Global Sourcing in a Developing Country Context: Organizing IS Resources to Develop Local Knowledge

With the move towards services in developing countries, firms in the financial sector are using global resources to drive new forms of revenue and growth (Forbath & Brooks 2007). In doing so, they are looking beyond their own national borders for partners to help design, develop, and maintain their information systems (Rao 2004). For these purposes, firms are accessing a growing pool of skilled IT professionals around the world in hot spots like India. Earlier research has focused on outsourcing and offshoring (Hirschheim, Heinzl, & Dibbern 2004; Sahay, Nicholson, & Krishna 2003), with less research on the insourcing of information systems (Hirschheim & Lacity 2000). Insourcing or ‘contracting in’, involves the delegation of IT within a business to an internal ‘stand-alone’ entity staffed with specialists, and has significant implications for the organizing of information systems (IS) resources in financial conglomerates. Our study focused on an insourcing strategy adopted by a Jamaican insurance company, which was forced to redesign their information systems to meet the requirements of reinsurers, who provided them with much needed insurance capacity. Jamaica is a developing country known to be vulnerable to natural disasters, and dependent on global insurance and reinsurance for its economic stability and welfare. Throughout the 1990s, a reinsurance crisis ensued due to heavy underwriting losses, and global reinsurers demanded detailed risk information by type and location before offering insurance cover to local insurers. These actions accentuated local insurers' dependence on global reinsurers, and this also led to a number of sectoral level developments including the use of geographical information systems for hazard mapping to improve risk management.