Drivers of vendor satisfaction with clients in IT outsourcing relationships

Abstract

This research begins to help us understand the factors that help build the trust between the vendor and client and this is one of the keys to maintaining a long-term relationship between the parties. Both contractual and relationship factors affect the ability of vendors and clients to work together over time. A recent study had demonstrated that relational factors such as trust and information exchange dominated in their ability to explain client satisfaction when compared to contractual factors. In this study we further explore the role of trust and other relational factors such as social control and mutual dependence on vendor satisfaction with the clients. India has established itself has the premier location for offshore outsourcing because of its availability of a skilled talent pool with strong communication skills and English language capabilities Using data collected from 214 vendor firms in the Indian subcontinent, we found that mutual dependence and competence based trust were significant predictors of vendor satisfaction with the client. Social control or the ability to resolve conflicts did not impact satisfaction. We discuss the import of these findings for managing vendor client relationships in the short and long term.