| As firms increasingly seek to realize organizational benefits from IS outsourcing arrangements, studying the effects of inter-firm level factors becomes crucial, and yet, remains a critical gap in the IS outsourcing literature. Applying two theoretical lenses---the resource-based view of strategic relationships and organizational learning---this dissertation develops and tests hypotheses based on a research model of relationship, governance, outsourcing arrangement, and learning factors, and their potential impacts on application development outsourcing effectiveness, from the client perspective. A field survey of IS managers in client firms responsible for a specific outsourcing arrangement was conducted to test the hypotheses using PLS Structural Equation Modeling techniques. The findings are that client-vendor compatibility is a significant predictor of outsourcing effectiveness. The role of the outsourced IS function and client learning characteristics (learning intent, learning capacity) significantly predict the gains in client knowledge capital. Client knowledge capital gains mediate the link between antecedent (arrangement, learning) factors and outsourcing effectiveness. The results of this study contribute to and extend the growing body of research on IS outsourcing, and provide prescriptive value for practitioners seeking to realize outsourcing effectiveness. |
