Academic journal article International Journal of Management

Effects of the Outsourcing of Information Systems on User Satisfaction: An Empirical Study among Taiwanese Hospitals

Academic journal article International Journal of Management

Effects of the Outsourcing of Information Systems on User Satisfaction: An Empirical Study among Taiwanese Hospitals

Article excerpt

The implementation of information systems (HIS) is an extremely challenging task for hospitals. This is important because the quality of information significantly affects user satisfaction, with unhappy users frequently ending their relationship with the hospital and conveying their negative experiences to others. In this study, we investigate the frequency of positive and negative 'critical incidents' with respect to information system implementation by hospitals. The sample comprised 166 employees at 12 hospitals in Taiwan, the majority of whom had experience of working with information systems in their hospitals. Three main factors-system quality, information quality and service quality-were identified from the analysis of the positive aspects and three main factors-poor system quality, uncompleted information quality and poor service quality-from the negative factors. Separate measures of these six factors were then regressed onto a measure of user satisfaction. The analytical results suggest that eight percent of the variance in user satisfaction can be attributed to differences in the negative aspects of outsourcing and sixteen percent to differences in the positive aspects of outsourcing.

Introduction

The liberalization of global trade has placed Taiwanese companies under unprecedented competitive pressure. Businesses thus must understand how to maintain their competitive advantage and overcome the critical problem of global competition. Information technology adoption offers a means of saving costs and increasing administrative efficiency. Krass (1990) indicated that outsourcing IT services can save 10-50% in IT expenditures. Outsourcing thus has become a basis strategy in the information system field (Akomode et al., 1998) and has recently grown considerably in popularity. IDC (2005) reported that the software outsourcing market has grown from 10% to 12%. Gartner (2008) also described that the global IT services market is expected to exceed $755 billion, with software outsourcing comprising 41%. Furthermore, outsourcing grew from 54.2% to 74.4%) between 2007 and 2008 in large enterprises in Taiwan, and is expected to increase from 55% to 65%> (FIND, 2006). In practice, hospital information system (HIS) is a complex system that needs to be integrated with medical treatment, medical research, administrative processes, financial affairs, accounting, and services to serve outpatients, but few hospitals lack sufficient IT staff to implement it. Software outsourcing thus offers a useful method of building up information systems under limited resource environments.

Although numerous companies are turning to outsourcing to cut costs and improve organization performance, IT services have become a key determinant of outsourcing success. Several construct are used to measure the quality or effectiveness of software outsourcing, including system quality, system usage, user behavior/attitudes, information satisfaction (Ives and Olson, 1984; Zviran, 1992; Ribiere et al., 1999) and SERVQUAL (which includes tangibles, reliability, responsiveness, assurance and empathy in comparing the difference between the expected and perceived.) (Parasuraman et al., 1985, 1988; Zeithaml et al., 1990). Yoon and Im (2008) also proposed an instrument of IT outsourcing customer satisfaction (ITOCS) involving consulting service quality, maintenance and repairing, education, SLA quality, and information quality to test the association with the firm performance.

In fact, previous works indicated that users may have negative mood arising from negative memories or impressions of specific incidents, possibly resulting in a decline in overall satisfaction. Friman et al. (2001) utilized negative critical incidents (NCIs) to explain customer satisfaction with public transport services. In fact, users are unlikely to have a long memory of specific critical incidents, but may accurately judge the frequency of the negative critical incidents (Friman et al. …

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