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Outsourced information systems failures in SMEs: a multiple case study

Jan Devos (UGent) , Hendrik Van Landeghem (UGent) and Dirk Deschoolmeester (UGent)
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Organization
Abstract
Since the 1980s, a number of frameworks have been proposed for understanding the concept of information system (IS) failure. Two approaches to IS failures seem particularly important: the concept of Expectation Failure and the concept of Termination Failure. We argue that there is an extra dimension to the problem that is not covered by those descriptive models, which we call the Outsourced IS Failure (OISF). To explain the OISF we draw on agency theory, which views the problems that occur in outsourced environments as the results of three factors: goal differences, risk behaviour differences and information asymmetry. Although the (positivistic) agency theory has already been used to describe phenomena of failure in IT relations there is still a lack of empirical evidence. This paper brings the results of the attempts of falsification of the agency theory in situations of OISF. A positivistic case study research was conducted based on multiple cases in SMEs. The choice for qualitative research is based on the accessibility of well documented secondary data in litigation files of failed IS projects. Eight cases of IS project failures subject to litigation were selected. We conclude that the agency theory has strong prediction and explanation power for OISF. However some adjustments are needed to the agency theory. The theory seems to work in two ways, opportunistic behaviour is also observed on the side of the principal. The findings indicate that lack of trust is a prominent determinant for failure.
Keywords
organisational & personal trust, principal agent theory, IS failures, SMEs, IS outsourcing, RISK, MANAGERIAL, PERSPECTIVE, TRUST, DEVELOPMENT-PROJECTS, AGENCY THEORY

Citation

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MLA
Devos, Jan, Hendrik Van Landeghem, and Dirk Deschoolmeester. “Outsourced Information Systems Failures in SMEs: a Multiple Case Study.” Proceedings of the European Conference on Information Management and Evaluation. Ed. D Remenyi  . England: Academic Conferences LTD, 2007. 139–148. Print.
APA
Devos, Jan, Van Landeghem, H., & Deschoolmeester, D. (2007). Outsourced information systems failures in SMEs: a multiple case study. In D Remenyi  (Ed.), PROCEEDINGS OF THE EUROPEAN CONFERENCE ON INFORMATION MANAGEMENT AND EVALUATION (pp. 139–148). Presented at the European Conference on Information Management and Evaluation, England: Academic Conferences LTD.
Chicago author-date
Devos, Jan, Hendrik Van Landeghem, and Dirk Deschoolmeester. 2007. “Outsourced Information Systems Failures in SMEs: a Multiple Case Study.” In Proceedings of the European Conference on Information Management and Evaluation, ed. D Remenyi  , 139–148. England: Academic Conferences LTD.
Chicago author-date (all authors)
Devos, Jan, Hendrik Van Landeghem, and Dirk Deschoolmeester. 2007. “Outsourced Information Systems Failures in SMEs: a Multiple Case Study.” In Proceedings of the European Conference on Information Management and Evaluation, ed. D Remenyi  , 139–148. England: Academic Conferences LTD.
Vancouver
1.
Devos J, Van Landeghem H, Deschoolmeester D. Outsourced information systems failures in SMEs: a multiple case study. In: Remenyi  D, editor. PROCEEDINGS OF THE EUROPEAN CONFERENCE ON INFORMATION MANAGEMENT AND EVALUATION. England: Academic Conferences LTD; 2007. p. 139–48.
IEEE
[1]
J. Devos, H. Van Landeghem, and D. Deschoolmeester, “Outsourced information systems failures in SMEs: a multiple case study,” in PROCEEDINGS OF THE EUROPEAN CONFERENCE ON INFORMATION MANAGEMENT AND EVALUATION, Montpellier, France, 2007, pp. 139–148.
@inproceedings{406590,
  abstract     = {Since the 1980s, a number of frameworks have been proposed for understanding the concept of information system (IS) failure. Two approaches to IS failures seem particularly important: the concept of Expectation Failure and the concept of Termination Failure. We argue that there is an extra dimension to the problem that is not covered by those descriptive models, which we call the Outsourced IS Failure (OISF). To explain the OISF we draw on agency theory, which views the problems that occur in outsourced environments as the results of three factors: goal differences, risk behaviour differences and information asymmetry. Although the (positivistic) agency theory has already been used to describe phenomena of failure in IT relations there is still a lack of empirical evidence. This paper brings the results of the attempts of falsification of the agency theory in situations of OISF. A positivistic case study research was conducted based on multiple cases in SMEs. The choice for qualitative research is based on the accessibility of well documented secondary data in litigation files of failed IS projects. Eight cases of IS project failures subject to litigation were selected. We conclude that the agency theory has strong prediction and explanation power for OISF. However some adjustments are needed to the agency theory. The theory seems to work in two ways, opportunistic behaviour is also observed on the side of the principal. The findings indicate that lack of trust is a prominent determinant for failure.},
  author       = {Devos, Jan and Van Landeghem, Hendrik and Deschoolmeester, Dirk},
  booktitle    = {PROCEEDINGS OF THE EUROPEAN CONFERENCE ON INFORMATION MANAGEMENT AND EVALUATION},
  editor       = {Remenyi  , D },
  isbn         = {9781905305544},
  keywords     = {organisational & personal trust,principal agent theory,IS failures,SMEs,IS outsourcing,RISK,MANAGERIAL,PERSPECTIVE,TRUST,DEVELOPMENT-PROJECTS,AGENCY THEORY},
  language     = {eng},
  location     = {Montpellier, France},
  pages        = {139--148},
  publisher    = {Academic Conferences LTD},
  title        = {Outsourced information systems failures in SMEs: a multiple case study},
  year         = {2007},
}

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