Vendor capabilities and outsourcing success: A resource-based view

Outsourcing is a generally accepted method for fulfilling an organization's information systems (IS) needs. A prominent motive for outsourcing is a desire to increase the organization's access to high-quality information technology and expertise. There is, however, little research that examines the connection between vendor capabilities and customer satisfaction. This paper addresses that gap by using the resource-based view of the firm to investigate linkages-between vendor capabilities, IS quality, and customer satisfaction. A survey was completed by managers of outsourcing customer firms. The results were analyzed using Partial Least Squares (PLS). The results indicate that customers evaluate a vendor primarily:in terms of technological capabilities, followed by relationship management capabilities. The vendor's understanding of the customer's business was not considered to be significant. There is a significant connection between the vendor's capabilities and the quality of the IS function, which in turn was related to customer satisfaction.