Managing customers' IT capabilities in IT outsourcing over time: A system dynamic approach

The IT Outsourcing (ITO) literature shows a strong relationship between the IT capabilities of contracting organizations and the outcomes expected by ITO initiatives. IT capabilities of organizations that hire services in this area are evaluated through every stage of the ITO life cycle (from the decision to outsource IT to the delivery of services). However, there are still gaps to be filled by tools and models that help managers to decide which capabilities to develop and / or maintain internal to their organizations, in which quantity or magnitude and how such capabilities behave in a dynamic scenario of constant interaction between client's and vendor's IT teams. This paper proposes a model based on the concepts of dynamic capabilities and benefits management for evaluating and managing customers' IT capabilities that need to be applied to outsourcing relationships over time. This research is still under development and the results presented here are preliminary.