Single-Sourcing vs. Multisourcing: An Empirical Analysis of Large Information Technology Outsourcing Arrangements

Single-Sourcing Versus Multisourcing: An Empirical Analysis of Large Information Technology Outsourcing Arrangements Policy Abstract As the information technology (IT) services landscape matures, clients are increasingly adopting multisourcing arrangements that involve multiple vendors. Although a large body IS literature addresses issues whether to outsource (to single vendor), what types contracts use, and how achieve optimal relational governance, little is known about antecedents consequents versus decision. Moreover, although conceptual analytical models single-sourcing have been developed, there no empirical research using large-scale data set with rigorous econometric analysis examines in IT context. This paper fills this void, transaction cost economic lens 49,057 outsourcing spans industries dates back 25 years. For managers who plan multisource arrangements, provides guidance minimize exchange hazards through better understanding relationship between sourcing choice, client capabilities, competitiveness vendor landscape, number an arrangement. We provide evidence choice material performance contracts, as incorrect likely result negative contract outcomes.