Applying the Concept of Modularity to IT Outsourcing: A Financial Services Case

Abstract

Information systems and information technology (IS/IT) services are often outsourced to external vendors for reasons of cost cutting or specialized expertise. Throughout the years, reports about high failure rates regarding IS/IT outsourcing initiatives have been repeatedly published. Therefore, the large variety of mitigating factors proposed in literature did not seem to be sufficient to significantly improve the success rate of these projects. This paper employs the concept of modularity to study the (un)successful execution of IT outsourcing projects. For this end, we present and analyze a single case study conducted at a financial institution in Belgium. It is shown how several modular structures can be identified and analyzed and might provide insight in the (un)successful outcome of IS/IT outsourcing initiatives.