A Governance Mechanisms Framework for Multisourcing in Business Groups

Many large corporations are adopting multisourcing strategies. Multisourcing is described as the blending of services from multiple company-internal and external suppliers in the pursuit of business goals. To date, governance-related aspects in terms of multisourcing have been scarcely covered in the academic literature. With this research study, the authors examine how business groups utilize governance mechanisms in a multi-sourced IT environment. This article contributes to the body of knowledge in three ways. First, it describes established IT governance mechanisms; second, it presents insights into three real-life examples of IT governance mechanisms at leading international insurance companies; and third, it extends current literature toward multisourcing in a group context by proposing and applying a framework of IT governance mechanisms targeting the different relationships of multisourcing in business groups. In addition, this research is useful for corporations facing similar challenges.