A process explanation of the effects of institutional distance between parties in outsourced information systems development projects

Abstract

Outsourced information systems development (OISD) projects are challenging endeavors, and the literature suggests differences between the parties involved as critical hinderers of such projects. Using institutional theory as a foundational theory, we propose a process explanation of the effects of differences between parties in OISD projects. Our explanation relies on the interaction of four components: (1) the IS development and project management institutional profiles of the parties involved; (2) the institutional distance between practices within these profiles; (3) instances of conflicting institutional demands when institutional distance becomes salient; and (4) the repertoire of institutional strategic responses available to parties to address those instances. We suggest that the constitutive elements of institutional distance and the degree to which parties envision their collaboration beyond the project at hand contribute to explaining the enactment of strategic responses. Accounting for the fact that practices, as well as the institutional logics that drive their enactment, may differ between parties, we make a theoretical contribution to the literature on OISD by building a fine-grained explanation of the effects of differences between parties in OISD projects.

Keywords:

• outsourced information systems development
• institutional theory
• process explanation
• salience of institutional distance
• conflicting institutional demands

Electronic supplementary material

The online version of this article (doi:10.1057/s41303-016-0021-2) contains supplementary material, which is available to authorized users.

Electronic supplementary material

The online version of this article (doi:10.1057/s41303-016-0021-2) contains supplementary material, which is available to authorized users.

Acknowledgments

This work was supported by the Fonds de recherche du Québec – Société et culture (FRQSC) and by the HEC Montréal Chair in Strategic Management of Information Technology. The authors are grateful to the editors for their guidance and to the three anonymous reviewers for their comments and suggestions.

Additional information

Notes on contributors

Gregory Vial

Gregory Vial is an Assistant Professor of Information Technology (IT) at HEC Montreal. He holds an M.Sc. in IT and a Ph.D. in IT from HEC Montreal. His research interests are in the areas of outsourcing, systems development practices and methodologies, and databases. His work has been published in IEEE Software.

Suzanne Rivard

Suzanne Rivard is Professor of Information Technology (IT) at HEC Montreal. Her research focuses on outsourcing, strategic alignment of IT, and software project risk management. Her work has been published in journals such as Journal of Information Technology, Journal of Management Information Systems, MIS Quarterly, Organization Science, and others.