The Determinants of Total it Outsourcing: An Empirical Investigation of French and German Firms

An increasingly large number of firms outsource their Information Technology (IT) to outside vendors. Firms that contemplate IT outsourcing have two alternatives: (1) outsource part of their IT activity (i.e., “selective outsourcing”) or (2) outsource their entire IT activity (i.e., “total outsourcing”). It has been repeatedly reported that total IT outsourcing efforts have far lower success rates than selective ones. Using primary data collected both in France and Germany, we investigate the reasons why some firms engage in this apparently sub-optimal practice.

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