A study of information technology outsourcing practices

M.Comm. (Computer Auditing)It is undeniable that over the last couple of years information technology outsourcing has witnessed considerable success and growth in South Africa and the world at large. However, there have been a number of IT outsourcing failures as evidenced by the substantial number of organizations that outsourced their IT systems and then moved them back in-house, or outsourced to another service provider. This is proof that some of the practices inherent in IT outsourcing are flawed. In order to find out why IT outsourcing was failing in South Africa, the study investigated the current practices in IT outsourcing against the best practices. A comprehensive literature study on IT outsourcing best practices and an empirical study on outsourcing organizations employing the services of top IT outsourcing service providers in South Africa was done. The research study revealed strong evidence that organizations are experimenting with different types of IT outsourcing that consequently have different benefits and risks. The empirical findings also proved that there was no ‘one size fits all’ when it came to the reasons for justifying outsourcing IT by organizations. It was also clear that no organization would openly admit to having hidden agendas that informed why and how they outsourced their IT. The study also found strong evidence of critical success factors that are significant and are embraced by IT outsourcing organizations. Also revealed, there were control considerations in IT outsourcing that showed strong evidence of applicable risks and the governance mechanisms employed