Contract renewal decisions in IT outsourcing: “Should I stay or should I go”

Research output: Contribution to journalArticlepeer-review

Abstract

Increasingly, outsourcing companies decline to renew their contracts automatically at the end of their duration. They send out requests for proposal instead, and may select a new provider for their IT services. The costs of selection and knowledge transfer processes are substantial, however. Service delivery continuity is also under pressure when a transfer to a new provider is made. We analyze the contract renewal decision for application management at a service provider. The findings are useful for outsourcing companies facing contract renewal decisions. We find that in the current, increasingly mature outsourcing market, qualitative factors are considered most important in deciding contract renewal versus switching supplier, for outsourcing companies are now well capable of negotiating a market-conform price.
Original languageEnglish
Pages (from-to)47-55
Number of pages9
JournalJournal of Information Technology Management
Volume22
Issue number4
Publication statusPublished - 1 Oct 2011

Keywords

  • case study
  • contract
  • contract renewal
  • coordination costs
  • IT outsourcing
  • service provider
  • Transaction cost theory

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