Lateral Coordination Mechanisms and the Moderating Role of Arrangement Characteristics in Information Systems Development Outsourcing
Authors: Balaji, S.; Brown, Carol V.
Journal: Information Systems Research (2014)
<jats:p> Although increased information systems (IS) development outsourcing is the trend, many of these arrangements fail to meet client expectations. We take a coordination perspective and adopt an information processing lens used by prior organization theorists to conceptualize sets of formal structural and informal nonstructural mechanisms, and predict their positive impacts on the strategic IT benefits achieved by the client. Utilizing a strategic alliance lens, we also predict that two characteristics of the client-vendor arrangement will moderate the impacts of both sets of coordination mechanisms. We test our hypotheses using hierarchical regression techniques on field survey data collected from 141 IS managers in client firms, responsible for IS development outsourcing arrangements. We found that the implementation of both structural and informal mechanisms positively impact the client’s strategic IT benefits. In arrangements with greater resource provisioning by the vendor, the positive impacts of informal governance mechanisms are strengthened. In arrangements with higher values similarity, the positive impacts of structural governance mechanisms are strengthened, but t…