Information Systems Outsourcing - Enterprise Information Systems Design, Implementation and Management: Organizational Applications - page 414

Figure 1. Outsourcing process between the client and the service provider

(2006b) it is possible to identify a turning point
in Outsourcing contracts made till then.
During the 60's, small organizations seek hard-
ware Outsourcing as a way to avoid costs with the
acquisition of large and very expensive equipment,
needed to their data processing services (Lee et al.,
2003). The contract between the Blue Cross and
the EDS (Electronic Data Systems), in 1963, to
manage its data processing services it is considered
as the genesis of IS Outsourcing (Dibbern et al.,
2004) as an option for large organizations, which
involved the entire data processing department
and the IS people transfer to EDS (Sargent, 2006).
However it was the Kodak contract, in 1989,
that marked a new generation of IS Outsourcing
mega-deals (Lacity e Willcocks, 1998; Gonzalez
et al., 2006b), currently known as the Kodak effect
(Sargent, 2006), since it consisted on a strategic
alliance with its IS partners - IBM, DEC and
Businessland. This contract turned out to be of a
great attention because it involved big and well-
known organizations as IBM and Kodak, with
an investment of 1 billion dollars deal, including
assets and IS people transfer.

Nowadays, IS Outsourcing is associated to
strong partnerships and alliances, where the Client
and the Provider share risks and rewards (Dibbern
et al., 2004).
The dissemination of successful Outsourcing
contracts led to a global escalation of this practice
(Varajão, 2002), as observed in other large US,
Europe, Canada or Australia organizations that
strategically adopted the Outsourcing (Lacity e
Willcocks, 1998).

the outsourcing process

The Outsourcing process involves the Client
and its Provider and describes the phases they
go through when evaluating and implementing
an Outsourcing solution. Figure 1 illustrates this
process, combining suggestions from previous
studies as Deloitte (2003) and Dibbern et al.(2004).
The process is divided into two major phases:
the adopting Outsourcing decision and the solu-
tion implementation. During the first phase the
organization weighs the advantages and disadvan-
tages associated to Outsourcing (“why”), seeks