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An Empirical Analysis of the Contractual and Information Structures of Business Process Outsourcing Relationships

Author

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  • Deepa Mani

    (Indian School of Business, Hyderabad 500032, India)

  • Anitesh Barua

    (McCombs School of Business, The University of Texas at Austin, Austin, Texas 78712)

  • Andrew B. Whinston

    (McCombs School of Business, The University of Texas at Austin, Austin, Texas 78712)

Abstract

The emergence of information-intensive business process outsourcing (BPO) relationships calls for the study of exchange performance beyond traditional considerations of the contractual structure that facilitates cooperative intent to include the information structure that facilitates the mutual exchange of information to enact cooperative intent and coordinate actions between the user firm and the service provider. Yet, there has been little analysis of the drivers and performance effects of the information structure of BPO relationships, including its linkages to the underlying contractual structure. This study integrates perspectives in neo-institutional economics and information processing to develop and test the theoretical argument that the extent of use and performance effects of the information structure of the BPO relationship are greater in time and materials BPO contracts than in fixed-price BPO contracts. Survey data on 134 BPO relationships provide empirical support for our hypotheses. The synergistic impact of incentives and information on BPO performance emphasizes that their joint assessment is necessary to enhance the explanatory power of extant theories of organization. This result also has implications for achieving maximum benefits from complex BPO arrangements that are more likely to be characterized by time and material contracts.

Suggested Citation

  • Deepa Mani & Anitesh Barua & Andrew B. Whinston, 2012. "An Empirical Analysis of the Contractual and Information Structures of Business Process Outsourcing Relationships," Information Systems Research, INFORMS, vol. 23(3-part-1), pages 618-634, September.
    • Handle: RePEc:inm:orisre:v:23:y:2012:i:3-part-1:p:618-634
    DOI: 10.1287/isre.1110.0374
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    6. Lacity, Mary & Willcocks, Leslie P., 2017. "Conflict resolution in business services outsourcing relationships," LSE Research Online Documents on Economics 69810, London School of Economics and Political Science, LSE Library.
    7. Emre M. Demirezen & Subodha Kumar & Bala Shetty, 2016. "Managing Co-Creation in Information Technology Projects: A Differential Games Approach," Information Systems Research, INFORMS, vol. 27(3), pages 517-537.
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