The Varying Role of IS Capabilities for Different Approaches to Application Services Outsourcing

The literature on IT outsourcing contains several works on IS capabilities required to succeed in outsourcing.This capability perspective does not only take into account the capabilities to manage vendors, but also includesinternal relationship-related, managerial as well as technical IT capabilities. Prior research, however, does notdifferentiate between the employment of IS capabilities in different outsourcing approaches. Such approachesvary not only with respect to the ratio of the IT budget allocated externally, but also with respect to the extent ofcontrol transferred to the vendor. In order to analyze the IS capabilities required for different outsourcingapproaches, a comparative case study research with eight large enterprises from various industries in Germanyand Switzerland has been conducted. The results allow propositions about the variance of required IScapabilities, which imply that organizations need to carefully coordinate their IS capabilities with theoutsourcing strategy and capability development initiatives.