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IT stands as one of the most fruitful areas for outsourcing by its operating nature and its history (Lacity & Willcocks, 2001; Lee, Huynh, Kwok, & Pi, 2003; Lacity, Khan, & Yan, 2016). The fact that it is a focus of analysis in several IT management models reflects the criticality of outsourcing (De Haes, Van Grembergen, & Debreceny, 2013; Sahibudin, Sharifi, & Ayat, 2008). Therefore, performance appraisal for IT outsourcing is of great interest to researchers and businesses (Ensslin, Mussi, Chaves, & Demetrio, 2015a, Lacity et al., 2016).
The interest in IT outsourcing has escalated mainly because IT has become more pervasive (Gorla, Somers, & Wong, 2010; Vodanovich, Sundaram, & Myers, 2010) with the digital transformation of business (Westerman, Bonnet, & McAfee, 2014). Alongside this rise in IT, an increasing preoccupation with external IT provisioning occurs in all business models that require integration, stability, and agility in a shifting organizational environment—features associated with IT quality (Ensslin et al., 2015). The wide presence of IT in an organization means that IT outsourcing can have an impact on many aspects of organizational performance and increase the risks inherent in certain types of IT provision.
Bearing in mind the complexity of IT in organizations, the effort required to maintain and update it, customers’ reliance on innovation, and the interdependence of technology and organizational performance, many organizations have outsourced all or some of their IT functions. The improvement of service performance, cost reduction, user satisfaction, and a focus on core business competencies are among the reasons organizations opt for IT outsourcing (International Association of Outsourcing Professionals [IAOP] & Chittenden, 2010; Lacity & Willcocks, 2001; Lee et al., 2003).
However, what at first seems a highly attractive solution for meeting organizational goals comes with risks and challenges. Historically, results do not always confirm organizational expectations regarding IT outsourcing, and in some cases, they contradict expectations (Bahli & Rivard, 2005; Cullen, Seddon, & Willcocks, 2005). The considerable amount of reporting on the undesired consequences of IT outsourcing refers to the need for special care in planning, implementing, and maintaining it, handling each contract uniquely (Aubert, Houde, Patry, & Rivard, 2012; Gonzalez, Gasco, & Llopis, 2006). In this context, the question arises of how best to assess the benefits of IT outsourcing specific IT services.
Studies on IT outsourcing performance appraisal commonly focus on ex-post assessment (i.e., evaluating their effectiveness after outsourcing the service). Ex-ante evaluation studies are fewer and focus more on traditional cost-benefit analysis of outsourcing (Ensslin et al., 2015). In addition, studies deal with the assessment of IT outsourcing performance from perspectives that Roy (1993) characterizes as realistic, reflecting a lack of research in this field that uses the constructivist perspective (Ensslin et al., 2015). Therefore, the current study contributes an ex-ante assessment model focused on identifying the potential for outsourcing an IT service, and the use of a constructivist approach to performance evaluation.