Determinants of Outsourcing Success in the Financial Industry: The Impact of Importance

Abstract

How does the overall importance of a particular outsourcing deal, as perceived by the provider, affect the quality and, subsequently, the performance of an outsourcing relationship? This work contributes to outsourcing research by investigating the role of relational governance and its drivers for achieving more successful outsourcing relationships. We focus on the impact of a particular contextual variable which describes the importance of the outsourcing deal to the vendor, thereby turning the traditional perspective of resource dependency theory on outsourcing upside down. Using a case study approach, we show the significance of the importance of a deal between an IT outsourcing provider and its client to both the relationship quality and overall outsourcing success. Clients whose relative deal sizes are large compared to the provider's portfolio or who offer a strategic advantage to the provider are more likely to receive sound service quality and have a better IT outsourcing relationship.