Producing benefits from information systems outsourcing in the public sector: Towards a better understanding of owner dynamic capabilities

The proportion of information systems outsourcing and its importance have continuously increased to improve public services. However, there has been a lack of empirical evidence on how the successful completion of projects and its outsourced systems can give rise to public values. In other words, there has been little research attention on a project owner's beneficial leverage of public business from outsourcing project performance. In order to address this, this paper suggests the concept of owner dynamic capability. Previous project capability studies have tended to focus heavily on the roles of project suppliers, and the differentiated perspective on a project owner’s capabilities is still insufficient. Moreover, the concept of project capability in classic analysis does not clearly distinguish dynamic capabilities and operational capabilities. Thus, by defining the owner dynamic capability, we aim to explain a project owner's outsourcing project capabilities, and to analyse required owner dynamic capabilities to realise business benefits in the public sector. The aim of this paper is to examine owner dynamic capabilities for delivering benefits from IS outsourcing, by uncovering key IS project issues in the public sector. Qualitative content analysis was employed to investigate information systems outsourcing projects in the UK central government. Fifteen National Audit Office Value-for-Money reports covering thirty one information systems projects were analysed. The findings draw our attention to the necessity of owner dynamic capabilities and the significance of project back-end capabilities as one of owner dynamic capabilities.