Cooperative Partnerships and IT Outsourcing: From Contractual Obligation to Strategic Alliance?

This chapter has two primary purposes. The first is to think through the concept of cooperation and its relevance for strategic alliances. The second is to analyze the potential role of information technology in such alliances. Specifically in the latter we focus on examples of “total” IT outsourcing — often cited as forms of “strategic alliance” — to examine the structure of cooperation, the relationships formed, how structure and relationships evolve, and the degree to which they might be sustainable. Here, as in all our chapters, “total” IT outsourcing is taken to be where 80% or more of an organization’s IT budget is spent on third party management of IT assets, people and/or activities to required/agreed results (Lacity and Willcocks, 1998). In the mid-1990s, when an earlier version of this chapter was published, the topic of cooperation in strategic alliances, especially in the specific area of IT outsourcing, was relatively undeveloped in the academic management studies literature. “Undeveloped” refers to a lack of agreement on definitions of fundamental concepts; wide differences in use of terms such as “partnership”, “strategic partnership” and “strategic alliance” and a lack of academically researched case material to work through such problems, as opposed to an uncritical adoption of cases and vocabulary described in trade journals, the press, and business magazines.