Managing change in IT outsourcing arrangements

Abstract

Few studies in the field of IT outsourcing relations include the view of providers. Previous research has identified the lack of sustainability in service performance as a recurring problem, e.g. the continuous delivery of high quality services over time. It can be argued that IT outsourcing providers who manage to establish a dynamic fit between sourcing capabilities and their own organizational structure are less susceptible to changes in their clients’ environment. Moreover, IT providers who monitor their clients’ developments are expected to be able to adapt to changing client circumstances and realize a sustainable performance. This research is based on both qualitative and quantitative exploratory research. Three provider organizations were selected: a domestic provider, an offshore provider, and a global provider. To conclude, our case studies provided sufficient evidence that a fit between sourcing capabilities and organizational structure contributes to a positive sourcing performance. Our research revealed that providers that are able to adapt to changing client circumstances, while establishing a fit at the same time, succeed in achieving a sustainable performance. Since the provider-side of IT outsourcing arrangements is under-researched our study contributes to partially filling this gap. From a managerial perspective, our results suggest that monitoring and assessing changing client circumstances regularly are a prerequisite for providers to become an agile organization.