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Journal of Information Technology

Document Type

Research Article

Abstract

This papers shows that the management of contractual relationships in IS/IT outsourcing is not only receiving greater attention in academic research, but that it has also moved into focus of companies with high outsourcing degrees. This shift of management attention is accompanied by observable changes in IT organizations’ design, revealing an underrepresented but promising research topic. While prior research has predominantly explored single aspects, for example, supplier selection or relationship building, this article takes a more holistic approach on IT supplier relationship management (SRM) with a focus on organizational design. A conceptual framework, covering three core elements of organizational design, strategy, structure and process, guided the multiple case study on IT SRM in five client IT organizations. One key finding from sourcing strategy is that IT organizations have in parts significantly and abruptly reduced their number of suppliers in the last years, a phenomenon typically well known in the automobile industry. With regard to structure, different organizational models are presented, varying upon their degree of centralization and mode of sourcing. The concept of a hybrid (centralized-decentralized) structure, where a central unit fulfills SRM activities, was shown to be the predominant model within our case organizations. Design and potential benefits of this barely examined model are discussed in detail and empirical examples are provided respectively. As a third organizational design component, formal processes and lateral connections are presented as a means to bridge barriers between organizational entities central to IT SRM. Finally, various opportunities for future research are illustrated.

DOI

10.1057/jit.2011.30

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