Abstract
ABSTRACTOrganizations are increasingly adopting environments in which IT is delivered as a service. The relationship between service provider and the customer is managed through contracts or Service Level Agreements (SLAs). This article examines underresearched relationships between contract structure and performance from the point of view of the IT service provider. It develops two mathematical programming models to better understand relationships between workforce characteristics, workflow, contract structure, and the business environment under Managed Service and Hybrid demand conditions. We illustrate how workforce selection, workflow, and contract design decisions can be effectively used to optimize performance. Managerial implications for contracting and operating strategies are discussed.
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