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Enterprise Systems Outsourcing “Behind the Curtain”: A Case Study Showing How Rational and Institutional Explanations Coexist and Complement Each Other
Abstract
Outsourcing is now a feasible means for enterprise systems (ES) cost savings, but does however increase the complexity of coordination substantially when many organizations are involved. We set out to study ES outsourcing in a large Scandinavian high-tech organization, SCANDI, a case setting with many inter-organizational partners, trying to answer the question: Why does SCANDI engage in these very complex outsourcing arrangements? To answer this question we have analyzed documents, observed meetings and gathered data from interviews in four parts of SCANDI. The first data analysis found just the rational front stage cost-saving explanation; but then, with a more careful analysis focusing on institutional factors, other backstage explanations “behind the curtain” were uncovered, such as management consultants with a “best practice” agenda, people promoting outsourcing, thereby being promoted themselves, and a belief in outsourcing as a “silver bullet”: a recipe to success, solving everything
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