Taxonomy development and assessment of global information technology outsourcing decisions

Abstract

PurposeThis paper seeks to provide taxonomy and assessment methodologies for executives of global conglomerates with a selection of variables which can help them evaluate outsourcing decisions.Design/methodology/approachA range of established theories, which addressed outsourcing decisions, are identified. The major determinants of global outsourcing were then formulated into an integrated model. Each of the variables identified was validated using multiple theories. Finally, a weighted score index was used to demonstrate how the variables can be used to evaluate outsourcing decisions.FindingsIt provides an overview of outsourcing theories about the variety of major reasons and their associated determinants as well as attributes that are relevant to decision‐makers. It showed that the individual theories can be integrated into a global taxonomy. This taxonomy can be assessed using a weighted‐index because the inputs and computation processes contain realistic qualitative and quantitative information.Research limitations/implicationsIt is an assessment methodology that requires input and judgment from a variety of experts. Persons having such expertise may be fairly costly and difficult to find.Practical implicationsA very simple, yet comprehensive, and useful taxonomy for executives making outsourcing decisions. The assessment index is a proven methodology that is used by business consultants for a variety of related applications involving decision choices.Originality/valueThis paper fulfills the need for a more comprehensive view and a systematic approach to the assessment of outsourcing decisions. The index of attributes identified and the evaluation technique proposed are a practical approach.