Exploring Strategic Innovation in a Business Services Outsourcing Context: Client and Provider Perspectives

Abstract

Business services outsourcing engagements, typically comprising the transfer of information technology and other supporting business functions, are traditionally leveraged for cost savings. Recently, there has been a shift in demands towards strategic innovations that may substantially improve a client’s competitive position. Two research questions are addressed: (1) How has existing research conceptualised the strategic innovation through outsourcing process and how have reference theories been applied?, and (2) how can high degrees of organisational readiness be created for strategic innovation initiatives in outsourcing from a (a) client perspective and (b) provider perspective? A conceptual study in form of a theoretical literature review is developed to respond to the first research question. The fragmented research landscape is consolidated by capturing insights from 95 papers, published between 1998 and 2020. Thematic analysis findings are integrated in a four-phase framework. Based on the review, the gap tied to the second research question is carved out. Specifically, virtually no research has yet explored the formation of organisational readiness for strategic innovation initiatives in an outsourcing context. Responding to the second research question requires the exploration of notable factors in the outsourcing project, organisational and market environment, that influence the readiness of organisational members to support the implementation of strategic innovation initiatives. Two qualitative case studies are conducted, one involving a care hospital, the other involving a service provider. Organisational change readiness theory is used as theoretical lens. A framework is developed that accommodates identified readiness-influencing factors. Findings further indicate that readiness levels evolve and may decline during an initiative’s implementation due to unforeseen disturbances. Corrective measures are then required. This thesis offers two major contributions to the Information Systems sourcing research stream, namely a comprehensive theoretical review of existing innovation through outsourcing literature, and the identification of readiness-influencing factors from a client and provider perspective.