Dynamic Tools for IT Outsourcing Firms in the Context of Innovation

In today’s global economy, Information Technology (IT) outsourcing has turned into the most commonly used business strategy which saves money, improves quality of services, improves technical capabilities and increases flexibility in the firm. It is used to gain competitive advantage and access to IT capabilities not available in-house. It has usually been considered due to its cost saving aspects or financial benefits but recently this concept has slightly been changed. Now firms are outsourcing IT in order to add-value in their products or services and expect novelty in return in non-core services. The concept of attaining innovation through outsourcing has extensively studied and considered as a valuable approach towards innovation. This paper discusses the significance of outsourcing and investigates the possible impact of IT outsourcing on innovative capabilities of an Information Technology Outsourcing (ITO) firm and emphasizes over to uncover the role of various factors that may have contributions toward enhancing innovation.To carry out this study, both the qualitative and quantitative methodologies have been used to collect the evidences and analyzed in light of comments, discussions and feedbacks recorded during surveys and interviews.Result of this study indicates, that the factors like positive attitude (to innovate), investment in Research & Development and willingness to adopt profit and risk sharing approach (Joint Venture) for business, found prominent. However, lack of concern regarding IPRs and scientific publications has also been found in firms.