An agile framework for an information technology outsourcing decision process (ITODP)

This study is dedicated to answering the question, can the Information Technology Outsourcing (ITO) decision process be improved. It develops a framework called the Information Technology Outsourcing Decision Process (ITODP) that will efficiently and effectively fast-track the outsourcing decision process. Information Technology Outsourcing (ITO) has generated considerable research interest from its beginnings with the nascent outsource award of Blue Cross of Pennsylvania\u27s Information Technology functions to Electronic Data Systems (EDS) in 1963 to the historic Eastman Kodak deal of 1989 to the present[65]. As stated by Keen and Benko, about one-half of U.S. corporate capital is being invested in Information Technology (IT) [104] with IT representing the third largest corporate expense [27]. The IT function has become a prime target for outsourcing. In today\u27s competitive world, companies are attempting to focus on core competencies. Many are considering outsourcing various aspects of their inhouse operations. The driving forces behind these decisions are typically: cost reduction, improved service, value added and organizational restructuring. The idea of a framework for outsourcing decisions is not new. In their seminal work, King and Malhotra developed a framework for the consideration of internal markets as an alternative to information technology outsourcing. It was based on an assessment of the pros and cons of both outsourcing and in-sourcing [108]. Pandey and Bansel, utilized Saaty\u27s Analytical Hierarchy Process for a decision-making framework to choose activities to outsource and another to choose the appropriate outsourcing methodology [158]. In this work, the primary hypothesis is in a prolonged outsourcing decision process, there are negative effects on the corporation. Support for the hypothesis was developed using an extensive literature review; interviews with industry experts; a survey instrument and case study analysis. The primary research was to identify an efficient and effective method to improve the ITO decision process. This decision framework was built utilizing agile processes, akin to the agile systems development processes which were brought to prominence by Kent Beck [23] Alistair Cockburn [45] and James Highsmith [94]. These methods were applied in an agile process that was used to analyze the major components that are the basis of an outsourcing decision. A conceptual model was created and simulated using members of the original team from the case study. The results of the agile model simulation were compared to the results of the non-agile traditional method contrasting the agile framework to that of the case study to illustrate its benefits. Key words. agile systems development, scrum, eXtreme Programming (XP), information technology outsourcing (ITO), decision-making, waterfall systems development, framework, outsourcing