outsource - IT OUTSOURCING IT OUTSOURCING AND CORE IS...

49
I N F O R M A T I O N S Y S T E M S M A N A G E M E N T
W I N T E R 2 0 0 6
IT OUTSOURCING AND
CORE IS CAPABILITIES:
CHALLENGES AND
LESSONS AT DUPONT
Leslie P. Willcocks and David Feeny
This article explores the following question: For firms that have outsourced major portions of
their IT functions, what core IS capabilities do they need to retain and nurture, or create and
develop, to ensure a strong IS capability over time? The challenges and lessons learned from
implementing major IT outsourcing arrangements from 1997 to 2004 at Dupont are used to
reexamine a previously published IS capabilities framework by the authors.
HE RESOURCE-BASED PERSPECTIVE ON
achieving competitive advantage now
has a considerable pedigree, and several
studies have applied this perspective to
the contribution information technologies (IT)
can make to achieving competitive advantage.
Notable research has also been conducted in
the area of establishing core capabilities within
the IT organization (e.g., Ross et al., 1996;
Bharadwaj et al., 1996). Feeny and Ross (2000)
bring this work together by positing an evolu-
tion of the CIO role depending on the maturity
of the IT function and the business in their
joint abilities to exploit IT.
In allied studies over the past decade, re-
searchers have pointed also to the importance
of the ability to manage external IT supply, par-
ticularly given the expanding and changing na-
ture of the IT services market (Lacity and
Willcocks, 2000, 2001). In particular, detailed
case research into major IT outsourcing ar-
rangements has found the relationship dimen-
sion between the client and its suppliers to be
a critical but complex set of issues to manage
(Kern and Willcocks, 2001).
The purpose of this study is to revisit the
relevance and efficacy of, and challenges posed
by, our own core IS capabilities framework
published some seven years ago. Two research
questions guided the present study:
Does the model still hold or does it require re-
vision?
What challenges and learning arise from imple-
menting the framework?
REVISITING THE FEENY/WILLCOCKS
(1998) FRAMEWORK
We define a capability as a distinctive set of hu-
man resource–based skills, orientations, atti-
tudes, motivations, and behaviors that have the
potential, in suitable contexts, to contribute to
achieving specific activities and influencing
business performance.
A core IS capability is a capability needed
to facilitate the exploitation of IT, measurable
in terms of IT activities supported, and result-
ing business performance.
The nine IS core capabilities proposed in
the original framework published in 1998 are
shown in Figure 1. A brief sketch of the original
framework is in order. It arose from field inter-
view research into 53 high performers in the IT
T
LESLIE P.
WILLCOCKS is a
professor in the
Information Systems
Department at the
London School of
Economics, U.K.,
recently moving from
Warwick University.