Does Domberger's theory of ‘The Contracting Organization’ explain why organizations outsource IT and the levels of satisfaction achieved?

Peter B Seddon, Sara Cullen and Leslie P Willcocks

European Journal of Information Systems, 2007, vol. 16, issue 3, 237-253

Abstract: This paper contributes an interpretation of Domberger's theory of The Contracting Organization for use in an IT outsourcing context, then presents a preliminary test of the validity of that theory using data from an Australian survey of 235 senior IT managers. Our conclusion is that Domberger's theory appears to be a useful lens for understanding IT outsourcing, and that further research using purpose-collected data is therefore warranted. Phrased differently, Domberger's four types of benefit of contracting – namely Specialization, Market Discipline, Flexibility, and Cost Savings – appear to be a good way of summarizing senior IT managers’ explanations of why their organizations chose to outsource IT. The paper also conducts a preliminary test of the extent to which these four factors explain the purchasing organization's satisfaction with IT outsourcing.

Date: 2007
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DOI: 10.1057/palgrave.ejis.3000664

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