The Impact of Firm Learning on Value Creation in Strategic Outsourcing Relationships

The influence of PRINCE2 standard on customer satisfaction in information technology outsourcing: an investigation of a mediated moderation model

Purpose

The purpose of this paper is to explore the influence of PRINCE2 (PRoject IN Controlled Environments 2) standard on customer satisfaction jointly with vendor relationship management capability in the information technology outsourcing (ITO) context. This paper further tries to explore the above underlying mechanism by studying the mediating effect of deliverable quality.

Design/methodology/approach

This paper develops a mediated moderation model to explain the underlying influence processes of PRINCE2 standard, vendor relationship management capability and deliverable quality on ITO customer satisfaction. By conducting a pair-wise survey of 260 project managers in seven Iranian firms, the model and hypotheses are empirically tested with the partial least squares method.

Findings

Our results suggest that firms benefit more in terms of IT costs reduction when they have a higher level of complementary investment in an external standard, especially through an interplay effect of the external standard and internal relational aspect. Firms can make business processes more amenable to outsourcing and facilitate monitoring of vendor performance and effective coordination with vendors. More interestingly, we find that this interactive effect is fully mediated by deliverable quality, which, in turn, directly increases ITO customer satisfaction.

Originality/value

This study adds some new knowledge and provides new views to study ITO customer satisfaction by addressing the importance of PRINCE2 standard. This study further enhances our understanding in terms of the underlying pathway through which the PRINCE2 standard jointly affects customer satisfaction with vendor relationship management capability and deliverable quality. With the effort of explicitly explaining the complex mechanisms, this study helps ITO managers proactively escort outsourcing activities and projects.

Resource co-specialization in outsourcing of enterprise systems software

Purpose

Enterprise systems are commonly implemented by firms through outsourcing arrangements with software vendors. However, deriving benefits from these implementations has proved to be a challenge, and a great deal of variation has been observed in the extent of value generated for client and vendor firms. This research examines the role of co-specialization as a strategy to make the most out of outsourced enterprise systems. The authors develop hypotheses relating resource co-specialization with two indicators of success for implementation of enterprise software: (1) exchange success and (2) firm growth.

Design/methodology/approach

The hypotheses are tested using a unique panel data set of 175 firms adopting Advanced Planning and Scheduling (APS) software, a type of enterprise system used for managing manufacturing and logistics. The authors identify organizational factors that support co-specialization and then examine how co-specialization is associated with enterprise software implementation success, controlling for the endogenous choice to co-specialize.

Findings

The empirical results suggest that resource co-specialization is positively associated with implementation success and that the two resource co-specialization pathways that are examined complement each other in providing performance benefits.

Originality/value

This paper contributes to the research literature on outsourcing. The study also provides a new empirical test using a unique data set of 175 firms adopting APS Software.