Managing Culture as Critical Success Factor in Outsourcing

Outsourcing was originally confined to peripheral business functions and mainly motivated by a cost saving logic, but has now developed into a routine strategic management business model that affects not only peripheral functions but impacts the core business of organizations. Industry research typically indicates that over 50% of firms believe that organizational culture fit is a key criterion in the selection of vendors for outsourcing; showing the need for outsource service vendors to become partners with their customers and to become an extension of them. This paper explores the cultural paradigm for the strategic outsourcing of IT and business processes, exploring the impact that culture plays as an inevitable influencing factor in the global IT services landscape. The author supports the hypothesis that a cultural match between the firm and its vendors is critical to success in outsourcing and makes recommendations for further research in this field