An examination of the trade-off between internal and external IT capabilities
The Journal of Strategic Information Systems
International Journal of Operations Research and Information Systems
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A 78 organization study in USA, Europe and Australasia throughout 1999–2001 finds a variety of practices in sourcing the development and running of technology and e-businesses in value networks. The paper points to trade-offs in e-sourcing decisions, not least between speed to the net, cost, and organizational learning. Leading and lagging practices are identified and the evolutionary paths organizations take are described and assessed. Outsourcing emerges as highly useful for specific purposes, but other ways of using the external market for e-business development can be more suitable for certain identifable activities. The paper further discusses how external sourcing and partnering practices are increasingly being extended into the customer resource life-cycle, into supply chains and throughout value networks. Case examples are discussed and the strengths and weaknesses of their practices identified. The need to clarify core capabilities is demonstrated, and two matrices that facilitate effective e-sourcing decisions are developed to summarize the findings from the research.