Influential Factors in IT Sourcing Decisions of Norwegian Public Sector: An Exploratory Study

IT outsourcing is considered as one of the major innovations in IT management. Since Kodak outsourced its IT operations and data centers to outside vendors in 1989, IT outsourcing has become commonplace in organizations around the world. Due to the extensive research and practice over the last two decades, organizations have not only developed much better understanding of the benefits, risks, and success factors of IT outsourcing, but also formulated much more complex IT sourcing strategies to reduce the risks and maximize the benefits. However, most of the IT outsourcing literature has focused on for-profit private corporations and less is known about the IT outsourcing practices of non-for-profit public sector organizations. In this study, we attempt to fill this gap by studying the IT sourcing decisions of Norwegian municipalities. The preliminary results show that in addition to the commonly identified factors such as cost savings and managing technical uncertainty, public sector organizations are strongly influenced by their institutional environment, their concerns of local community, the availability and capability of IT vendors, and their unique political and geographic constraints.