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The Productivity Benefits of IT Outsourcing

Tags: union, it outsourcing, outsource, outsourced, productivity, cost savings, outsourcing, data

Overview This paper examines the productivity benefits of IT outsourcing in the credit union industry, using data on the population of U.S. credit unions from 1992-2005. Within-credit union switching from internal IT to outsourced IT reduces operating costs by roughly 30%, once they control for the endogeneity of switches. Less productive firms are more likely to outsource in the cross-section, and more likely to exit. The reorganization from internal to external IT production is responsible for as much as $6 billion in annual cost savings for the industry.

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Publisher: University of California
File Format: PDF
Date Published: Feb 2, 2009
Format: White Papers
Topics: Outsourcing

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