Partnership Outsourcing Evolution - The Process of Creating and Maintaining a Network of Actors

This paper is an attempt to build on and extend existing outsourcing research by focusing on the process of managing an outsourcing partnership. Furthermore, it considers the role of information technology and the importance of establishing interorganizational trust in order to provide a deeper understanding of the partnership outsourcing phenomenon. The outsourcing partnership in focus in this paper is between Alpha Corp., a large minerals group, and RDC, its remote service provider. The paper shows that Alpha Corp.’s strategy for creating, maintaining and evolving the partnership with RDC occurs in three different stages: black-boxing of technology, establishing interorganizational trust, and performance based contracting. This study provides support for McFarlan and Nolan’s (1995, p. 22) claim that “What determines success or failure is managing the relationship less as a contract and more as a strategic alliance”. However, given the multiple roles information technology assumes in an outsourcing alliance, this paper also shows that understanding and managing the role of IT is just as crucial in maintaining a successful partnership. In addition, given the documented importance of information technology in outsourcing partnerships, there is a need to include trust in technology as yet another dimension in establishing interorganizational trust.