Human Capital and Technology Factors in IT Outsourcing Success: A Socio-Technical Perspective

Abstract

In today’s fast-evolving digital landscape, the success of IT outsourcing projects depends not only on cost and contractual terms but on the effective integration of people and technology. This study adopts a socio-technical systems perspective to examine how human capital and technology factors jointly shape outsourcing outcomes. Socio-technical theory emphasises that organisational performance is optimised when the social and technical subsystems are developed in harmony—a principle highly relevant to complex IT/ITES outsourcing environments. Drawing on responses from 180 professionals in the Indian IT/ITES sector, the research applies structural equation modelling (SEM) to evaluate both the direct and combined effects of human capital and technology enablers on outsourcing success. Human capital is assessed through dimensions such as technical expertise, efficiency in knowledge transfer, and innovation capability, while technology factors encompass IT infrastructure quality, integration effectiveness, and adaptability to new platforms. The results confirm that both human capital and technology significantly enhance outsourcing success, with human capital showing a marginally stronger direct effect. Crucially, the analysis reveals that technology’s positive impact is magnified when paired with strong human capital, demonstrating the synergistic nature of the two domains. The study advances outsourcing research by integrating human and technology perspectives into a unified socio-technical framework. For practitioners, it underscores that technology investments alone are insufficient; they must be complemented by skilled personnel, effective knowledge management, and adaptive organisational practices. This alignment of human and technological capabilities offers a pathway to sustained performance gains and competitive advantage in increasingly dynamic outsourcing contexts.