Sourcing Strategies in Information Systems Development

Abstract: Abstract After 20 years of accomplishment Barney discusses in the recent issue of the Journal of Management (JOM, September 2011, 37(4)) the decline or the revitalization of the resource based view (RBV). This thesis gives support for its relevance in the field of sourcing IS- development. Looking into the discipline of IS-sourcing, at first glance it might be seen as a natural part as any other of an organization. However, taking a closer inspection on sourcing in the financial sector we have found that the resources used in IS-development are an important factor for sustained competitive advantage depending on the application of different sourcing modes. Investigating several case organizations from the financial sector we have on the basis of the resource based view analyzed selected IS-sourcing projects and the motive for sourcing as well as if appropriate sourcing strategies are applied. With the starting point from Roy and Aubert’s (2000) research and implications on their treatment of IS-sourcing modes, we challenge their study in a way that we are convinced that it needs to be combined with the VRIO framework. Our empirical results confirm that the VRIO framework sheds insight on the diffusion of finding the applied sourcing mode. While analyzing the empirical findings and using the well- grounded theories with the stake from the resource based view, we have theoretically derived the appropriate IS-sourcing mode for each investigated case. The empirical findings revealed that the IS-sourcing model is implicitly applied in practice. However, the extrapolation from the application of the theoretically derived sourcing mode to the success of the sourcing project needs further evidence. Our discussion of IS-sourcing in the financial sector addresses in fact the importance of seeing IS-sourcing as a resource that includes capabilities of high or low strategic value, for gaining sustained competitive advantage. Metaphorically sourcing of IS-development can be seen as a bag that holds resources which form the competitive advantage. Although IS- sourcing strategies from the RBV perspective may seem of concern to only a small group of interest, it should in fact concern any financial organization that cares about keeping competitive on the market. Regarding the empirical findings, this discovery has relevant applications in Roy and Aubert’s (2000) research and contribute to the resource based view.