Determinants and Success Factors of IT Outsourcing in the Public Sector

Public organizations often turn to the private sector for guidance and best practice examples when faced with technological or organizational change. However, private-sector business practices do not always translate neatly into the government domain. In this study, we analyze data from 82 collaborative projects in the public safety domain to establish whether public-sector IT outsourcing (ITO) practices match practices that researchers have documented in the private sector. In particular, we focus on the ITO decision process components and outcomes that they have identified as challenging for public-sector ITO. Results show that: 1) public organizations adopt ITO due to expertise gaps and cost considerations more than any other factor, 2) capital funding’s availability affects ITO decisions, 3) public-sector organizations outsource complex systems more often, 4) multiple successful ITO configurations exist, and 5) like the private sector, knowledge sharing and the vendor’s involvement in defining requirements represent important factors for whether ITO projects in public organizations succeed. Our descriptive, exploratory study extends previous ITO research by providing a framing for the fragmented literature on ITO in the public sector and laying a foundation for more systematic and theory-based scholarship. Our observations also guide governmental practitioners in their sourcing decisions.