ABSTRACT
Abstract: An IT sourcing framework is presented that relies on concepts from the resource-based theory of the firm and from industrial economics. The framework may be used by a group of executives to guide them in deciding among the broad alternatives of outsourcing, insourcing, internal markets, and strategic alliances as sourcing options. The framework requires a team to assess an activity in terms of its criticality (critical success factor) and its core nature (core competence) in two different temporal contexts. Once this has been done, the framework serves to identify a “working option” that is appropriate for the situation and also the inevitable consequences (which are sometimes unrecognized) and the likely issues that will materialize if the working option is selected (which often are unrecognized). By working through this framework, a management group can identify a sourcing option in terms of the most salient criteria, understand the option better and identify costs, issues, and payoffs that may otherwise be difficult to foresee.
