Sourcing Theories

Abstract

In Chapter I, general theories of the firm and value configurations of firms were introduced. Here we return to more theories. While theories and value configurations in Chapter I were introduced to develop e-business strategy, more theories are introduced here to understand the specifics of sourcing in general and outsourcing in particular. We want to understand why companies choose IT outsourcing in the middle of the Y model. We know that many companies choose IT outsourcing based on an analysis of core competencies. As we shall see, there are, however, many other theories that can be applied and that may provide both convergent and divergent answers to an outsourcing question. An example of divergent answer would be the theory of core competencies suggesting that non-core IT can be outsourced, while the resource-based theory suggests that non-core IT should be kept in-house if we have strategic IT-resources (valuable, non-imitable, non-substitutable, non-transferable, combinable, exploitable and available).