An Empirical Study of the Impact of IS Sourcing Type on IS Service Capability

The purpose of this paper was to examine the effectiveness of information system sourcing from the perspective of information system service capability. Since system service capability was a difficult variable to be described and examined, the two factors as service quality and maintenance costs were used to evaluate it. Questionnaire was designed, and MANCOVA was used to examine the relationship of variables. We empirically found that there were differences not only in system service quality among in-sourced, outsourced and cooperated systems, but also in maintenance costs. The results suggested that outsourcing may not always be the optimal selection for reducing costs and increasing efficiency over system lifetime. Cooperative type was sometimes good for increasing IS service capability as the system grew older. Companies should consider the characteristics of IS sourcing type and its relationship with service capability, and the difference between TPS and DSS. Perhaps this paper can give some advice on which sourcing type should be selected based on system service capability