as a result of an outsourcing decision, such as stock price performance, return on assets, expenses, and profits (e.g., Gopal et al., 2003; Madison et al., 2006).

• 102 Outsourcing Outcomes – IS Performance: The degree to which a client organization reports IS performance improvements as a consequence of outsourcing, such as reports of costs savings realized (e.g., Lacity and Willcocks, 1998; Dibbern et al., 2008).

• 103 Outsourcing Outcomes – Project Performance: Reports on project outcomes in terms of costs, quality, and/or time for outsourced projects (e.g., Gopal et al., 2002).

• 104 Outsourcing Outcomes – Project Performance – Offshore: Reports on project outcomes in terms of costs, quality, and/or time for projects outsourced offshore (e.g., Rottman and Lacity, 2008).

• 105 Outsourcing Outcomes – SET Satisfaction: A client organization's perceived degree of satisfaction with outsourcing across strategic, economic, and technical (SET) dimensions (e.g., Grover et al., 1996).

• 106 Outsourcing Outcomes – Success: A client organization's general perceptions of success and satisfaction with outsourcing (e.g., Levina and Ross, 2003).

• 107 Outsourcing Outcomes – Success – Offshore: A client organization's general perceptions of success and satisfaction with offshore outsourcing (e.g., Winkler et al., 2008).

• 108 Partnership View: A client organization's consideration of suppliers as trusted partners rather than as opportunistic vendors (e.g., Saunders et al., 1997; Kishore et al., 2003).

• 109 Persistence of Expectations: ‘The tendency for prior beliefs and expectations to persevere, even in the face of new data or when the data that generated those beliefs are no longer valid’ (Ho et al., 2003).

• 110 Political Reasons: A client stakeholder's desire or need to use an outsourcing decision to promote personal agendas such as eliminating a burdensome function, enhancing their career, or maximizing personal financial benefits (e.g., Lacity et al., 1994; Hall and Liedtka, 2005).

• 111 Prior Client/Supplier Working Relationship: The situation in which the client and supplier organizations have worked together in the past (e.g., Lee and Kim, 1999; Gopal et al., 2003).

• 112 Prior Firm Performance: Firm performance usually measured as net profits, return on assets, expenses, earnings per share, and/or stock price prior to an outsourcing decision. (e.g., Hall and Liedtka, 2005).

• 113 Process Performance: The level of performance of a process, such as process costs, operational efficiency, quality, or level of customer satisfaction (e.g., Downing et al., 2003).

• 114 Product Quality: The quality of the end product delivered as part of an outsourcing/offshoring arrangement (e.g., Whitten and Leidner, 2006).

• 115 Project Execution Swiftness: The speed with which a project was carried out and deployed (e.g., Agarwal et al., 2006).

• 116 Project Scoping Accuracy: A supplier firm capability to estimate the contract scope accurately (not underbid or overbid) (Koh et al., 2004).

• 117 Prompt Payment: A client's prompt payment to suppliers (e.g., Ho et al., 2003).

• 118 Rapid Delivery: A client organization's desire or need to engage in outsourcing in order to speed up project delivery (e.g., Khan and Fitzgerald, 2004).

• 119 Relational Governance: The unwritten, worker-based mechanisms designed to influence inter-organizational behavior (Macneil, 1980; e.g., Poppo and Zenger, 2002).

• 120 Relationship Flexibility: The willingness of client and supplier organizations to adapt the relationship to changing circumstances (e.g., Klepper, 1995; Haried and Ramamurthy, 2009).

• 121 Relationship Quality: The quality of the relationship between a client and supplier (e.g., Lee, 2001; Whitten and Leidner, 2006).

• 122 Relationship Specific Investment: Specific investments made over time which discourage opportunism, reinforce signals of the client firms, and create extendedness of the relationships (e.g., Goo et al., 2007).

• 123 Risk Management Capability – Client: A client organization's practice of identifying, rating, and mitigating potential risks associated with outsourcing (e.g., Smith and McKeen, 2004).

• 124 Risk Management Capability – Supplier: A supplier organization's practice of identifying, rating, and mitigating potential risks associated with outsourcing (e.g., Smith and McKeen, 2004).

• 125 Scalability: The ability to scale volume of service up or down based on demand (e.g., Ross and Beath, 2006).

• 126 Service Quality: The quality of a service, frequently measured as a client's perception of a satisfactory service performance by the supplier (e.g., Park and Kim, 2005).

• 127 Social Capital: The sum of the actual and potential resources embedded within, available through, and derived from the network of relationships possessed by an individual or social unit (Nahapiet and Ghoshal, 1998; Rottman, 2008).

• 128 Stakeholder Buy-in: Gaining commitment and support from all parties involved in outsourcing-related decisions (e.g., Seddon, 2001).

• 129 Supplier Competition: The presence of multiple, reputable and trustworthy IT service providers which can provide a range of choices for the clients (e.g., Ang and Cummings, 1997).

• 130 Supplier Employee Performance: The client's perception of the performance of individual supplier employees (e.g., Grover et al., 1996; Winkler et al., 2008).

• 131 Supplier Management Capability: The extent to which a client organization is able to effectively manage outsourcing suppliers (e.g., Feeny and Willcocks, 1998; Willcocks et al., 2007).

• 132 Supplier Profitability: The profit possible for a supplier on an outsourcing contract (Kern et al., 2002).

• 133 Supplier Reputation: The public's perception of a supplier's capabilities based on past performance and financial status (e.g., Levina and Ross, 2003).

• 134 Supplier Size: The size of a supplier organization usually measured as total assets, sales, and/or number of employees (e.g., Oh et al., 2006).

• 135 Supplier's Core Competencies: A supplier's set of capabilities that enables it to gain a competitive advantage over rivals (e.g., Klepper, 1995; Feeny et al., 2005).

• 136 Switching Costs: The costs incurred when a client organization changes from one supplier or marketplace to another (e.g., Whitten and Leidner, 2006).

• 137 Task Complexity: The degree to which a task requires compound steps, the control of many variables, and/or where cause and effect are subtle and dynamic (e.g., Gopal et al., 2002).

• 138 Task Interdependence: The level of integration and coupling among tasks (e.g., Mirani, 2007).

• 139 Task Structure: The degree of clarity and structure pertaining to tasks (e.g., Mirani, 2007).

• 140 Technical Knowledge Required: The degree to which a unit of work requires a significant amount of understanding/knowledge about unique, specialized, or advanced technologies (e.g., Nelson et al., 1996; Aubert et al., 2004).

• 141 Technical Reasons: A client organization's desire or need to engage in an outsourcing relationship in order to gain access to leading edge technology available through the suppliers and which may not be available in-house (e.g., Altinkemer et al., 1994; Sobol and Apte, 1995).

• 142 Time Zone Differences: The difference in local times between two locations as measured in hours (e.g., Gokhale, 2007).

• 143 Top Management Commitment/Support: The extent to which senior executives provide leadership, support, and commitment to outsourcing/offshoring (e.g., Lee and Kim, 1999; Seddon, 2001).

• 144 Transaction Costs: The effort, time, and costs incurred in searching, creating, negotiating, monitoring, and enforcing a service contract between buyers and suppliers (Williamson, 1991; Koh et al, 2004).

• 145 Transaction Frequency: The number of times a client organization initiates a transaction, typically categorized as either occasional or frequent (Williamson, 1991).

• 146 Transaction Homogeneity: The degree to which the bundle of IT products and services are homogenous (e.g., Seddon, 2001).

• 147 Transaction Size: The size of a transaction in terms of dollar value or effort (e.g., Gopal et al., 2003).

• 148 Transition Management Capability: The extent to which a client organization effectively transitions services to outsourcing suppliers or integrates client services with supplier services (e.g., Cullen et al., 2005).

• 149 Trust: The confidence in the other party's benevolence (e.g., Dibbern et al., 2008).

• 150 Uncertainty: The degree of unpredictability or volatility of future states as it relates to the definition of IS requirements, emerging technologies, and/or environmental factors (Williamson, 1991; e.g., Poppo and Zenger, 2002; Aubert et al., 2004).

Appendix B

Email template to authors to verify codes

Dear [AUTHOR],

We hope this email finds you well.

We coded the entire body of empirical (both quantitative and qualitative) IT Outsourcing literature from 1992 to 2010. To ensure the accuracy of our codes, we are randomly selecting a subset of the 164 articles we coded for review by authors. You were selected!

We are hoping that you will validate how we coded some or all of the relationships in your paper:

[STUDY REFERENCE]

We have a master coding list of 150 variables used in ITO research. We mapped the variables you used in your paper to our master coding list so we could more easily summarize findings across studies. We were hoping you would indicate the extent to which you think our coding of your study is reasonable.

We also coded the findings between independent and dependent variables. The coding scheme assigns four possible values to the relationship between independent and dependent variables: ‘+1,’ ‘−1,’ ‘0,’ and ‘M.’ We coded a ‘+1’ for positive relationships, ‘−1’ for negative relationships, an ‘M’ for a relationship mattered, and ‘0’ for relationships that were studied but not empirically significant. A more thorough explanation of the codes is included below.

Below you will find what we have coded for your paper at a high level and the relevant descriptions of our master variables below the table. Please tell us the extent to which you agree with our coding for each of the findings from your study listed in the table below. Please use the 7-point Likert Scale on the right-hand column of the table.

Your checks will go long way toward our initiative and will be much appreciated. Please don’t hesitate to contact us if you have questions. We are hoping you will be able to respond within one week's time.

Thank you!

Coding table, descriptions of variables, and detailed explanation (if needed) of coding scheme follow.

Our Descriptions of our Master Variable Names: [Here descriptions of relevant independent and dependent variables for a study were provided].

[Explanation of Codes Followed]

illustration

Appendix C

Relationships between independent variables and ITO decisions and ITO outcomes

This appendix shows the relationships between independent variables and the two broad categories of dependent variables (ITO decisions and ITO outcomes). For each relationship, a ‘1’ indicates a positive and significant relationship; ‘−1’ indicates a negative and significant relationship; ‘0’ indicates a not-significant relationship; ‘M’ indicates the independent variable mattered when operationalized as a categorical variable (see Table 3 for detailed explanations). The relationships that were examined at least five times are boxed. The relationships that were examined at least five times and met the criteria for consistent results as described in the text are marked with an ‘^*’.

illustration