Information Technology Outsourcing and the Bottom Line
Outsourcing of information technology has substantially increased in the last two decades but doubts about the business success of such arrangements persist. This paper examines whether a difference in business performance can be determined between firms that outsourced information technology in a given period and those that did not. We compare four performance key figures before and after outsourcing. The data cover deals executed in Germany from 2000 to 2006 and key figures from 1997 to 2008. The results show that a significant difference can be observed for only two out of four key measures. However, while the cost savings of firms that outsourced information technology are not impressive compared to other firms on average, they often show a superior financial performance indicating that they seem to enjoy strategic benefits from the move.