Information Technology Outsourcing Reasons in Aviation Industry

Transcription

1 Information Technology Outsourcing Reasons in Aviation Industry Nuray Tokgoz* and Dilek Erdogan ** Information technologies (IT) have had a substantial role in improving the affordability, safety, capability and efficiency of the air transportation system and influencing the consumer demand for air transportation. There are rapid changes in information technology so aviation companies need to adapt to these changes in order to survive. Aviation companies may prefer to transfer their IT assets, leases, staff and management responsibility for delivery of services from internal IT function to third-party vendors. Information technology outsourcing provides organizations with greater capacity for flexibility, especially in the context of the purchase of rapidly developing new technologies, new people, and myriad components of complex systems. This study aims to answer (1) "How does information technology management differ in the aviation industry?" (2) What are the reasons for aviation organizations to opt for outsourcing?" This study used qualitative research methods to answer questions. Data were collected by making semi-structured interviews with aviation company s IT managers. Data were analyzed via content analysis by using Nvivo 11. JEL Codes: L93, M15 and L24 1. Introduction Information technologies are based on data processing used to access information in short time and make it available for use by anybody. These technologies enable obtaining, processing, storing, analyzing and communicating information (Tutar, 2006). Since Kodak s initial foray into outsourcing (Applegate and Montealegre, 1991), IT outsourcing has emerged as a strategic option for many firms. The wellpublicized decision by Eastman Kodak to hand over its entire data center to IBM, its microcomputer operations to Businessland, and its telecommunications and data networks to Digital Equipment Corporation and IBM is a classic illustration (Loh and Venkatraman, 1992). Hirschheim and Lacity (2000)) consider information technology outsourcing as the practice of transferring IT assets, leases, staff, and management responsibility for delivery of services from internal IT function to third-party vendors. The degree of outsourcing and IT functions to be outsourced vary by the operation strategies of buyers and various reasons for outsourcing. There are different sourcing decisions in the literature. Lacity and Hirschheim (1995) suggest that sourcing decision options are total outsourcing, total insourcing, selective outsourcing. Regardless of the type of outsourcing decision, major IT assets that can be procured from a supplier are as follows: data center, application development, application maintenance, help desk, voice network, data network, desktop, office/field support, telecommunications, asset acquisition, disaster recovery, print management, training (Halvey and Melby, 2005). *Assoc. Prof. Dr. Nuray Tokgoz, Department of Management and Organization, Faculty of Business Administration, Anadolu University, Turkey, nuzkesici@anadolu.edu.tr ** Dilek Ergogan, Department of Aviation Management, Faculty of Aeronautics and Astronautics, Anadolu University, Turkey, dilekc@anadolu.edu.tr Department of Business Administration

2 There are a wide range of reasons as to why organizations to opt for outsourcing for information technologies and these include focusing on their main line of business, reducing information technologies costs, using information technologies appropriately, ensuring resource continuity or reducing costs and technology risks. A great number of studies examined outsourcing reasons of businesses (Ang and Straub, 1998, Beaumont and Costa, 2002, Gonzalez et al., 2010, Lacity and Willcocks, 1998, Quinn and Hilmer, 1994, Seddon et al., 2007, Van der Zee and Van Wijngaarden, 1999). However, this paper intends to reveal the reasons for organizations to opt for outsourcing in the aviation industry entailing extensive use of information technologies. Information technologies are used in air transport industry to a great extent with sub-branches such as airline transport, aircraft production and maintenance, airport management, air traffic services and ground handling. Use of information technologies in the aviation industry has a significant impact on security, efficiency, capacity, environmental effects of organizations and financial performance (Hansman, 2005). Institutions operating in the aviation industry are characterized by immense use of IT outsourcing. According to the results of a survey conducted with 200 airline in 2016, organizations use 35% of IT budget for internal IT department, while they allocate the remaining 65% of their budget for outsourcing. The goal of this paper is to obtain in-depth understanding of why organizations operating in the aviation industry use IT outsourcing through qualitative research methods. However, before we attempt to achieve this, we tried to answer the questions such as "How does information technology management differ in the aviation industry?" and "What are the reasons for aviation organizations to opt for outsourcing?" respectively. 2. Literature Review Reasons and advantages of IT outsourcing have been discussed frequently in the literature. Results of some studies investigating the reasons of IT outsourcing are provided below: According to Quinn and Hilmer (1994), the reasons of IT outsourcing include reducing costs, increasing service quality, and improving the ability of focusing on core business. Ang and Straub (1998) suggested a model involving the variables such as production cost advantage, transaction cost, financial slack, and firm size to determine the degree of outsourcing in their research across the U.S. banks. Their test showed that cost saving is one of the main reasons for outsourcing in the U.S.A. banking, in spite of the fact that transaction costs are generated. Van der Zee and Van Wijngaarden (1999) address decreasing the total cost of ownership of the IT services, increasing IT services flexibility and achieving innovatively IT services as the most important reasons of IT outsourcing. Beaumont and Costa (2002) found that close to 40% of Australian organizations outsource one or more IT application. Large organizations tended to outsource more than small ones. This paper suggests that three most important reasons for outsourcing are access to skill, improved quality and focus on core business. Results of case study conducted by Levina and Ross (2003) suggest that reasons for IT outsourcing are not pure tactical and economic reasons. They are rather more strategic.

3 The study of Seddon et al. (2007)) tests Domberger's theory of the contracting organization applies in an IT context. The paper indicates that Domberger's four factors do appear to provide a simple way of summarizing senior IT managers explanations of the reasons for why their organizations decided to outsource IT service provision. It concludes that it is important to note that cost savings are not the only benefits that a client firm can derive from outsourcing; non-monetary benefits such as opportunity costs avoided through access to better advice, growth opportunities through concentrating on its own core capabilities, and flexibility options need to be factored into the overall cost benefit equation. (Gonzalez et al., 2010) examined Spanish companies and found that the opportunity to have better IT services and the possibility to achieve technological improvements emerge as priority reasons than reduction of cost savings in staff and technology. The paper indicates that only small companies with very few employees in their IT department consider the advantage of cost reduction as the main reasons of outsourcing. 3. The Methodology According to Creswell (2009) qualitative researches are subjective and conducted to understand a phenomenon and make sense of participants' perceptions of it. In an effort to understand and examine a social phenomenon in depth in line with the purpose of the aforementioned study, this paper used the qualitative research method. Participants of this study are IT managers of organizations operating in Turkish aviation industry. Qualitative research involves no upper or lower limit for the number of participants. Collecting data from participants who will provide rich data is more important than having high number of participants (Creswell, 2007). This study therefore involved a purposeful choice of sampling (Glesne, 2012) and collected indepth data from 14 IT managers working at 11 different aviation businesses. All participants were managers with varying titles such as IT Director, IT Manager, IT Specialist or IT Project Manager. Of the participants, 3 worked at airport companies; 5 at airline companies; 2 at air freight companies; 4 at ground handling companies and 1 participant at an aircraft maintenance and production company. Participants' positions at different lines of business in aviation industry provided data diversity to the study. Characteristics of study participants are provided in the table 1. Data was collected through face-to-face interview method. A semi-structured interview form was used during interviews. Prepared interview form was reviewed by four specialists and was revised based on their feedbacks. Furthermore, a pilot experiment was made to see if the interview form serves its purpose effectively in line with the goals of this study. Interviews were made in April 2016 by a single interviewer. Interview form used for the study was reviewed by Anadolu University Ethics Committee and accepted for use in the study before the study was initiated. During the appointment stage, participants were informed about the subject matter, purposes, scope, and use of audio recording during the study. Participants were also informed that they would not be facing any risk during and after the study. The participants were therefore mentioned anonymously and code names were used to protect their confidentiality.

4 Participant Code Name Proceedings of 39th International Business Research Conference Firm Type Table 1: Characteristics of Participants Education Work Experience Position Alpha Airport Postgraduate 9 IT Project Management Office Manager Bravo Aircraft Undergraduate 16 IT Director Maintenance and Production Charlie Air Freight Undergraduate 4 IT Professional Echo Airport Postgraduate 20 IT Director Foxtrot Airline Postgraduate 25 IT Manager Zulu Ground High School 24 System and Network Manager Handling Mike Airline High School 14 System and Network Supervisor Oscar Airline Undergraduate 10 Software Development Supervisor India Airline Undergraduate 9 Project Team Leader Sierra Ground Undergraduate 12 Project Manager Handling/Caterin g Romeo Ground Undergraduate 11 Technical Office Manager Handling Delta Ground Postgraduate 17 IT Manager Handling November Airport Postgraduate 17 System Development Supervisor Management Yankee Air Freight Undergraduate 16 Information Systems Manager Interview form used for the study was reviewed by Anadolu University Ethics Committee and accepted for use in the study before the study was initiated. During the appointment stage, participants were informed about the subject matter, purposes, scope, and use of audio recording during the study. Participants were also informed that they would not be facing any risk during and after the study. The participants were therefore mentioned anonymously and code names were used to protect their confidentiality. Audio recordings of all interviews were transcribed upon completion of the interviews. NVivo 11, qualitative data analysis software, was used during data analysis process. Data obtained from the interviews was processed through inductive analysis. Inductive analysis can be described as categorizing data by coding the data obtained from participants through interviews, discovering intersections between these categories and identifying themes and sub-themes in an effort to understand the symbolic world of participants (Patton, 2002). In this study, data analyzed by two researchers was analyzed separately, and themes and codes were identified accordingly. Differences between analyses were discussed by researchers and then codes and themes were finalized upon agreement on codes and themes. Several strategies exist to ensure trustworthiness in qualitative research (Glesne, 2012). In this study, methods such as confirmation of participants, recording the interviews, consistency and confirmation review by specialists on methods and fields were followed to improve trustworthiness and all data collected was kept confidential.

5 4. The Findings Proceedings of 39th International Business Research Conference 4.1. Research Question 1: How Does Information Technology Management Differ in the Aviation Industry? Upon inductive analysis of research data, two themes and seven codes were identified to answer this research question. Participants extended two different opinions as follows: "Information technology management differs in the aviation industry" and "Information technology management does not differ in the aviation industry". These were individually addressed as two separate themes. Seven codes were identified under the theme "Information technology management differs in the aviation industry": Requirement for uninterrupted maintenance of operations in the aviation industry, comprehensiveness and complexity of projects, long term investments, impact of regulations in the industry, dynamic structure of the industry, pioneering nature of the industry for new technologies and industry as a service sector. Codes identified to answer why IT management differs in aviation industry are shown in Figure 1. Figure 1: Codes for IT Management Differences in the Aviation Industry The subject which was emphasized the most by participants under the theme "Information technology management differs in the aviation industry" was the requirement for uninterrupted maintenance of operations. Interruptions in operations in the industry result in significant tangible and intangible losses suffered by businesses. The ultimate goal of information technology management in the aviation industry is uninterrupted maintenance of operations. IT systems are therefore expected to function for support on a 24/7 basis in a way to ensure maintenance of operations.

6 Participant YANKEE commented on this as follows: "There is a significant difference. All systems available are expected to function on a 24/7 basis. No excuse such as national holiday or off days is tolerated in our job. Consequently, you arrange the entire set-up accordingly, acquire or purchase devices and equipment and employ staff for this purpose. Regardless of holiday time, one of us has to be present in Istanbul during the holiday. The reason for us to be in Istanbul, not directly in the office, is that we have to guarantee that in case of a serious problem, someone in our team would come to the office and intervene in the system physically within half an hour in the worst case scenario as we have no remote access to the system." Most of the participants believing that information technology management differs in the aviation industry made the biggest emphasis, as the reason for such difference, on the fact that aviation industry is affected by national and international regulations. Organizations operating in the industry must comply with the regulations introduced by national and international authorities. These regulations in the industry have also implications on information technology management. The participant ECHO expressed the effect of regulations introduced by international authorities on information technologies: "Annex-10 and Annex-14 issued by the ICAO (International Civil Aviation Authority), with which we must comply, affect our infrastructure set-up. They contain some instructions that airports must have two focuses and communicate with each other. The aviation industry features extensive safety measures as it is targeted by terrorist attacks in particular. Therefore, there are some information security practices in place which were imposed on aviation organizations by national and international aviation authorities. The participant DELTA's opinion on practices imposed by national aviation authority on organizations regarding information security is provided below. "For example, there are processes involving information security, and intervention teams for cyber incidents. Directorate General of Civil Aviation, the national civil aviation authority, imposes a requirement through publication of a circular. It suits us as well. For an IT manager, procedures offer information security for intervention teams in case of cyber incidents. Forming such teams is a financial burden for businesses. Such circulars of the aviation authority are actually advantageous by helping us justify and enforce this practice before the top management. " The participant ZULU stated that there are numerous practices in the field of information technologies in the aviation industry, which makes IT management more complicated. ZULU summarizes this as follows: "There are a lot of customers in the aviation industry and each of them may have their own check-in system. For example Pegasus uses a system called PDKS and X Company uses another system. There are therefore a great number of applications. I call them "tiny applications". They can be anything from a small Excel file to a tiny web service. You therefore need integration and an appropriate infrastructure to use all of them together. For example [customer] says X authorization is required for Y service to function on the Internet. In such cases, they do not have an authorization for your standard. When you provide such solutions, everything gets complicated or

7 messy so to speak. But why? Because there are so many variables. The system does not have a certain standard." While the participants believe that IT projects in the aviation industry are extensive and complicated tasks, one of the reasons that differentiates IT management is the requirement of long-term investments. The participant ECHO agrees with this fact: "However, if you perform an IT procurement in the aviation, your investment is 5 years at a minimum. In other words, even if you purchase a server or laptop, you need to change it 2 or 3 years later. I mean all of your investments have a long term." Another point differentiating information technologies management is that the aviation industry features extensive use of information technologies and has a pioneering role for new technologies. The participant ECHO's comments on this as follows: "Therefore, the aviation industry pioneers new technologies used in the IT field. There are more specific borders in this field and you need IT technologies immensely as you work in a narrow field. It means you must be using much more checkpoints for each IT system you use." Another matter differentiating IT management in the aviation industry is dynamic structure of the industry. The participant FOXTROT emphasizes how dynamism of the industry affects IT operations: "For one thing, the industry is very fast with decisions and trends changing rapidly. Rules change whenever there is a terrorist attack or something else. It is very important to have a live system. In other words, purchasing and installing a software package does not mean that it serves all the purposes. It does not mean that my task there is done and there is nothing else left to do. You always need to work on and supervise it. That's why it is not an easy operation." According to the participants' responses, another reason differentiating IT management is the fact that aviation is a service sector. NOVEMBER, an IT manager at an airport organization, states that IT management is difficult in this industry as it is a service sector. "From the perspective of the companies we serve, we may face penalties if we fail to meet the service standard expected by the company. We are both trying to satisfy the customers in order to make them feel good psychologically and avoid penal sanctions in the service sector. Only two participants suggested that IT management is does not differ in the aviation industry. SIERRA, IT manager of a ground handling catering company, stated that IT is characterized with significant differences for airline companies operating in the aviation industry; however, it does not pose major differences for a ground handling catering company.

8 4.2. Research Question 2: Why Do Aviation Organizations Opt for Outsourcing? Analysis of research data revealed 13 codes under 3 main themes, namely financial, technical and strategic, regarding the reasons for aviation organizations to opt for outsourcing. The list of such codes and themes by the number of total responses is shown in Table 2. Table 2: Reasons, Themes and Codes for IT Outsourcing Reasons for IT Outsourcing Number of Total Cited Financial Reducing the cost of ownership of information technologies 13 Reducing staff costs 7 Reducing costs of investment in technology 4 Technical Improving service quality 8 Specific nature of IT products or services 3 Ensuring integration of IT systems 1 Unsuitability of IT department to develop software 1 Strategic Quick access to modern technology 9 Keeping up with changes in technology 8 Focusing on core abilities 5 Decision of top management 3 Benefiting from the different perspective of supplier 2 Reducing the risk of dependency on employees Financial Reasons Along with the advancements in information technologies, IT has become an important part of business processes and IT costs have started to increase its share within total costs. Therefore, major reasons as to why buyers opt for IT outsourcing include financial reasons. Upon analysis of qualitative data of the research, three codes such as reducing the cost of ownership, reducing personnel costs and reducing costs of investment in technology were obtained as shown in Figure 2. Figure 2: Codes Associated with Financial Reasons for IT Outsourcing

9 Given all data, reducing the cost of IT ownership was found to be the most commonly cited reason for outsourcing by participants. The participants consider that capability of purchasing same IT products/services from suppliers with lower costs is the main reason for the motivation to outsource. IT suppliers can offer IT products/services with lower costs, capitalizing on scale and scope economies. Thus, they can sell the same products or services to buyer companies. (Beulen et al., 2006, Kim and Young-Soo, 2003, Tho, 2005, Lacity and Willcocks, 1998). Participant SIERRA emphasized the importance of lower costs as one of the reasons for outsourcing. "Let's assume that we want to develop this software for warehouse management system from scratch and we don't use the available ERP for this purpose. We would need to employ a team of at least 10 software developers. We would be able to develop this software through this team on the aforementioned subject for at least two years. Its total cost would be minimum 5-6 times or 10 times higher than obtaining such software from our current supplier. Performing this task internally is not the right way to do it." Another financial reason for IT outsourcing is reducing IT staff costs. IT departments need more personnel with more qualifications to fulfill all their needs internally. Available staff should also keep their knowledge up-to-date with continuous training (Gonzalez et al., 2010). For these reasons, companies meet their IT needs through outsourcing instead of recruiting high amount of employees. While more IT employees are needed during projects or busy periods, fewer employees are needed in other times. However, employment of more staff would not be required when outsourcing is used. The participant ZULU supports this fact: "While more IT staff is needed on specific subjects or during projects, fewer employees are needed during routine operations. Therefore, staff costs will decrease by using outsourcing during projects and specific subjects as this will not require maintaining internal staff continuously." While organizations can reduce the costs of IT ownership and staff costs through outsourcing, they can also avoid significant IT investments by using outsourcing. Organizations will not have to make significant investments in technology. The participant BRAVO explained how they obtain a supplier management system without any investment. BRAVO: "We integrated supplier system entirely on their system without any investment." Technical Reasons Based on analysis of qualitative data, four codes associated with technical topics given in Figure 3 were obtained, namely improving service quality, specificity of IT products or services, integration of IT systems and unsuitability of IT office for software development.

10 Figure 3: Codes Associated with Technical Reasons for Outsourcing Outsourcing improves quality of IT services. Suppliers are more competent than buyers. This is because they have more advanced technologies, more qualified staff, more knowledge base and better management capacity as their basic skill is producing information technologies (Gonzalez et al., 2010). Quality and performance of information technologies procured through outsourcing will also be higher than those obtained internally. Organizations can solve technical issues and improve service quality through IT outsourcing without increasing their personnel (Beulen and Ribbers, 2007). The participant BRAVO expressed that they improved the performance of IT systems through outsourcing: "When we consider it based on performance, performance of all systems is actually much better than I can possibly manage." Another technical reason for preferring IT outsourcing has to do with the specific nature of the subject causing outsourcing. IT departments typically have a few employees without employing specialized personnel in each field. Therefore, some of the participants stated that when they need a product and/or service in a specific field other than their routine operations, they procure it through outsourcing. Following the statements of participants YANKEE support the fact that specific nature of the subject is reason for outsourcing. "This is where the difficult part starts for us. Our expertise is entirely focused on system management; however, we are not specialized on management of warehouse systems for which we obtained services or on SITA, an application used in the aviation industry. We start outsourcing services at this point. We are specialized in a specific subject and opt for outsourcing for other subjects rather than employing specialists internally." Another reason for outsourcing mentioned by participants is the integration requirement for IT systems. Some IT systems need to be integrated with one another because of their nature. Therefore, in some cases, other IT products or

11 services must be procured from the same supplier. The participant OSCAR expressed that although they are capable of developing a module for a passenger booking system, they procured this module along with other modules as it must be compatible with others. "There are systems such as schedule planning or crew planning which we used to develop as we are familiar with them. We would still be developing them but the company we outsourced already has those products as well. So, we gave up developing them internally for the sake of system integrity and pursuant to our commercial agreement with the supplier. As the other company can offer core base functions through which we manage our ticketing system and plan the crew at the Operation Control Centre (OCC), we purchased these functions from them as a package." (OSCAR) Based on data analysis, we found out an outsourcing reason apart from that of literature. According to a software developer, software development cannot be performed at an IT office because it requires full concentration, and routine IT office works make it impossible. The participant YANKEE expressed this opinion as follows. "Software development is a task which can be performed more easily remotely from the office. When you are in the office, it can actually be more difficult to stick with the project plan." Strategic Reasons There are not only financial and technical reasons for IT outsourcing but also there are also strategic reasons. Based on data analysis, six codes were obtained such as quick access to modern technology, keeping up with changes in technology, focusing on core abilities,, benefiting from the different perspective of supplier and reducing the risk of dependency on employees and injunction of top management as shown in Figure 4. Following the reduction of total costs of ownership, the most commonly cited reason for IT outsourcing is quick access to modern technology. Buyer organizations employ a limited number of IT personnel and as these employees are primarily responsible for keeping the system functional. They do not have sufficient time to develop or learn new technologies. As this is the core capability of IT suppliers and they provide scale economies, IT suppliers can provide buyer organizations with modern IT services more rapidly (Beulen et al., 2006, Kim and Young-Soo, 2003).

12 Figure 4: Codes Associated with Strategic Reasons for IT Outsourcing The participant ECHO expresses that although they have sufficient resources for software development, they opt for outsourcing software in order to put airport software into use in a short time. Another reason for outsourcing as mentioned by the participants is quick adaptation to changing technologies. Organizations operate in a dynamic environment and information technologies change and evolve at a dizzying speed in this environment. With limited resources of IT departments, it is not easy for organizations to respond to such change rapidly by minimizing the costs (Beulen et al., 2006, Kim and Young- Soo, 2003). The participant BRAVO expressed how they can adapt to global changes rapidly with the ready-to-use package programs they procure from suppliers as follows. "Business methods are changing in many fields throughout the world. Manufacturing methods are changing, new approaches are introduced, and technologies are evolving. It is very difficult to manage all these elements with internal IT teams. Therefore, it is very important to manage them with a ready-to-use program. For example, there was a Year 2000 problem, also called year 2000 syndrome. In Turkey, we also had major problems such as redenomination by the removal of six zeros from the Turkish lira or abolishing winter time to stay on summer time all year round. It would be very difficult if we tried to overcome these challenges with our own resources but when you use ready-to-use programs, you can response and adapt in a very short period of time as solutions for such problems are already available worldwide." Another reason for outsourcing cited by the participants is to focus on their core business. Provision of information services in organizations is considered as a supporting function contributing to business processes as a priority. Added value provided by IT to organizations is limited and generally considered as an auxiliary function rather than a strategic one in organizations. For this reason, outsourcing IT

13 functions enables organizations to focus on their core business (Grover et al., 1996). Outsourcing routine IT tasks also allows IT staff to focus on more critical matters for the business. Opinions of the participant BRAVO in this regard are as follows. "We believe that it is critical for IT to give utmost focus to core business by eliminating outsourcing for these services and avoiding operational processes as much as possible." Another reason for outsourcing as determined by data analysis is the decision of top management to use outsourcing. The participant FOXTROT stated that in some cases, they opt for outsourcing upon decision of top management without knowing the reason. "In some organizations, management is very oppressive and dominant. Sometimes, IT receives instructions from commerce department or other departments for outsourcing a specific task. IT manager doesn't even know the rationale behind it or cause-effect relationship." Other strategic reasons for outsourcing as determined upon data analysis include benefiting from the different perspective of supplier and reducing the risk of dependency on employees. According to the participant SIERRA, working with a supplier offers a new dynamism and different perspective to an organization. The participant's opinions in this regard are as follows. "Furthermore, after some time, you observe a degree of professional blindness occurring gradually in the company. Employees accept and embrace some practices and cannot see some deficiencies or mistakes. However, a consultant company both brings a new dynamism and accurate guidance by guiding you through the right path as they have already completed many similar projects. It helps you to beat your learned helplessness. At this point, working with consultant companies is actually a good thing." (SIERRA). According to the participant NOVEMBER, assigning the software development task to internal IT staff creates the risk of dependency on employees. They therefore opt for outsourcing IT products or services in some cases. NOVEMBER: "There can be some risks... You can have difficulties or major problems if employees who were responsible for this task leave. It increases dependency on persons in a way. Outsourcing can therefore be more feasible in terms of costs and avoiding any difficulty in management after the process." 5. Summary and Conclusions Our study indicates that according to 14 IT managers working at aviation organizations in Turkey, reasons differentiating IT management in the aviation industry include the requirement for uninterrupted maintenance of operations on a 24/7 basis, comprehensiveness and complexity of projects, impact of national and international regulations on the industry, dynamic structure of the industry, pioneering nature of the industry for new technologies, requirement of long term investments, and having the features of service sector. Managing information technologies with limited internal resources at aviation organizations having such features in terms of information technologies appears extremely difficult. Organizations therefore utilize resources and competences of IT suppliers through outsourcing. Results of this research indicate that there are financial, technical and strategic reasons for IT outsourcing at aviation organizations in Turkey. Consistently with other studies in the literature, financial reasons based on reducing costs are

14 deemed main motivation for IT outsourcing by the IT managers. However, the participants place high emphasis on other reasons such as keeping up with modern technology and quick access to technology as well. There are a great number of researches studying the reasons for IT outsourcing in the literature; however, this study attempts to unfold such reasons within the context of aviation industry, a specific field. Therefore, it is believed that this study will contribute to the literature. As this is a qualitative research conducted on a limited number of participants, it is not possible to generalize the results for the overall aviation industry. Further quantitative studies can be conducted to test these reasons in the aviation industry. End Notes This study is supported by Anadolu University Scientific Research Projects Commission with the project number 1601E035. References Ang, S and Straub, DW 1998, Production and transaction economies and IS outsourcing: a study of the US banking industry, MIS quarterly, 22, pp Applegate, L and Montealegre, R 1991, Eastman Kodak Company: Managing information systems through strategic alliances, Harvard Business School Case, 9, pp Beaumont, N and Costa, C 2002, Information technology outsourcing in Australia, Advanced Topics in Information Resources Management, Volume 2, pp Beulen, E and Ribbers, DP 2007, Control in outsourcing relationships: governance in action, System Sciences, HICSS th Annual Hawaii International Conference on, IEEE, 236b-236b. Beulen, E, Ribbers, P & Roos, J 2006, Managing IT outsourcing, London and New York, Routledge. Creswell, JW 2007, Qualitative inquiry and research design: Choosing among five approaches, Sage. Creswell, JW 2009, Research design: Qualitative, quantitative, and mixed methods approaches, California, Sage publications. Glesne, C 2012, Nitel Araştırmaya Giriş, Ankara, Anı. Gonzalez, R, Gasco, J & Llopis, J 2010, Information systems outsourcing reasons and risks: a new assessment, Industrial Management & Data Systems, 110, pp Grover, V, Myun Joong, C & Teng, JTC 1996, The Effect of Service Quality and Partnership on the Outsourcing of Information Systems Functions, Journal of Management Information Systems, 12, pp Halvey, JK and Melby, BM 2005, Information technology outsourcing transactions: process, strategies, and contracts, New Jersey, John Wiley & Sons. Hansman, RJ 2005, The impact of information technologies on air transportation, AIAA Aerospace Sciences Conference, AIAA, 2005 Reno, Navada. Hirschheim, R and Lacity, M 2000, The myths and realities of information technology insourcing, Communications of the ACM, 43, pp

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