The evolution of coordination in outsourced software development projects: a comparison of client and vendor perspectives

This paper examines the coordination of outsourced information system (IS) development, focusing on two sets of questions: How are these projects coordinated, and why? How do the coordination mechanisms evolve during a project, and why? Coordination mechanisms were classified into standards, plans, formal mutual adjustment, and informal mutual adjustment. Two studies were conducted, including seven and four cases from vendor and client perspectives, respectively. Based on these cases, the coordination mechanisms used in outsourced IS projects are examined, factors influencing the evolution of coordination mechanisms are identified, and a model of evolution of coordination is developed. The cases also revealed three scenarios for the evolution of coordination (non-coordination, consistent coordination, late coordination). The results show the client as pulling the outsourcing relationship toward a hierarchy structure, characterized by informal mutual adjustment, while the vendor pulls the relationship toward a market structure, characterized by standards, plans, and formal mutual adjustment. Implications for future research and practice are examined.  2002 Elsevier Science Ltd. All rights reserved.