Sustaining IT outsourcing performance during a systemic crisis: A configurational approach

Abstract

The COVID-19 pandemic set off a systemic crisis that spread rapidly across the globe in early 2020, significantly affecting the outsourcing industry. Information Technology (IT) vendors as well as client firms found it challenging to maintain their performance levels. The Information Systems (IS) outsourcing literature, notably, had little insight to offer to client firms about effective IT outsourcing strategies for a systemic crisis. However, the literature did discuss two distinct yet interconnected logics for understanding IT outsourcing performance in non-crisis contexts. Whereas one logic revolves around the possession of strong internal capabilities, the other centers on the externalization of services. Building on this work, we develop a conceptual model to guide a configurational analysis centering on the sustenance of IT outsourcing performance during a systemic crisis. Based on the findings emerging from a fuzzy-set qualitative comparative analysis (fsQCA) of 200 companies across 13 countries, we theorize six organizational logics that client firms can consider to sustain IT outsourcing performance. These logics entail different combinations or configurations of client-firms’ IT outsourcing characteristics and the characteristics of the crisis faced. As systemic crises can engender more or less intense uncertainty, thus affecting the strategic options available to decisions makers, we also use our findings to theorize organizational logics that can enable performance sustenance during low, medium, and high severity crises. We discuss our research’s contributions to the IS outsourcing literature as well as its practical implications.