MIS Quarterly Executive


When making Information Technology (IT) outsourcing decisions, organizations must decide what to outsource and what to keep in-house. A robust stream of research describes which Information Systems (IS) human resource capabilities are core to exploiting IT successfully. Our core IS capabilities framework, for example, presents nine capabilities: leadership, informed buying, business systems thinking, relationship building, contract facilitation, architecture planning and design, vendor development, contract monitoring, and making technology work.In this article, we focus on how these core IS capabilities can be evolved over time to leverage the external IT services market.We have found that senior executives use three organizational mechanisms to evolve capabilities: process, culture, and structure. We describe how three organizations have used these mechanisms to evolve the nine capabilities in our framework. In two cases, the organizations signed large outsourcing agreements only to discover, down the road, that they lacked the IS capabilities to leverage their agreements. In short, they had to play catch-up. In the third case, IS bolstered its core IS capabilities in preparation for selective outsourcing.We see four factors in successfully evolving core IS capabilities: (1) leverage the three mechanisms to develop IS capabilities, (2) prioritize development of core IS capabilities, (3) outsource lower-risk services while developing core IS capabilities, and (4) to catch up, keep the end goal in mind while evolving the core IS capabilities.