Congruent patterns of outsourcing capabilities: A bilateral perspective

Abstract

Despite the extensive proliferation of Information Technology Outsourcing (ITO), firms often obtain unsatisfactory outsourcing outcomes due to the lack of appropriate outsourcing capabilities of a client or their vendor. ITO clients strive to enhance outsourcing performance by establishing their own outsourcing capabilities as well as contracting with capable vendors to meet their strategic needs. Thus, for the success of an ITO project, it is imperative to find an effective combination of complementary outsourcing capabilities on both sides. However, knowledge of how to identify and develop a set of appropriate outsourcing capabilities of both client and vendor has yet to be developed. This study aims to fill this knowledge gap by elaborating on the configurational mechanisms of outsourcing capabilities from a bilateral perspective, which explicate how multiple types of client and vendor outsourcing capabilities combine into configurations simultaneously to produce high ITO performance. First, based on the ITO literature, we develop a conceptual framework that identifies three key types of outsourcing capabilities. Then, with the matched dataset collected from a client and their vendor, we conduct a fuzzy-set qualitative comparative analysis (fsQCA), which is a set-theoretic configurational method to investigate the systemic and holistic interdependencies among key outsourcing capabilities that produce high outsourcing performance. On the basis of the conceptual framework and empirical findings, we present four viable propositions to build configurations of client and vendor ITO capabilities that can achieve ITO success with theoretical and practical implications.