Playing “Catch-Up” with Core IS Capabilities: The Secrets of Success

When making Information Technology (IT) outsourcing decisions, organizations are faced with not only the decision of what to outsource, but also what to keep in-house. A robust stream of research has developed to provide guidelines on what Information Systems (IS) human resource capabilities are core to the business’s future capacity to exploit IT successfully. Here we make the crucial step of detailing how these IS capabilities can be evolved over time. We examine three organizations that used the same framework to develop their internal IS capabilities. Two already had large infrastructure and applications outsourcing deals in place; the third was preparing itself to be in a position leverage outsourcing in the future. Several learnings emerge: 1) Organizations are invariably playing “catchup” on IS capabilities. Business contexts move too fast for it to be otherwise. But creative and flexible management using ideas from experience can speed the evolution of capabilities and produce superior business results 2) Process, culture and structure mechanisms can be used to develop, nurture, and maintain these capabilities; 3) Internal IS capabilities can be developed through plotting the “where is” on three stages of evolution and moving the organization forward; and 4) The state of IS and organizational context determine how and when to use the external IT services market.