Information and Management
A transaction cost model of IT outsourcing
Information and Management
The impact of IS sourcing type on service quality and maintenance efforts
Information and Management
Information systems outsourcing: a literature analysis
Information and Management
A study of factors that affect user intentions toward email service switching
Information and Management
Analyzing the impact of a firm's capability on outsourcing success: A process perspective
Information and Management
Opportunities and risks of software-as-a-service: Findings from a survey of IT executives
Decision Support Systems
Client strategies in vendor transition: A threat balancing perspective
The Journal of Strategic Information Systems
Impact of information systems outsourcing: a study of Indian banking sector
International Journal of Business Information Systems
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IT outsourcing contracts are often discontinued in favor of other alternatives (returning to in-house development, or switching to another vendor). Switching costs are experienced when terminating a business relationship and securing an alternative. We tried to answer the question: do switching costs matter significantly in the strategic choice to continue outsourcing, switch vendors, or backsource? Switching costs were considered, such as those due to IT operations (sunk investment, lost performance, system upgrades, uncertainty, and induction-retraining-performance), personnel-replacement costs (candidate search, and IT/setup), and in-house learning (cognitive/behavioral learning). A field survey was conducted, and, for each of these cost types, the differences between group means across the three groups (outsourcing continuation, vendor switching, and backsourcing) were determined. The findings suggested that customer organizations preferred outsourcing continuation most and backsourcing least when their switching costs were high. However, the relative preference for vendor switching depended on the switching cost type.