University of Oulu

Success factors in IT outsourcing : vendor’s view

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Author: Säntti, Mikko1
Organizations: 1University of Oulu, Faculty of Information Technology and Electrical Engineering, Department of Information Processing Science, Information Processing Science
Format: ebook
Version: published version
Access: open
Online Access: PDF Full Text (PDF, 0.8 MB)
Pages: 53
Persistent link:
Language: English
Published: Oulu : M. Säntti, 2023
Publish Date: 2023-05-12
Thesis type: Master's thesis
Tutor: Kinnula, Marianne
Reviewer: Väyrynen, Karin


The world is getting smaller and thus competition gets fiercer. Therefore, companies are seeking new ways to utilize other companies core competencies by partnering with them. The success of these partnerships is important for both parties. Success factors of an IT outsourcing relationship has been studied quite a bit since the first ones took place in 1990’s. However, due to nature of IT, the outsourcing has been seen cumbersome and thus, it is an appealing topic to investigate. The topic of the thesis was to investigate the definition of success and success factors of an IT outsourcing relationship from vendor’s point of view. Consequently, the research questions are: RQ1: What constitutes a successful IT outsourcing relationship from vendor’s point of view? RQ2: Which factors affect IT outsourcing relationship success from vendor’s point of view?

The research questions are answered based on the literature review and data produced in semi-structured interviews, utilizing qualitative research methods. In RQ1 the data analysis method was deductive. The RQ2 answer is conducted from factors identified in literature review, and the factors that were listed as success factors, from vendor’s point of view, in the interviews are counted as success factors in this study.

RQ1 answer: The successful IT outsourcing relationship from vendor’s point of view is achieved when the pre-set goals are met. The most fundamental goal is to make business. More precisely, the goals usually are mainly monetary, but they can also be related to developing vendor’s capabilities, or other strategic objectives.

RQ2 answer: The success factors identified are communication, trust, strategic partners, governance, contract, competence, culture, and management support as well as personal relationships and chemistry. Combined factors affecting the success are information sharing, business understanding, benefit/risk sharing, interdependence, commitment, coordination, and conflict management, and social competence. The factors might be connected to each other, but their connection and importance depends on the nature and situation of the relationship.

This research is done from vendor’s point of view, even if the literature review is originally done from both parties’ point of view. None of the success factors directly affect the IT outsourcing relationship to be successful. They however improve the likelihood of longer relationship and make the relationship more reliable source of income. The study introduces two new success factors 1) social competence, 2) personal relationships and chemistry. The practitioners should ensure that the goals are defined before entering into the relationship. The vendor should also make sure that the vendors’ personnel interacting with customers have high social competence, as well as production and technology related competence is sufficient, and the contract suits the delivery.

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Copyright information: © Mikko Säntti, 2023. This publication is copyrighted. You may download, display and print it for your own personal use. Commercial use is prohibited.