An empirical study on the source of vendors’ relational performance in offshore information systems outsourcing

Abstract

Despite keen interest in long-term strategic outsourcing and attention to factors affecting outsourcing success, the examination on relational performance, i.e., the difference between a vendor's performance with a particular client and that with its average client base, can be hardly found. This study adopts a relational view to offshore information systems (IS) outsourcing from a vendor's perspective to explore the source of relational performance. Results highlight the importance of client-specific capabilities and trust as a self-enforcing governance mechanism in a vendor's relational performance in terms of service quality. Project management and client-specific capabilities act as substitute for each other in affecting relational service quality. In addition, while trust and learning about client contribute to client-specific capabilities, trust is also positively related to learning about client. These findings enrich our understanding of the source of outsourcing relational performance and contribute to the literatures on vendors’ capabilities in IS outsourcing.