Governance in IT Outsourcing Partnerships

Abstract

The literature first devoted attention to IT outsourcing partnerships in 1990 (Gantz, 1990; Rochester & Douglas, 1990). An IT outsourcing partnership consists of a service recipient and one or more external service providers and the relationship between them. The service recipient hands over the responsibility for the execution of the IT services to the service provider but remains the responsibility for managing the IT outsourcing partnership. The relationship between the service recipient and the service provider is defined in contracts describing the mutual obligations. The contract value of IT outsourcing partnerships is substantial, meaning over 10 million US$ or Euros. These contracts are also long-term contracts. The average duration of contracts is over 36 months (Cox, 2002). This description is based on the work of Lacity and Hirschheim (1993), Willcocks, Fitzgerald and Feeny (1995), and Currie and Willcocks (1998). The IT services outsourcing market is still growing every year, approximately 10% (Cox, 2002). Therefore, it is essential that sufficient attention be devoted to the governance of IT outsourcing partnerships.