Biased decisions on IT outsourcing: how vendor selection adds value

Abstract

Purpose This paper aims to investigate the unconscious aspects of information technology (IT) outsourcing decisions. Design/methodology/approach The researchers extend the current literature and existing knowledge on the economic aspects of outsourcing decisions in a study on human behaviour and decision-making. Some vulnerabilities related to decision-making on outsourcing have been identified and mechanisms to address these vulnerabilities have been proposed. Findings Although IT outsourcing is a widely accepted practice, the vulnerabilities that result from unconscious bias can outweigh the supposed economic gains. However, with support from research in psychology, it is possible to minimize bias and ensure positive value creation when engaging in outsourcing. Originality/value The authors argue for a multi-disciplinary approach, for decision-making on outsourcing, that integrates the psychological elements of decision-making with economic value-creation logic. The proposed practitioner-oriented approach is used in conjunction with traditional approaches to decision-making. Specifically, it addresses the uncertainties that may occur when interpreting and inferring information that influences outsourcing decisions.