Relationship and contract issues of IT outsourcing - an empirical study in China

Abstract

Though experiencing remarkable growth, many outsourcing deals failed or suffered from serious problems. The literature has explored either the relationship or contract issues in IT outsourcing success, however, few efforts have been paid to investigate the effects of both relationship and contract on IT outsourcing success from a holistic view. This study develops a conceptual model and empirically tests it through a cross-sectional survey in Mainland China. The data analysis results identify the dimensionalities of relationship, contract and IT outsourcing success. It further proved the causal relationships between these three constructs. Practically, it re-emphasizes the importance of relationship in IT outsourcing success and the fundamental role of contract in developing a sound relationship. It also gives some implications on how to evaluate IT outsourcing success in China, an emerging market for IT outsourcing.