INFORMATION-SYSTEMS OUTSOURCING - ISSUES AND EVIDENCE

According to the popular press, outsourcing is becoming pervasive in t he marketplace. The primary philosophical question 'whether outsourcin g is specific to information systems functions or is it as widespread as being publicized' remains unanswered. Are we reliving the 'hollowed out' corporation or is it just another fad that will pass away? Is th ere any proof that corporations are becoming 'virtual' that is, one or a few managers forming a company and outsourcing almost everything to outside companies. This paper looks at the potential risks and benefi t of outsourcing and presents some statistics on outsourcing. It then lists the research issues covered in the literature, followed by a con tent analysis of the annual reports of 31 companies (25 clients and si x vendors). It attempts to determine the perceived value of the outsou rcing activity based on how the outsourcing information is communicate d to the shareholders. Finally, the paper discusses the relationship ( or lack thereof) between productivity and outsourcing.