An integrative model of information processing and contextual factors on exploring information systems outsourcing success

Information Systems (IS) outsourcing contracts often fail to deliver the planned business benefits. One major reason is that organizations have poor understanding of outsourcing. This study examined IS outsourcing success by integrating Information Processing Theory with four contextual factors (three organizational readiness factors: IT skills readiness, financial readiness and technology readiness, and one moderator factor: environmental dynamism). We collected 216 questionnaires to validate the proposed hypotheses. The statistical analysis revealed three findings. First, the fit between task uncertainty and organizational structural mechanism was significantly related to IS outsourcing success. Second, the negative moderating power of environmental dynamism on the relationship of IS outsourcing success with the fit between task uncertainty and organizational structural mechanism was significant. Finally, the three organizational readiness factors were significantly related to IS outsourcing success. This study provided new insights on the future development of Information Processing Theory and the improvement of IS outsourcing project performance.