Abstract

Information system outsourcing has grown in popularity over recent years with the reasons of cost reduction, new access skill and knowledge and focus on core business. Yet, we know very little about the effectiveness and performance of outsourced systems in an organization. System maintenance effort is often associated with system development practice and maintenance activity plays an important role in overall system lifetime as well as involves a large amount of budget. However, it is also overlooked and often considered as a non-core activity. The purpose of this research is, therefore, to examine the effectiveness of information system sourcing from the perspective of service quality and maintenance efforts. We examine the differences in service quality and maintenance efforts of insourced and outsourced systems to investigate the effects of system sourcing types on system maintenance. According to the empirical field study, we find significant differences in service quality and maintenance efforts between insourced systems and outsourced systems. That is, the user satisfaction and maintenance cost for a system could be different by system sourcing types. This result indicates that an outsourced system could not be always a right selection to reduce cost and increase efficiency as well as suggests an efficient system sourcing option to IS managers from the perspective of maintenance quality and efforts. As providing issues on service quality and maintenance efforts, this research could raise the issues like productivity gains in system maintenance and the cost savings with right sourcing options as well.

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