A Framework for Enabling Service Configuration Decisions: The Case of IT Outsourcing Providers

Abstract

Outsourcing has received extensive attention over the last several years, as a key business trend enabled by businesses’ financial pressures, advancements in information technology, and new organizational orientations. Information Technology (IT) outsourcing, in particular, has emerged as a vital option for cost control for many organizations that cannot afford the required resources and capabilities for managing IT platforms in-house. Hence, a successful IT outsourcing provider is one that can organize its resources/capabilities into tailored service configurations that are valuable to its clients. By combining basic principles of Service Science, Resource-based Theory and Dynamic Capabilities Theory, we developed a conceptual framework for classifying IT outsourcing configurations (i.e. service offerings) in order to help IT outsourcing service providers make informed decisions about which capabilities to develop or improve upon, for different client needs, which inevitably results in different value creation processes. The framework is presented as a 2x2 classification matrix of outsourcing configurations, along with details for one of these, by using the e3-value ontology. We conclude this paper by discussing a practical application of our approach and briefly describing our future research directions.