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영어

Does IT outsourcing affect operating costs? How does outsourced IT compare with internal IT investments in reducing operating costs? Some of these fundamental questions remain unanswered, despite significant progress in understanding the IT outsourcing phenomenon over the past two decades. Using a panel dataset of 374 U.S. firms from 1999 to 2003, we find that IT outsourcing has a significant negative impact on firm’s non-IT operating expenses, and that this effect is greater than that of internal IT investments. However, this finding does not imply that firms should completely outsource their entire IT function. Firms benefit more in terms of reduction in operating costs if they also maintain higher investments in internal IT, especially IT labor. In other words, firms benefit more from IT outsourcing when they make complementary investments in own internal IT staff. We discuss the implications of these findings for further research and for practice.