An Empirical Study Of The Factors Influencing IT Outsourcing Performance From The Dynamic Capability Perspective

With the wave of information technology innovation and economic globalization, as the new trend of international industrial transfer, IT offshore outsourcing has been seen the new measure of the industries in the world to enhance performance. Because of the transregional business of IT offshore outsourcing, outsourcing performance faces the threat of more dynamic factors. So the research on the antecedents of outsourcing performance has attracted the attention of both theoreticians and practitioners in recent years. While much has been done by researchers from client’s viewpoint, the vendor’s perspective has been largely scarce. As one of the most important participants, the behavior of the vendor is equally important to meet or exceed targeted outsourcing performance.In this study, we explored the factors that influence IT offshore outsourcing performance from the vendor’s perspective, we proposed and tested the vendor’s dynamic capabilities—process quality—outsourcing performance theoretical framework to understand the antecedents of outsourcing performance and their influence mechanism. Firstly, we identify the dimension of the vendor’s dynamic capabilities:organizational learning capability, innovation capability, and the flexibility of IT infrastructure, as the independent variables. Process quality as a mediating variable, was measured by partnership quality, service quality, and deliverable quality. Outsourcing performance as the dependent variable was measured by operational performance, strategic performance, and satisfaction. We proposed ten research hypotheses based on analyzing the prior literatures. Through the survey, we collected412valid questionnaires from IT outsourcing vendor companies in Dalian Software Park, then data reliability and validity, the model and hypotheses were tested.The empirical study results showed that organizational learning capability, innovation capability, the flexibility of IT infrastructure, and process quality influenced outsourcing performance significantly. Moreover, process quality played a significant mediate role:It fully mediated the relationship of organizational learning capability and outsourcing performance, and partly mediated the relationship of innovation capability, flexibility of IT infrastructure and outsourcing performance. This study also found that the impact mechanism between three capabilities and outsourcing performance were different:The overall positive impact between flexibility of IT infrastructure and performance was the strongest, including direct positive impact and indirect positive effect; the second was the positive impact between organizational learning capability and performance, the direct impact wasn’t significant, mainly depended on the indirect positive impact of process quality; the last is the overall positive impact between innovation capability and performance, including direct negative impact and indirect positive impact, the overall impact was positive. Finally, the suggestion about how to enhance the vendor’s dynamic capabilities, control process quality, build organizational learning mechanisms, innovate reasonably, and improve resources utilization rate were proposed to improve the outsourcing performance of vendor company.