Recently, information systems (IS)outsourcing has became a viable strategic alternative in the management of information systems. While much of IS literature continue to note the alarming frequency with which IS outsourcing fail to meet organizational goals. That is not so surprising given that IS outsourcing is a very complex task because there are relational risk relates to cooperation between client
firms and outsourcers, and performance risk has to do with the hazards of not achieving the performance of an IS outsourcing. Thus, to obtain the benefits of outsourcing and reduce its risks, clients must take care of managing IS outsourcing. However, there is little known about the management of IS outsourcing in the existing literature. This thesis examines one aspect of the management process: the function of control. In this research, interorganizational control can be viewed in a behavioral sense as attempts to ensure that partners working on IS outsourcing act according to an agreed-upon strategy to achieve the desired project or organizational objectives.
The purpose of this study is to enhance an understanding of the management of ISoutsourcing by introducing the concept of interorganizational control. This study investigates the following specific research questions. First, who are controllers or controlless in the context of IS outsourcing? Second, how do the controllers exercise control to manage IS oursourcings? Third, what are the determinants of the controllers' selection of a control mode? Fourth, is there any relationship between control modes and IS outsourcing performance?
To answer theses research questions, at the initial phase of the thesis, providing a more comprehansive and integrative framework based on the existing literature from different management ares: MIS, Marketing, Organization, Strategic Management, and different perspectives: economic, social, organizational perspectives. At the second phase, this thesis was conducted three independent studies different from research methodologies or objectives based on the proposed framework. The first study was conducted at the system level in four systems from
three firms by using the case study method. This study focus on identiflying key acotrs and control mechanisms in the context of IS oursourcing. The second study was undertaken at the project level in 66 outsourced IS Development(OISD) projects
from 35 firms by using survey research method. This study investigates the determinants of the selection of control modes, and the relationships between control modes and OISD oursourcing performances. The third study is a survey research was performed at project level in 67 OISD projects from 67 firms. This study examines the effects of the key actors' competencies and their partnership on OISD projects performance.
Major finding of the three empirical studies can be summarized as follow. First, the key actors of IS outsourcing. Second, client firms in the IS outsourcing context implement various types of control identified from prior literatrure: behavior control, ourcome control, social control, and self control. These studies also suggest that behavior control is exercised by internal IS staff, while outcome control and social control are exercised by both the user and IS staff. Self control is exercised through the contollee`s cognitive process including self-management, self evaluation and self-reinforcement. Third, these results indicate that the circumstances under which various modes of control will be exercised in the context of IS outsourcing. The results suggest that outcome control is a function of the extent of asset specificity, reciprocal investment, organization size, ourcome measurability, and behavior observability; and that social control is determined by the extent of interorgnizational trust, previous relations, interdependency, asset specificity, reciprocal investment, client firm's knowledge about the IS outsourcing task, outcome measurability, and behavior observability; and that self control is a function of the amount of interorgnizational trust, previous relations, interdependency, asset specificity, reciprocal investment, ourcome measurability, and behavior observability. Finally, several implications are presented, and future directions are suggested.
