Procuring Services through IT Crowdsourcing: The Role of IT Administration and IT Flexibility

Abstract

Digital platforms provide organizations with new ways to conduct sourcing activities. Crowdsourcing has emerged as one potential method of sourcing various kinds of information technology (IT) services. Notwithstanding the benefits of IT crowdsourcing services (ITCS), there is a lack of clarity about why some firms procure services through ITCS, whereas others do not. Drawing on the organizational capabilities perspective, we hypothesize that in-house IT administration capability and IT flexibility jointly enhance a firm’s ITCS Platform Suitability Assessment, which, in turn, leads to higher ITCS Service Procurement. We also posit that ITCS Platform Suitability Assessment mediates the relationship between IT Administration Capability and ITCS Service Procurement. Our empirical analysis of survey data from 308 firms in United States supports our hypotheses. Our results suggest that firms that develop IT administrative capabilities and IT flexibility assess ITCS platform characteristics as more suitable for ITCS-related activities. ITCS Platform Suitability Assessment, in turn, drives firms to procure operational services (e.g., setting up automatic payments) and strategic services (e.g., project management) from the loose configuration of workers in the gig economy. Our results contribute to theory by positing and testing a theoretical model that expands the theoretical base used to explain ITCS sourcing. We discuss the implications for the business value of IT platforms, organizational structure, and capabilities in regard to future sourcing strategies.