Outsourcing Maintenance Operations to Off-Shore Vendors

Ever since Eastman Kodak announced that it was outsourcing its information systems (IS) function in 1988 to IBM, DEC and Businessland, large companies have found it acceptable to transfer their IS assets, leases and staff to third party vendors. In the recent past, there is a trend towards selective sourcing in which organizations opt to use third party vendors for certain IS functions which represent 20-60% of the IS budget while still retaining a substantial internal IS department. This paper reports on issues involved in selective sourcing of maintenance operations. In particular, it addresses the issues involved in performance of maintenance services from an off-shore location. These issues are organized using a framework developed based on the knowledge gained from prior research in IS implementation and Socio- Technical approach to studying organizations. A number of lessons that we learned from the X-OIL - OCS case study are also presented.