Impact of Configuration on IT Outsourcing Relationships

This paper tests four main factors of outsourcing configuration that are believed to contribute to the success and failure of information technology (IT) outsourcing relationships between clients and suppliers. It presents a research model based on the analysis of substantive in-depth interviews with 28 professionals in four pairs of client and supplier organizations. The findings suggest that the strong formation of an outsourcing configuration at the beginning, encompassing outsourcing intent, results of due diligence, contract, and governance factors is crucial to the successful development of a quality relationship between parties, particularly at the operationalization stage. Furthermore, the quality of the relationship between the parties is enhanced, as are the chances of an ultimately successful IT outsourcing arrangement. Thus, organizations seeking to increase their operational excellence and decrease the operational cost of IT outsourcing must put more emphasis on, and take a more planned approach to, configuring their arrangement.