Evolving relationship structures in multi-sourcing arrangements: The case of mission critical outsourcing

Information Technology Outsourcing practice and research mainly considers the outsourcing phenomenon as a generic fulfilment of the IT function by external parties. Inspired by the logic of commodity, core competencies and economies of scale; assets, existing departments and IT functions are transferred to external parties. Although the generic approach might work for desktop outsourcing, where standardisation is the dominant factor, it does not work for the management of mission critical applications. Managing mission critical applications requires a different approach where building relationships is critical. The relationships involve inter and intra organisational parties in a multi-sourcing arrangement, called an IT service chain, consisting of multiple (specialist) parties that have to collaborate closely to deliver high quality services. To better understand the evolution of relationships in such an IT chain, we propose a modelling technique for the structure and evolution of the organizational aspects these relationships. Understanding this structure is relevant in discerning how interactions take place during the lifecycle of the outsourcing relationship. To validate the modelling technique we studied a Dutch provider of Mission Critical Outsourcing services, which is ranked independently as a quality market leader. In two international internet banking environments we analyse the evolution of the inter and intra organizational structure. The contribution of this paper is an approach to understanding the evolution of the organizational structure of collaborative multi-sourcing arrangements. Understanding the evolution of these structures is deemed relevant for the further study of successful high quality multisourcing arrangements.