Fall 1997: IT Outsourcing: Managing Customer-Supplier Relationships

Speaker:

Mary Lacity, Assistant Professor of MIS at the University of Missouri-St. Louis

Synopsis

In the context of information technology outsourcing, there has been a great debate as to the nature of the customer-supplier (i.e., client-consultant or customer-vendor) relationship. Are they partners? Are they adversaries? Successful relationships in IT outsourcing are primarily the responsibility of the customer. The customer must understand which type of contracting relationship to pursue, then follow best practices associated with that type of relationship. In this presentation, three types of customer-supplier relationships are presented: buy-in relationships, exchange-based relationships, and strategic relationships. The preferred relationship primarily depends on the characteristics of the IT activity to be outsourced, not on soft characteristics such as "cultural compatibility." Characteristics of the IT activity include level of certainty of the requirements, measurability of results, and level of integration with other business processes. For each relationship type, the best practices associated with contract negotiation and post-contract management are presented.

Speaker: Mary Lacity

Mary Cecelia Lacity is an Assistant Professor of MIS at the University of Missouri-St. Louis and a Research Affiliate at Templeton College, Oxford University. Her research interests focus on IT management practices in the areas of sourcing, IT privatization, benchmarking, IT metrics, and client/service development. She has written two books with Rudy Hirschheim, Information Systems Outsourcing: Myths, Metaphors, and Realities (Wiley, 1993) and Beyond the Information Systems Outsourcing Bandwagon: The Insourcing Response (Wiley, 1995), and edited a book with Leslie Willcocks, Strategic Sourcing of Information Systems (forthcoming, Wiley in 1997). Her articles have appeared in the Harvard Business Review, Sloan Management Review, Journal of Management Information Systems, Journal of Strategic Information Systems, Information Systems Journal, and European Journal of Information Systems. She is US Editor of the Journal of Information Technology. She has worked as an independent consultant, a consultant for Technology Partners, and a systems analyst for Exxon.