IT outsourcing configuration: Research into defining and designing outsourcing arrangements

In this paper, we introduce the concept of information technology outsourcing (ITO) configuration', defined as: a high-level description of the set of choices the organization makes in crafting its IT outsourcing portfolio. From research into 49 ITO arrangements studied over time, we identify seven attributes-Scope Grouping, Supplier Grouping, Financial Scale, Duration, Pricing, Resource Ownership, and Commercial Relationship-as key descriptors of an organization's ITO configuration. Seven further cases tested the relevance of the attributes. The contribution of this paper is its articulation of the concept of configuration as a taxonomy of ITO structural characteristics, the key attributes, and demonstration that configuration is an important concept for understanding, comparing, and managing ITO arrangements. In particular, the paper details the rationales for 31 different options in outsourcing, the risks and management issues emerging for each, and how these play out in different combinations in selected, illustrative case studies. (c) 2005 Elsevier B.V. All rights reserved.