The Sourcing of Application Software Services

Book excerpt: The field of Information Systems (IS) outsourcing has drawn considerable attention among scientists and practitioners for the past fifteen years. The present book analyses why organizations insource or outsource IS functions - - specifically the development and maintenance of software applications. Concepts from transaction cost theory, resource-based theory, incomplete contracts theory, the theory of planned behaviour, and cross-cultural research are integrated into a coherent framework that recognizes the economic, strategic, and social dimension of the IS sourcing decision. This framework is specified in a research model and empirically tested across countries (Germany versus USA), industries (Machinery versus Finance) and IS functions (Application Software Development versus Maintenance) using the partial least squares (PLS) approach of structural equation modelling. The book thereby provides theoretically and empirically grounded insights into the reasons and implications of the IS sourcing decision.