The Role of Client-internal Social Linkages for Outsourcing Success - An SNA Approach

What is the role of a firm’s internal social relations between business departments and IT unit for the success of its IT outsourcing relationship? In this paper, we propose that the relationship between business and IT of a firm is crucial for achieving effective outsourcing management and for enabling the vendor to deliver the services as demanded. Since the business side of the client firm represents the users of the information systems but the IT unit represents the interface to the outsourcing vendor firm, interaction between both units is proposed to be required for maintaining a good outsourcing relationship. Based on a survey in the German Banking Industry and by adopting a Social Network Analysis Approach which captures the interaction structure within the client firm and thus represents an innovative scale to outsourcing research, we show that tight social linkages within the client firm lead to higher service quality achieved by the vendor firm.