eThesis - School of Business electronic theses

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Purpose of the study The purpose of this study was to identify the challenges of outsourcing systems integration by examining systems integrator service offered to the public sector. The focus was turned also to organizational and strategic aspects of integration instead of mere technical ones. The challenges were looked from external perspective through transaction cost economics and from internal one through capabilities. With internal challenges the goal was to identify if they relate to the customer, the service provider or if they are shared between the two.

Methodology The research framework was built based on previous research in the fields of TCE, capabilities, information systems outsourcing and service co-production. The research was conducted as a single case study concentrating on one large systems integration service provider to gain full understanding of the complex research phenomena. The main data collecting was done through semi-structured interviews to enable modifying the questions according to the interviewee. Additional data sources were public reports, newspaper articles, workshop and case company internal material. Furthermore, the research is abductive, which means that some of the theoretical discussions were revised after pilot interviews.

Findings The key findings of the study include the description of the external and internal challenges of systems integration. The external challenges relate to the characteristics of the service and the transactions, which combined with outsourcing, would require long lasting relationships or elaborate contracts. When the customer is a public organization, long lasting relationships are challenging due to competitive bidding. The internal challenges are due to lack of capabilities. Most of the capabilities required for successful service production are shared between the service provider and the customer because of the co-creative nature of the service. From a skills perspective, interpersonal and communication skills were identified to be more critical than technical skills.