IT outsourcing success: revisiting the measurement of a multi-dimensional construct: an Australian perspective

Abstract

This paper examines the applicability of three dimensions of IT outsourcing success (Strategic benefits, Economic benefits, Technological Benefits) which have been identified in existing literature, in the Australian context. While a number of studies have identified that IT outsourcing success is a multi-dimensional construct most of the studies have been based in the US and South Korea. Furthermore most of the previous studies have not reported on the multidimensionality of IT outsourcing success in their findings rather reporting of IT outsourcing success as a summated scale. We believe that evaluating and confirming the measurement of IT outsourcing success in Australian context adds to the body of knowledge. Our analysis identified two completing factor models and significant evidence of crossloading in the two factor and three factor models examined. The results of the analysis show that the three dimensions of IT outsourcing success maybe mixed measures and the technological benefits may actually be interpreted by respondents as a strategic benefit or an economic benefit depending on individual circumstances. However our results overall do provide stronger support for the three factor model when the factor selection was driven by priori theory. Our results also show the degree of unpredictability inherent when using inferential multivariate statistical techniques such as factor analysis. Therefore we believe our work provides a strong argument for testing and confirming measurement models such as IT outsourcing success in a variety of contexts over time to truly confirm the reliability and validity of IS models and theory.