Date of Award

2000

Document Type

Thesis

Publisher

Edith Cowan University

Degree Name

Master of Business

Faculty

Faculty of Business and Public Management

First Supervisor

Associate Professor Dieter Fink

Abstract

Outsourcing has become an attractive option for today's organisation. Since outsourcing Information Technology (IT) is a relatively new phenomenon in Australia, little research has been conducted as to IT management strategies needed when considering outsourcing. To guide management in the decision whether or not to outsource IT, the study developed and tested a decision-making model comprising the phases of intelligence, analysis and planning, strategy selection, action, and evaluation and monitoring. The significance of decision phases and tasks contained in the model was established through a survey of major Australian organisations. The sample included Australia's top 390 companies. Such organisations would be likely to have large IT installation and therefore would have greater knowledge of IT outsourcing. The model was also applied in four major case studies to contribute to the survey and to help in interpreting the survey results. Respondent experiences in making IT outsourcing decisions were discussed. The study found that the 'action' phase of IT outsourcing is the most important decision-making phase. It is largely determined by the track record and the ability of the potential vendor to provide high service levels for the client. The need for an acceptable level of service is also strongly apparent when management evaluates and monitors the outcome of IT outsourcing. In recognition of the importance of the action phase the study presented an expanded model. It shows an expanded representation of the activities, presented in life eyrie form, related to selecting a suitable vendor and entering into an outsourcing contract. The study concluded that the proposed model was sufficiently comprehensive and structured to be a useful guide for IS outsourcing decision making. It enabled decision makers to consider complex, wide ranging and interrelated decision criteria concerning IS outsourcing for their particular circumstances and needs. Knowledge of the above findings should provide the following benefits: *The identification and description of phases, tasks and subtasks provides a checklist of what needs to be taken into account during IT outsourcing decision-making; *The identification of key phases, tasks and sub tasks will help management and others to focus on critical areas that need to be managed well in order for IT outsourcing to be successful; *The identification of the action phase as the most important phase enables management attention to be particularly focussed; *The framework can be used on a 'as needed' basis thereby making it useful for different outsourcing decision scenarios and situations. The study concludes with the research limitations and suggestions for future research.

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