Information technology outsourcing in the service economy: Client maturity and knowledge/power asymmetries

Abstract

The service economy calls for a new, interdisciplinary methodology for defining and valuing information technology services outsourcing needs. Parameters such as ill-informed provider selection and poor contract management have hitherto dominated the IT consulting literature, yet have offered inadequate explanations to the high failure rates in global outsourcing arrangements. This paper takes a different approach in examining the causes of the problem; we discuss the knowledge and power asymmetries that appear to prevent both parties from realizing potential benefits in the market. The concept of self-knowledge as opposed to relationship management is suggested. We posit that knowledge/power asymmetries can be better comprehended when the two parties are considered as interacting entities that influence each other in a dynamic way. Under this spectrum, we discuss the value of a client-focused maturity assessment in realizing potential outsourcing benefits. © 2008 International Federation for Information Processing.