IT outsourcing has emerged as an important tool for enabling
organizations to gain access to specific skills and services, focus on
their core competencies, and reduce the cost of IT service provision.
With the increasing number of IT outsourcing failures, it is timely to
identify the determinants of IT outsourcing satisfaction. This study
investigates the types of IT function outsourced and examines the
factors influencing customer satisfaction in IT outsourcing in Malaysian
small- and medium-enterprises. Using an email questionnaire survey,
data are collected from 100 firms listed on the Directory of Small and
Medium Enterprises in Malaysia. Drawing from Domberger's Theory of the
Contracting Organization, four hypotheses are developed and tested in
this study. Using the PLS path modelling technique, the findings show
that focus on core competency, cost reduction, access to IT expertise
and skills, and flexibility are positively related to customer
satisfaction in IT outsourcing. The paper includes implications and
recommendations for future studies. [ABSTRACT FROM AUTHOR]