The Israeli CIO’s journey – From insourcing to outsourcing and back

ABSTRACT

One of the difficult decisions that a Chief of Information Manager takes is whether to use organisational resources or to contract suppliers, in order to perform information technology (IT) projects. Over the last decade, managers in Israel have moved from insourcing to outsourcing due to different reasons, mainly to reduce costs and focus on their core business. In the last two years, they started to return IT projects, services, and activities back, using new source models. This study examines the tendency of the Israeli IT managers in sourcing decisions in order to understand the problems, application and suitability of various kinds of models.

KEYWORDS:

• Israel
• outsourcing
• insourcing
• co-sourcing
• backsourcing
• offshore
• information technology (IT)
• cloud computing
• facility management

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Coase, “The Nature of the Firm,” 386–405; Williamson, Markets and Hierarchies, 26–30; and Williamson, “Outsourcing: Transaction Cost,” 5–16.

2. Lacity et al., “IT Outsourcing: Maximize Flexibility,” 84–93; and Lacity et al., “A Review of the IT,” 130–46.

3. Busi and McIvor, “Setting the Outsourcing,” 185–197.

4. Kaganer et al., “Managing the Human Cloud,” 23–32; and Willcocks et al., “Cloud Sourcing and Innovation,” 184–202.

5. Bardhan et al., “The New Wave of Outsourcing,” 1–12.

6. Willcocks et al., “Co-Operative Partnership,” 67.

7. Barthélemy and Geyer, “The Determinants of Total IT,” 91–97.

8. Ibid.

9. Kaiser et al., “Evolution of Offshore Software,” 69–81.

10. Zuckerman, The Offshoring of American, 166–201.

11. Algazi, “Matrix in Bil’in,” 173–191.

12. Apak et al., “Strategic Dimension of Outsourcing,” 788.

13. Deloitte’s 2016 Global Outsourcing Survey, May 2016; Drauz, “Re-Insourcing as a Manufacturing,” 346–353; Sharma and Loh, “Emerging Trends in Sourcing,” 149–165; Kremic et al. “Outsourcing Decision Support,” 467–482, Barthélemy and Geyer, “IT Outsourcing,” 195–202; Lonsdale and Cox, The Historical Development of Outsourcing,” 444–450; and Greaver, “Strategic Outsourcing,” 4.

14. Deloitte’s 2016 Global Outsourcing Survey, May 2016; McIvor, “How the Transaction Cost,” 45–50; Kakabadse and Kakabadse, “Trends in Outsourcing,” 190–191; Arnold, “New Dimensions of Outsourcing,” 23–29; and Lonsdale and Cox, “The Historical Development of Outsourcing,” 444–450.

15. Deloitte’s 2016 Global Outsourcing Survey, May 2016.

16. Deloitte’s 2016 Global Outsourcing Survey, May 2016; Drauz, “Re-Insourcing as a Manufacturing,” 346–353; Moe et al., “From Offshore Outsourcing,” 1230–1231; Kakabadse and Kakabadse, “Application Service Providers,” 205–210; McFarlan and Nolan, “How to Manage an IT,” 9; and Quinn and Hilmer, “Strategic outsourcing,” 43.

17. Claver et al., “Information Systems Outsourcing,” 294–308; and Kremic et al., “Outsourcing Decision Support,” 469.

18. Barthelemy, “The Seven Deadly Sins,” 87–88; Kremic et al., Outsourcing Decision Support,” 469; Claver et al., “Information Systems Outsourcing,” 294–308; and Kremic et al., “Outsourcing Decision Support,” 469.

19. See note 17.

20. Lonsdale and Cox, “The Historical Development of Outsourcing,” 444–450.

21. Wong and Jaya, “Drivers of IT Backsourcing,” 102.

22. Barney et al., “The Morning After,” 637.

23. Hirschheim and Lacity, “Four Stories of Information Systems,” 305.

24. Drauz, “Re-Insourcing as a Manufacturing,” 346-353.

25. Drauz, “Re-Insourcing as a Manufacturing,” 346–353; Hoecht and Trott, Innovation Risks of Strategic,” 672–677; Kakabades and Kakabades, “Trends in Outsourcing,” 190–191; Lonsdale and Cox, “The Historical Development of Outsourcing,” 444–450.

26. Bergin et al., “Volatility Due to Offshoring,” 163–167, Drauz, “Re-Insourcing as a Manufacturing,” 346–353; Jennings (2002), and Kremic et al., “Outsourcing Decision Support,” 467–482.

27. Richardson, “Vertical Integration and Rapid,” 402; Hirschheim and Sabherwal, “Detours in the Path Toward Strategic,” 87–90.

28. Whitten and Leidner, “Bringing IT back,” 605–606.

29. Falaleeva, “Antecedents of IS Backsourcing,“ 3297–3298.

30. McLaughin and Peppard, IT Back in House, Fourteenth European Conference on Information Systems, ECIS. 2006.

31. Bigley and Wiersema, “New CEOs and Corporate,” 707–708; Child, “Strategic Choice in the Analysis,” 43–45.

32. Lacity et al., “Realizing Outsourcing Expectations,” 7–9.

33. See note 21.

34. Williamson, “Markets and Hierarchies,” 26–30; and Williamson, “Outsourcing: Transaction Cost,” 5–16.

35. See note 22.

36. Gorla and Somers, “The Impact of IT Outsourcing,” 320.

37. See note 34.

Additional information

Notes on contributors

Tal Aspir

Tal Aspir is Lecturer in the Information Systems B.Sc. programme at the Academic College of Tel Aviv-Yaffo, Israel.

Ruti Gafni

Ruti Gafni is Head of the Information Systems B.Sc. programme at the Academic College of Tel Aviv-Yaffo, Israel.

Galit Gordoni

Galit Gordoni is Lecturer in the Information Systems Programme at the Academic College of Tel Aviv-Yaffo, Israel.