Theoretical Foundations to Information Technology Outsourcing Research in the Public Sector

Information Technology Outsourcing (ITO) practices are widely adopted in the Public Sector. However, research is still needed to better understand critical factors in outsourcing relationships and to improve success rates. This paper constitutes a review of the literature in Information Technology Outsourcing with the goal of exploring the theoretical foundations for ITO Research. We found that, although many different theories have been used in ITO research, six theories dominate the research landscape to explore main influencing factors or determinants of IT outsourcing decisions and outcomes. The theories can be categorized in three main approaches, economic, strategic and relational. In the paper, we describe each theoretical perspective and show evidence of the contribution and limitations of each of these theories on explaining the IT outsourcing phenomenon. Based on the findings of review and the reality of IT outsourcing practice in public sector, we finish the paper with recommendations for future research of ITO in the Public Sector.