In the last two decades, an increasing number of firms have
sourced some or all of their information technology functions
from external service providers in sharp contrast with their
gerial flexibility, and the ability to focus on core competencies
(Clemons et al. 2000; DiRomualdo and Gurbaxani
1998; Levina and Ross 2003). Since IT outsourcing is a
delivery option that a firm can select from alternative sourcing
options, a profit-maximizing firm will choose the optimal
mode of IT services delivery by examining the costs and
benefits of the sourcing alternatives. Correspondingly, the
decision to outsource IT services should have a positive
impact on firm-level performance.