Title: R&D Outsourcing in Information Technology
Organizations: Effects on Costs, Profits, and Technological Capability
Abstract: Because of the budgetary constraints,
an increasing number of organizations have taken the decision to outsource
their R&D activities to external outsourcing contractors. However, relevant
literature continues to debate on whether or not R&D outsourcing can
improve organizations’ financial performance. Therefore, this study aims
to study how different sourcing strategies during new product development
process influence development cost, financial profit and technological capability.
The results from 121 Taiwanese IT firms indicate that R&D outsourcing
is more effective in terms of both financial benefits and technological capabilities
gained when products are developed under radical product innovation. The
results also indicate that R&D outsourcing should be treated as complementary
to in-house R&D. Research and managerial implications are also discussed.
Authors: Yu-An Huang, Hsien-Jui Chung, and Chad
Lin