Transaction cost economics and industry maturity in it outsourcing: A meta-analysis of contract type choice

Konrad Dongus, Philip Yetton, Michael Schermann, Helmut Krcmar

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

4 Scopus citations

Abstract

Recent reviews of the information technology outsourcing (ITO) literature report high variance in research results when Transaction Cost Economics (TCE) is used as the analytical framework. Informed by ITO market developments, including increasing commoditisation, market consolidation, and market transparency, we develop an explanation for these mixed results contingent on ITO industry maturity. We adopt meta-analysis to show that ITO industry maturity significantly explains variance in the choice of contract type (time and materials vs. fixed price) in ITO projects. Our results suggest that TCE is relevant to explain the choice of contract type in the emerging phase of the ITO industry, but not in its current mature phase. We conclude that a TCE-based analytical framework is not well suited for the study of ITO in the current mature industry phase. Instead, we propose that an "endogenous" ITO theory should be developed that focuses on differences in client behaviour rather than vendor behaviour.

Original languageEnglish
Title of host publicationECIS 2014 Proceedings - 22nd European Conference on Information Systems
PublisherAssociation for Information Systems
ISBN (Print)9780991556700
StatePublished - 2014
Event22nd European Conference on Information Systems, ECIS 2014 - Tel Aviv, Israel
Duration: 9 Jun 201411 Jun 2014

Publication series

NameECIS 2014 Proceedings - 22nd European Conference on Information Systems

Conference

Conference22nd European Conference on Information Systems, ECIS 2014
Country/TerritoryIsrael
CityTel Aviv
Period9/06/1411/06/14

Keywords

  • Contract type
  • IT outsourcing
  • Industry maturity
  • Meta-analysis
  • Transaction cost economics

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