Abstract

Contemporary software outsourcing projects increasingly employ continuous contracting, where an umbrella agreement is followed by periodic contracts. Consequently, both contract design and project control become episodic, thereby dissolving the traditional boundary between the two and requiring managers to holistically combine them into cohesive governance configurations, aimed at achieving alignment and flexibility. Despite the growing popularity of continuous contracting, we lack insights into how governance configurations are formed, evolve, and influence project outcomes. We address this gap through a longitudinal, multi-method study of 33 governance episodes across three multi-year software projects executed under a common umbrella agreement. Using thematic analysis, we first identify three dimensions (content, contingency, timing) to capture salient characteristics of both contract design and project control. Applying crisp-set Qualitative Comparative Analysis (csQCA), we then identify eight governance configurations, consistently linked to specific alignment and flexibility outcomes. The narrative analysis revealed these episodic outcomes depend on specific interactions among the governance elements within a configuration—namely, whether they substitute for each other (replacing interactions) or offset their limitations (compensating interactions). It furthermore shows how governance configurations evolve across successive episodes: Initially, managers primarily rely on configurations producing either alignment or flexibility. However, as trust and knowledge increase, the governance repertoire expands, enabling configurations that simultaneously achieve alignment and flexibility through compensating interactions. Managers can thus steer projects more deliberately, thereby enhancing overall project performance. We synthesize these insights into a configurational theory of continuous contracting with important implications for outsourcing governance research and actionable guidance for practitioners.

DOI

10.17705/1jais.00959

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