Client satisfaction and organizational structure change: A study of it solution provider offshore outsourcing relationships

A problem in organizational transition that is becoming more common in the information systems area is the transition of services from local to off shore support. In recent years this has been extended to the transition of services from one offshore location to another location in a lower cost country. Outsourcing providers are continually seeking to reduce costs by establishing development and operations centers in more low cost countries and reducing the proportion of their staffs physically located with clients. In addition to cost, relationship effectiveness measures are often used to gauge the success of an outsourcing engagement. Strategies for placement of resources based on the results of client satisfaction surveys are becoming more common in outsourcing relationships. A conceptual framework for the evaluation of relationship quality of an outsourcing organization that may be appropriate to the evaluation of offshoring is used in this dissertation. Relationship quality is measured using factors associated with client satisfaction, relationship and delivery effectiveness and used to assess the success of an outsourcing relationship. Using data collected in surveys of long term customers of solution provider organizations this study examines changes in relationship quality factors over time. Measurements are made reflecting on key events during the transition to the new organization through the current state. Dependent variables are measured at the period just before the formation of the new organization, one year after the transfer responsibilities to new delivery center in a lower cost country and finally at the end of the study period. This study seeks to add to theory and practice by confirming the significance of task and structure related variables and factors associated with virtual distributed teams, extending models used to measure outsourcing client satisfaction.