How to Manage Control and Relationships. A case study within IT outsourcing

Abstract: Many authors argue that an increasing number of companies choose to outsource their IT operations. It is an approach to obtain efficiency and access external resources. Further, outsourcing creates relationships, and since the outsourced operations not are internal is the question to what extent control is needed. The purpose of this thesis is to explore how IT outsourcing can be managed in order to enhance an understanding of how a company manages control and relationships with companies providing operations. We question how a company manage its IT outsourcing in terms of control and relationships, and how control and relationship cohere depending on the company’s management of IT outsourcing. In order to answer the purpose, we have studied how IT outsourcing is managed in AB SKF. How IT outsourcing is managed has further been studied from a supplier perspective, thus two supplier companies has been studied. This case study was accomplished by a qualitative method, in which interviews were used. The results were discussed in relation to the theoretical framework, and the relationships, between SKF and the two suppliers, were compared and discussed in the context of relationships and control. Our result and conclusion indicates what companies in similar situations should consider in order to manage IT outsourcing in terms of relationships and control. This thesis concludes that a relationship is essential in IT outsourcing, and there is to some extent a constant need to control the outsourced operations in order to manage IT outsourcing. Further, there is proven cohesion between management of control, and management of relationships. The need to control and to have a relationship within management of IT outsourcing also has shown cohesion with trust. The thesis further concludes that it is recommended to manage IT outsourcing with a combination of relationship and control, since these two factors compensate each other. Finally, the most important within management of IT outsourcing is concluded to be a balance between relationship and control.