IT outsourcing adoption in Non-profit organizations in Kenya

Abstract

In recent years, information technology (IT) outsourcing continues to receive favorable acceptance to maximize organization's benefits. In-turn, vast amount of information has been produced about the IT outsourcing phenomenon over the last two decades. However, few studies have examined the factors that influence IT outsourcing in non-profit's decision to adopt IT outsourcing and develop a conceptual model of ITO adoption in non-profit organizations in Kenya. Grounded in the innovation diffusion theory (IDT) and the technology-organization-environment (TOE) framework, we developed a model for ITO adoption in non-profits in Kenya.We specify five innovation characteristics (relative advantage, compatibility, complexity, trialability, and observability) and seven contextual factors (top management support, organizational competence, formalization, centralization, supporting industries e-readiness, government e-readiness and competitive pressure) as drivers and inhibitors of ITO adoption.Survey data from 45 public charities was used to test the proposed adoption model.Among the innovation characteristics; relative advantage, compatibility, trialability, and observability are significant drivers.Among the contextual variables; top management support, organizational competence; centralizational competence, centralization, supporting industries e-readiness and competitive pressure are significant. Overall, competitive pressure emerged as most significant factor; we urgue that the drive for efficiency is increased by an environment characterized by heightened scrutiny and competition for resources. Thus increasingly competitive environment led to pressure to adopt ITO.Together, these results show that IT outsourcing adoption in non-profits can be better understood by including both innovation characteristics and contextual factors, where as past literature has traditionally treated the two separately. The implications for theory and practice are discussed.