An empirical investigation of the antecedents of value co-creation in B2B IT services outsourcing
Authors: Murthy Chebiyyam , Padhi Sidhartha S. , Gupta Narain , Kapil Kanwal 
Published: May 2016

Purpose

– The purpose of this paper is to conduct empirical investigation of value co-creation phenomena in IT services outsourcing. This survey based research enabled to identify antecedents of value co-creation and their impact on value outcomes.

Design/methodology/approach

– This empirical study identifies 25 drivers of value co-creation in IT outsourcing services. These drivers were identified from reported literature and by studying IT project reports. The data were collected from client and supplier organizations followed by verification of the drivers (using PCA and CFA methodologies) that contribute significantly to value co-creation in the IT services outsourcing domain. Furthermore, using SEM and linear regression, the authors have verified the strength of their relationships with value co-creation.

Findings

– This research is subjected to exploratory factor analysis, which resulted in six antecedents of value co-creation in IT services outsourcing. These antecedents include alliance relationship, strategic intent, service actualization, intrapreneurship, collective capabilities, and resource management. The alliance relationship, strategic intent, service actualization, and intrapreneurship are found to be significant for value co-creation. While collective capabilities as a standalone was not significant, the relationship of collective capabilities to value co-creation has achieved significance under the influence of alliance relationship, strategic intent, and other antecedents – when tested and hypothesized through the SEM path model.

Research limitations/implications

– The research has the following limitations. The antecedents identified are contextual. The potential illustrative, but not exhaustive reasons, for the change of the context may be due to contract duration, age of the project, relationship maturity, expected value outcome from both the parties, etc. The drivers identified in this research are applicable only to IT services (IT and ITES outsourcing). They cannot be generalized to other B2B outsourcing relationship. The authors propose the conducting of separate research to identify the priorities of these antecedents for different types of outsourcing as well different types of value outcomes.

Practical implications

– This study has added to the knowledge on value co-creation in IT services outsourcing relationships through empirical modeling. From the perspective practitioners of IT industry, this work brings rich information of what are the drivers to value co-creation and their significance on value outcomes in IT services outsourcing. It can provide guidelines to both clients and service providers of similar industry to assess their current practices for value co-creation and re-prioritize their activities and budgets based on the significance of value based benefits. Moreover, practitioners in the IT services industry can use these value drivers and understand the antecedents for value co-creation. As this work is from a dual perspective, both clients and suppliers can assess the applicability of these drivers and antecedents and adopt them to realize mutual value.

Originality/value

– In the past, researchers have focussed on value after it was created and shared among the respective relationship partners, and very few emphasized the need for proactive identification of the antecedents of value co-creation. Researchers have emphasized on the need for an empirical approach, because most of the published studies are theoretical and conceptual in nature. Hence, the significant contribution of this empirical study is to validate the value co-creation drivers identified from literature and qualitative study (case studies) with IT industry practitioners (no. 256) across the globe and the relevance of antecedents to B2B IT services outsourcing body of knowledge.