Abstract
The primary purpose of this study is to investigate the factors contributing to the success and failure of IS outsourcing relationships between client firms and vendors. The proposed research model is based on the relational exchange theory, communication behavior, and transaction cost theory. A survey study of 207 IS outsourcing relationships of U.S. firms indicates that (1) vendor capability, solidarity, continuity expectation, flexibility, and monitoring of the vendor are positively related to the success of IS outsourcing relationships, and that (2) role integrity and asset specificity are negatively related to the success of IS outsourcing relationships. The findings suggest that a strong formation of relational exchange attributes, as opposed to discrete exchange, is essential to successful implementation of IS outsourcing.
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