IT Enabled Strategic Outsourcing: Knowledge Intensive Firms, Information Work and the Extended Organizational Form

In the early 1900s, the Ford Motor Company would not have known what a T1 line was. If somebody had suggested to the senior managers at Ford that a T1 line would one day have something to do with who would manufacture the tires on Ford’s cars, they would have been shown the door – for this was a time when the Ford Motor Company bought a rubber plantation in order to control the production of tires for its cars. Before the century ended, T1 lines not only determined who manufactured Ford’s tires but also when and how frequently Ford was kept supplied by its partners. Contract manufacturing is a mature business model that has been deployed by many firms that face long and complex supply chains. IT outsourcing began with the outsourcing of data centers and data processing and has since grown to include the outsourcing of application development, data scrubbing and off site archiving. The most recent wave of outsourcing, one that is beginning to impact the nature of the modern firm itself, is the outsourcing of tasks that were once thought to lie at the core of the firm – the business processes.