Abstract
Achieving superior performance in IT outsourcing relationships is both a demanding and a rewarding activity. To perform well managers need to understand outsourcing opportunities, critical success factors, company value configuration and maturity for outsourcing, the need for knowledge transfer, and management and control of outsourcing arrangement. Outsourcing opportunities can be derived from resource-based theory, transaction cost theory, activity theory, agency theory, or other theories of the firm. Based on such opportunities, companies develop business-oriented enter strategies. A strategy defines vision, mission and objectives of the firm. It includes changes in electronic business and other important business areas that impact future use of information technology. The strategy analyzes business direction, information management strategy, and ambition level for IT outsourcing. The theoretical and empirical based critical success factors serve as recommendations for what to outsource and how to succeed in managing IT outsourcing relationships. Outsourcing business functions, managers must first understand – the underlying business logic of their firm, the company’s value configuration, and how resources such as information systems affect the performance of various component activities.