Understanding Outsourcing of Web-Based Applications in Organizations: The Case of E-Insurance

This article has investigated the insurance industry and provided insights into the relationships of organizational size and age with outsourcing and organizational structure. Also, this study investigated the relationship between Web site age, outsourcing, and organizational structure. The main findings are that firm size and maturity is related to the decision of Web-based development approach and the best organizational structure to support online activity. The insights obtained by a new variable: Web site age suggests that insurance companies are trying to develop their Web-based activities within their existing organizational structures, rather than creating new e-commerce divisions. INTRODUCTION Electronic commerce (e-commerce) is now considered to be a very important component of a business strategy for sales and customer service. An online presence increases a firm’s credibility if the Web site is able to communicate and deliver the message and services that the firm wants to convey to its online audience (D’Angelo & Little, 1998). An interesting and successful approach to creating and maintaining the smooth operation of Web-based applications is outsourcing them to firms that are able to provide professional and reliable Web services. The financial industry is perceived the one which can reap significant benefits from offshore outsourcing of their IT services (Schaaf, 2004). By outsourcing their IT-based