An Empirical Analysis of the Contractual and Information Structures of Business Process Outsourcing Relationships.

Author List: Mani, Deepa; Barua, Anitesh; Whinston, Andrew B.;
Information Systems Research, 2012, Volume 23, Issue 3, Page 618-634.
The emergence of information-intensive business process outsourcing (BPO) relationships calls for the study of exchange performance beyond traditional considerations of the contractual structure that facilitates cooperative intent to include the information structure that facilitates the mutual exchange of information to enact cooperative intent and coordinate actions between the user firm and the service provider. Yet, there has been little analysis of the drivers and performance effects of the information structure of BPO relationships, including its linkages to the underlying contractual structure. This study integrates perspectives in neo-institutional economics and information processing to develop and test the theoretical argument that the extent of use and performance effects of the information structure of the BPO relationship are greater in time and materials BPO contracts than in fixed-price BPO contracts. Survey data on 134 BPO relationships provide empirical support for our hypotheses. The synergistic impact of incentives and information on BPO performance emphasizes that their joint assessment is necessary to enhance the explanatory power of extant theories of organization. This result also has implications for achieving maximum benefits from complex BPO arrangements that are more likely to be characterized by time and material contracts.
Keywords: BPO; contractual structure; coordination;information processing; governance; information structure; outsourcing; performance
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List of Topics

#76 0.240 governance relational mechanisms bpo rights process coordination outsourcing contractual arrangements technology benefits view informal business formal exchange hybrid complementarity flexibility
#93 0.104 performance results study impact research influence effects data higher efficiency effect significantly findings impacts empirical significant suggest outcomes better positive
#244 0.094 structure integration complex business enhancement effects access extent analyzing volatile capture requires occurs pattern enables independent integrative structured decision-making costs
#193 0.093 time use size second appears form larger benefits combined studies reasons selected underlying appear various significantly result include make attention
#274 0.088 outsourcing transaction cost partnership information economics relationships outsource large-scale contracts specificity perspective decisions long-term develop requirements economic association factors hypotheses
#70 0.081 contract contracts incentives incentive outsourcing hazard moral contracting agency contractual asymmetry incomplete set cost client parties examine effort structures double
#170 0.081 information processing needs based lead make exchange situation examined ownership analytical improved situations changes informational examine developed receive perceptions facilitates
#277 0.069 structure organization structures organizational centralized decentralized study organizations forms decentralization processing communication sharing cbis activities appropriate provide identify organizing communications