Strategic innovation through outsourcing: the role of relational and contractual governance

There is growing evidence that client firms expect outsourcing suppliers to transform their business. Indeed, most outsourcing suppliers have delivered IT operational and business process innovation to client firms; however, achieving strategic innovation through outsourcing has been perceived to be...

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Main Authors: Ilan Oshri, Julia Kotlarsky, Alexandra Gerbasi
Format: Default Article
Published: 2015
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Online Access:https://hdl.handle.net/2134/19761
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spelling rr-article-95013742015-08-18T00:00:00Z Strategic innovation through outsourcing: the role of relational and contractual governance Ilan Oshri (1253901) Julia Kotlarsky (7198553) Alexandra Gerbasi (7197653) Other commerce, management, tourism and services not elsewhere classified Artificial intelligence not elsewhere classified Information systems not elsewhere classified Outsourcing Strategic innovation Quality of client-supplier relationship Fixed-price contract Time and materials contract Joint venture contract Client contract portfolio Survey Information Systems Artificial Intelligence and Image Processing Business and Management not elsewhere classified There is growing evidence that client firms expect outsourcing suppliers to transform their business. Indeed, most outsourcing suppliers have delivered IT operational and business process innovation to client firms; however, achieving strategic innovation through outsourcing has been perceived to be far more challenging. Building on the growing interest in the IS outsourcing literature, this paper seeks to advance our understanding of the role that relational and contractual governance plays in achieving strategic innovation through outsourcing. We hypothesized and tested empirically the relationship between the quality of client-supplier relationships and the likelihood of achieving strategic innovation, and the interaction effect of different contract types, such as fixed-price, time and materials, partnership and their combinations. Results from a pan-European survey of 248 large firms suggest that high-quality relationships between clients and suppliers may indeed help achieve strategic innovation through outsourcing. However, within the spectrum of various outsourcing contracts, only the partnership contract, when included in the client contract portfolio alongside either fixed-price, time and materials or their combination, presents a significant positive effect on relational governance and is likely to strengthen the positive effect of the quality of client-supplier relationships on strategic innovation. 2015-08-18T00:00:00Z Text Journal contribution 2134/19761 https://figshare.com/articles/journal_contribution/Strategic_innovation_through_outsourcing_the_role_of_relational_and_contractual_governance/9501374 CC BY-NC-ND 4.0
institution Loughborough University
collection Figshare
topic Other commerce, management, tourism and services not elsewhere classified
Artificial intelligence not elsewhere classified
Information systems not elsewhere classified
Outsourcing
Strategic innovation
Quality of client-supplier relationship
Fixed-price contract
Time and materials contract
Joint venture contract
Client contract portfolio
Survey
Information Systems
Artificial Intelligence and Image Processing
Business and Management not elsewhere classified
spellingShingle Other commerce, management, tourism and services not elsewhere classified
Artificial intelligence not elsewhere classified
Information systems not elsewhere classified
Outsourcing
Strategic innovation
Quality of client-supplier relationship
Fixed-price contract
Time and materials contract
Joint venture contract
Client contract portfolio
Survey
Information Systems
Artificial Intelligence and Image Processing
Business and Management not elsewhere classified
Ilan Oshri
Julia Kotlarsky
Alexandra Gerbasi
Strategic innovation through outsourcing: the role of relational and contractual governance
description There is growing evidence that client firms expect outsourcing suppliers to transform their business. Indeed, most outsourcing suppliers have delivered IT operational and business process innovation to client firms; however, achieving strategic innovation through outsourcing has been perceived to be far more challenging. Building on the growing interest in the IS outsourcing literature, this paper seeks to advance our understanding of the role that relational and contractual governance plays in achieving strategic innovation through outsourcing. We hypothesized and tested empirically the relationship between the quality of client-supplier relationships and the likelihood of achieving strategic innovation, and the interaction effect of different contract types, such as fixed-price, time and materials, partnership and their combinations. Results from a pan-European survey of 248 large firms suggest that high-quality relationships between clients and suppliers may indeed help achieve strategic innovation through outsourcing. However, within the spectrum of various outsourcing contracts, only the partnership contract, when included in the client contract portfolio alongside either fixed-price, time and materials or their combination, presents a significant positive effect on relational governance and is likely to strengthen the positive effect of the quality of client-supplier relationships on strategic innovation.
format Default
Article
author Ilan Oshri
Julia Kotlarsky
Alexandra Gerbasi
author_facet Ilan Oshri
Julia Kotlarsky
Alexandra Gerbasi
author_sort Ilan Oshri (1253901)
title Strategic innovation through outsourcing: the role of relational and contractual governance
title_short Strategic innovation through outsourcing: the role of relational and contractual governance
title_full Strategic innovation through outsourcing: the role of relational and contractual governance
title_fullStr Strategic innovation through outsourcing: the role of relational and contractual governance
title_full_unstemmed Strategic innovation through outsourcing: the role of relational and contractual governance
title_sort strategic innovation through outsourcing: the role of relational and contractual governance
publishDate 2015
url https://hdl.handle.net/2134/19761
_version_ 1756511749420351488