The Client and Service Provider Relationship in IT Outsourcing Project Success: The Moderating Effects of Organizational Attitudes on Knowledge Sharing and Partnership Quality

Introduction

Knowledge sharing (KS) is more prevalent in inter-organizational projects, especially in high-end information technology (IT) projects, where clients and service firms need to exchange knowledge to ensure project success (Zimmermann et al., 2018). Knowledge sharing largely depends on the organizational environment, and thus, its processes and the attitudes of supplier firms towards it are different from those of client firms. Organizational attitude determines the degree of partnership, which ultimately serves as a key predictor of outsourcing project success. This study contributes to the existing literature on information technology (IT) outsourcing by exploring the role of organizational attitudes towards KS. Knowledge-embedded IT outsourcing requires KS between supplier and client firms. This is also an opportunity for suppliers to learn from client firms and have positive organizational attitudes to understand detailed project knowledge to make it successful.

The outsourcing of IT-related tasks has become a common practice for modern firms in a number of industries, as they are confronted with higher levels of complexity and uncertainty. It has allowed them to focus on performing their core activities while delegating their non-core IT functions to third parties (Kern & Willcocks, 2002). Grover et al. (1996) defined IT outsourcing as “a strategy for acquiring IT services from external service providers” (p. 91). Offshore IT outsourcing—relates to a partnership between a client and service provider in which the latter is located outside the client firm’s home country. Many researchers have evaluated the strategic outsourcing relationship where both parties share their views and learn from each other (Bapna et al., 2016; Bates & Khasawneh, 2005; Kim, Nan, Kim, & Park, 2021; Mohiuddin et al., 2019).

As companies’ business activities expand, they seek to achieve salient objectives with the help of individuals and organizations with technical expertise that exceeds their own (Hanafizadeh & Zareravasan, 2020; Lacity et al., 2010). To this end, an increasing number of firms have outsourced their IT business functions to external service providers (Chang et al., 2017). Although these outsourcing practices have largely been successful thus far, their continued growth and success depend on a number of factors. In the past, companies sought to secure cost-effective access to personnel with specialized skills and the growth of IT outsourcing resulted from consistent successful alliances between service providers and receivers, as well as the skill with which they shared organizational knowledge (Blumenberg et al., 2009; Rottman, 2008). The success of the projects mostly relies on how effectively and efficiently service providers and clients share their knowledge (Chang et al., 2017). Such a collective knowledge-sharing process not only facilitates the development of a shared mental model, but also helps to build complementary resources through KS. The influence of knowledge on organizational success has motivated substantial investigation into effective KS methods in IT outsourcing. Effective knowledge sharing between IT clients and suppliers is largely contingent on the former’s attitude towards KS. Although many studies on knowledge sharing have focused on intra-organizational knowledge sharing (Al-Emran et al., 2018; Chang et al., 2017), we seek to explore inter-organizational knowledge sharing.