Accounting Executives and it Outsourcing Recommendations: An Experimental Study of the Effect of CIO Skills and Institutional Isomorphism

Abstract

Although substantial effort has been devoted to understanding how cost issues drive Information Technology outsourcing (ITO), several researchers have proposed that this narrow focus ignores the role of more subtle factors. This paper addresses this concern by investigating internal and external influences on accounting executives' recommendations to outsource the IT infrastructure. Using resource-based and institutional theories, we hypothesize that when the chief information officer's (CIO's) skills are strong, accounting executives will more likely advise against outsourcing. But when the skills are weak, accountants are more likely to mimic the outsourcing actions of industry peers. Our findings support this expectation. These results should interest IS, accounting, and general management scholars. Strategic IT choices are a collegial decision which include contributions from multiple members of the top management team. Senior accounting executives are routinely involved in such evaluations, providing initial projections and monitoring the consequent progress. In addition, recent US regulations have made accounting executives personally responsible for the effectiveness of internal controls, including those over the IT infrastructure. The accounting executives' recommendations on ITO in this context often becomes decisive, and factors behind this recommendation should be fully explored.

Determinant Factors of Cloud-Sourcing Decisions: Reflecting on the IT Outsourcing Literature in the Era of Cloud Computing

“…Instead, the opinions of third parties seem to inform in the IT user companies' process of building their own attitude about SaaS'. This argument is consistent with the nonsignificant results of Blaskovich and Mintchik (2010), who find a significantly positive influence of mimetic pressures on cloudsourcing decisions only when CIO skills are weak. Considering the high level of uncertainty within the CC environment, mimicking organizations that are perceived to be more legitimate or successful is a response to uncertainty (DiMaggio and Powell, 1983).…”

“…We summarize the empirical academic literature on CC and ITO by coding determinant factors that are used to explain IT sourcing decisions, compare findings on CC and ITO, and derive a set of determinant factors of cloud-sourcing decisions for future research. (Ang and Cummings, 1997) ITO Macro/firm level Quantitative (Ang and Straub, 1998) ITO Macro/firm level Quantitative (Apte et al, 1997) ITO Macro/firm level Quantitative (Asatiani et al, 2014) SaaS Macro/firm level Quantitative (Aubert et al, 1996) ITO Macro/firm level Qualitative (Aubert et al, 2004) ITO Macro/firm level Quantitative (Aubert et al, 2008) ITO Macro/firm level Quantitative (Aubert et al, 2012) ITO Macro/firm level Quantitative (Baldwin et al, 2001) ITO Macro/firm level Qualitative (Benlian et al, 2009) SaaS Micro/Macro Quantitative (Benlian, 2009) SaaS Macro/firm level Quantitative (Benlian and Hess, 2011) SaaS Macro/firm level Quantitative (Berg and Stylianou, 2009) ITO Macro/firm level Quantitative (Blaskovich and Mintchik, 2010) SaaS Micro/individual level Quantitative (Borgman et al, 2013) Cloud Macro/firm level Qualitative (Brcar and Bukovec, 2013) ITO Macro/firm level Quantitative (Brender and Markov, 2013) Cloud Macro/firm level Qualitative (Clark et al, 1995) ITO Macro/firm level Qualitative (Collins and Millen, 1995) ITO Macro/firm level Quantitative (Currie et al, 2004) ASP Macro/firm level Quantitative (Daylami et al, 2005) ASP Macro/firm level Quantitative (Dhar and Balakrishnan, 2006) ITO Macro/firm level Qualitative (Diana, 2009) ITO Macro/firm level Quantitative (Dias Ferreira and Barbin Laurindo, 2009) ITO Macro/firm level Quantitative (Dibbern et al, 2003) ITO Micro/Macro Qualitative (Dibbern and Heinzl, 2009) ITO Macro/firm level Quantitative (Dibbern et al, 2012) ITO Macro/firm level Quantitative (Ekanayaka et al, 2003) ASP Macro/firm level Qualitative (Espino-Rodríguez and Gil-Padilla, 2005) ITO Macro/firm level Quantitative (Fiedler et al, 2013) ITO Macro/firm level Quantitative…”

“…CIO skills: The decision maker's perception of the skills of the organization's CIO (Blaskovich and Mintchik, 2010).…”

IT Governance and Firm Performance: Empirical Study From Saudi Arabia

“…The scientific and professional background of the CIO contributes significantly to the success of the company's strategy in adopting IT; it also contributes to the improvement of the company's performance (Blaskovich & Mintchik, 2011;Karanja & Zaveri, 2012). In general, the company needs to have IT experts on the board of directors to help it make decisions about IT efficiently and effectively (Heroux & Fortin, 2017).…”

Exploring the Influence of Executive Management Diversity on IT Governance

“…With their specific educational backgrounds (Karanja & Zaveri, 2012), skills (i.e., the ability to execute IT leadership and successfully deliver strategic IT projects) (Blaskovich & Mintchik, 2011) and managerial capabilities (Heart et al, 2010), IT executives/CIOs can help develop executive management's IT governance knowledge since these managers interact with non-IT executives. This suggests that functional as well as educational diversity is important in building an executive management team with IT governance knowledge.…”