Reconciling agile frameworks with IT sourcing through an IT sourcing dimensions map and structured decision-making

Abstract

While there is a plethora of literature on IT Sourcing (ITS) strategy, little is known about the impact of large-scale agile frameworks on these strategies. Empirical evidence suggests that application of agile frameworks has an impact on governance and processes in large organisations including ITS strategies. Yet, the effects of such frameworks remain unrevealed. This research investigates the impact of agile frameworks on ITS decisions and the way organisations configure their ITS strategies. The research first studies literature to realise that there is a lack of empirical research on ITS strategies in organisations that use agile frameworks. Then, through a systematic literature review, ten different dimensions of ITS are identified and used as the required construct for a multiple-case study at six Netherlands-based organisations. The results reveal that four dimensions, namely sourcing model, location, pricing model, and relational governance are mostly affected by agile frameworks. Furthermore, after more than three years of utilising agile frameworks, case organisations still have not discovered a proper optimum point for these dimensions. The results also uncover that organisations are not fully aware of the impact of agile transformation on the process of ITS decision-making. This process may remain intact for years, resulting in continuous experimentation and trial and error of ITS strategies. We conclude that organisations should recognise the effects of agile frameworks to make ITS decisions accordingly. Additionally, adhering to a more rational and structured decision-making process helps organisations to more efficiently find proper optimum points for the dimensions of ITS strategy.

Formal and relational governance of artificial intelligence outsourcing

“…Our results indicate that various types of pricing mechanisms are applied in practice, which are consistent with previous IS governance studies (Oshri et al 2015;Amiri et al 2021). Interestingly, we found two technology suppliers who provide outcomebased contracts by using a bonus/malus pricing mechanism.…”

“…The decision to include dissimilar resources in the client-supplier relationship increases collaboration and contributes to shared value creation, a view that is supported by Vitasek and Manrodt (2012). Our findings on outcome-based pricing models go beyond a recent study of Amiri et al (2021) who find that pricing models in the context of IS sourcing arrangements are predominantly based on times and materials and fixed price. The role of an active client involved in co-developing AI services may explain our findings.…”