Service excellence in outsourced IT services: The role of relational governance mechanisms and provider capabilities*

This dissertation is comprised of three essays investigating the impact of relational governance mechanisms and provider capabilities on ITS outsourcing success. The first essay investigates the impact of contractual rewards and penalties on motivating the IT service provider's "trust-like" behaviors. While the results show, for the most part, such ex-ante incentives negatively impact the relationship; the research has shown the importance of "trust-like" behaviors in achieving successful ITS outsourcing relationships. The most interesting non result of this research is that penalties typically used to deter the service provider's opportunistic behavior were not found to do so, and in addition, negatively impacted the service provider's willingness to cooperate.; The second essay takes the service provider's view and investigates the impact of partnership quality and the client's power on the service provider's compliance, cooperation and commitment. The results show that the client's power and the quality of their partnership with the provider motivates the IT service provider to comply with the contractual obligations, cooperate with the client and invest additional resources into the ITS outsourcing relationship.; The third essay investigates the impact of the IT service provider's organizational process and technical capabilities on ITS outsourcing success measures. The results presented show the effect of various organizational process capabilities on two internal performance measures (quality and efficiency) and one external service provider/service receiver neutral measure. In addition, the result indicate that provider capabilities in the form of formal processes and procedures may be a better indication of the IT service provider's ability to provider quality IT solutions rather than their access to superior skills and talents.; *This material is based upon work supported by the National Science Foundation under Grant No. 9907325. Any opinions, findings and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the National Science Foundation (NSF).