Relationship and Contract Issues of IT Outsourcing – Descriptive Case Studies in China Regions

Abstract

In spite of the continuous increase in IT outsourcing activities globally, a major percentage of outsourcing deals failed or suffered from serious problems. In China regions where IT outsourcing practice is still at its initial stage, the situation is even serious: there lacks systematic guidance in terms of how to negotiate decent contracts and how to develop sound relationships. In view of this, the current research develops a research framework based on the theories in Economics, Management and Marketing fields, and investigates the effects of both relationship and contract on IT outsourcing success. To support the research framework, evidence was collected from two descriptive case studies conducted in Hong Kong and Mainland China. The case analysis implies the dimensionalities of relationship and contract. What is more, IT outsourcing success is mainly evaluated from the technological benefits client company could gain. A significant contribution of this study to theory is to look into IT outsourcing phenomenon with a balanced view and through an integrated theoretical lens. For practitioners, this research removes executives’ doubts about simultaneously employing both relationship (soft side) and contract (hard side) as governance mechanisms in managing IT outsourcing deals.

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