Asia pacific journal of information systems

The Korea Society of Management Information Systems (한국경영정보학회)
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Validation of Information Technology Outsourcing Success Model using Structural Equation Modelling

  • Received : 2022.06.08
  • Accepted : 2022.12.26
  • Published : 2023.03.31
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Abstract

Since the last few decades, information technology outsourcing has been observed as an instrument for technology transfer and rapid economic development, with the potential to change the fate of the nation. However, many emerging countries, including Nepal, continue to struggle to establish a foothold in the international market; they are perplexed about their path toward outsourcing, and they still have ineffective laws and policies in place. A snowball sampling method was used to collect quantitative data inside Kathmandu valley among outsourcing companies, freelancers, consultants, and policymakers. Data were properly tested for reliability using Cronbach's Alpha, analysed using exploratory followed by confirmatory factor analysis, and results were confirmed using convergent and discriminant validity. Second-level validation was performed by partial least squares. The researcher has validated a multidimensional structural model with interdependencies between 8 unobserved and 33 observed variables using path analysis and proposed an information technology outsourcing success model for emerging markets from the vendor's perspective. Similarly, a latent variable 'setup quality' was identified as a new construct omitted by previous researchers in the study of IS success. The model shall be interpreted as "the system dimensions - setup quality, system quality and service quality influence the characteristics - communication quality, user satisfaction, and usage of the products or services. The positive impact of mediating factors leads to individual and organizational benefits, resulting in the overall success of information technology outsourcing."

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