Conceptualizing Relational Resources as Critical Factor for IT Outsourcing Success

The relational resources represent key assets for outsourcing success. Achieving full potential in the development and exploitation of relational resources in outsourcing can be understood as occurring in two closely intertwined phases: i. during the choice of the provider; ii. through the governance of the relation that develops over the execution of the contract. The current paper aims to provide conceptual insights into these two phases, as they apply to the particular area of companies’ IT outsourcing. A first objective is to illustrate the role of relational resources in determining the ultimate degree of success in IT outsourcing and to discuss its potential as an “instrument to address risk”. A second objective is to outline managerial criteria for correct choice of the IT provider and for appropriate direction of client-vendor relations over the course of the resulting contract execution. The main findings of this study show that the paradigmatic shift from a transaction-based outsourcing to a partnership-based outsourcing gives centrality to the contract management and on-going management. On this point, relational resources have become a critical factor for IT outsourcing success, and they have to be considered as a tool to address the risks of IT outsourcing. Concerning the managerial implications the main finding is the need to use the “relational requisites” rather than “subjective requisites” in the evaluation and choice of potential IT provider.