Managing IT Outsourcing Relationships Using Service Level Agreements (SLAs): A Multi-Dimensional Fit Approach

Changes in the current business atmosphere where speed and agility are crucial call for simple outsourcing to evolve into more complex models of IT outsourcing. Change is constant, and nothing is certain, therefore unseen factors such as trust and culture become more important in IT outsourcing arrangements. This research-in-progress examines the role of Service Level Agreements (SLAs) in managing IT outsourcing relationships in order to realize the effectiveness of IT outsourcing strategies under various outsourcing intents and contract environments. A multi-dimensional fit model is developed to illuminate outsourcing arrangements. Further, propositions are tested using partial least squares (PLS). The study provides insight into the development of relational governance through a contractual mechanism over the course of an outsourcing engagement drawing upon relational exchange theory (RET). In this “post-e” era, this study redefines roles and rules for effective outsourcing management and outlines new opportunities for business-aligned IT outsourcing, and creates a new platform for high quality, reliable but agile business-specific outsourcing solutions.