Information system outsourcing and its impact on supply chain performances

In the aftermath of recent global financial crisis, many firms consider changing their strategic thinking. Such change includes the reassessment of current business practices that may not necessarily add the maximum value to the supply chain process and may not bring the maximum possible return from the allocated resources. Thus, outsourcing strategy which allows the firm to focus on its core competency has gained popularity over the years. One of supply chain essentials that are often outsourced is an information system (IS) which plays an increasingly important role in facilitating business transactions, aiding decision‐making processes, and visualising assets throughout the supply chain. To help the firm better leverage IS outsourcing, this paper examines whether or not IT outsourcing enhances the firm's supply chain performances. Based on the exploratory analysis, we found that supply chain performance is significantly influenced by: 1) the size of an outsourcing firm; 2) the degree of the firm's recognition of supply chains as its competitive advantage; 3) the extent of prior IS outsourcing experiences.