Client satisfaction with outsourced IT services: a transaction-cost approach

The quality of outsourced IT services can be traced to attributes of the services such as tangibles, responsiveness, reliability, assurance, and empathy. The relative impact of these attributes on client satisfaction varies across different IT services (applications, data center, EUC support, network administration, and help desk), and one or few attributes stand out as “drivers” of client satisfaction for each service. To understand which attributes drive satisfaction in a service, we characterize five commonly outsourced IT services using dimensions provided by transaction cost economics (TCE): frequency, uncertainty, and asset specificity (Williamson 1975, 1985). We propose that the TCE characteristics of each service determine the drivers of client satisfaction for that service. We present data from a recently-completed survey to test the linkage between TCE characteristics and service quality.