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The Role of Alignment Capability in Strategic IS Outsourcing Success

Strategic Information Systems outsourcing refers to the long term outsourcing of systems with a major transformational impact on the client’s business strategy. Such outsourcing arrangements mitigate risks through closely aligned client and vendor business/IT operational processes and shared strategic vision. Strategic outsourcing arrangements rely on both contractual and relational governance to build inter-firm alignment capability. This research paper defines a multi-item measure of clientvendor alignment capability, and uses that instrument to survey a number of North America based oil and gas exploration and energy producing firms, who have undertaken the outsourcing of strategic information systems to an Indian information systems vendor. The results indicate which elements of contractual and relational outsourcing governance support the building of client-vendor alignment and whether alignment capability improves outsourcing success factors.