Determinants of Outsourcing Success in the Financial Industry: The Impact of Importance Stefan Blumenberg E-Finance Lab Goethe University, Frankfurt, Germany stefan@wiwi.uni-frankfurt.de Daniel Beimborn Chair of Information Systems and Services University of Bamberg, Germany daniel.beimborn@uni-bamberg.de Sebastian F. Martin E-Finance Lab Goethe University, Frankfurt, Germany smartin@wiwi.uni-frankfurt.de Branimir Brodnik microfin GmbH Frankfurt, Germany b.brodnik@microfin.de Clemens Gunne microfin GmbH Frankfurt, Germany c.gunne@microfin.de Stefan Wendt microfin GmbH Frankfurt, Germany s.wendt@microfin.de Abstract How does the overall importance of a particular outsourcing deal, as perceived by the provider, affect the quality and, subsequently, the performance of an outsourcing relationship? This work contributes to outsourcing research by investigating the role of relational governance and its drivers for achieving more successful outsourcing relationships. We focus on the impact of a particular contextual variable which describes the importance of the outsourcing deal to the vendor, thereby turning the traditional perspective of resource dependency theory on outsourcing upside down. Using a case study approach, we show the significance of the importance of a deal between an IT outsourcing provider and its client to both the relationship quality and overall outsourcing success. Clients whose relative deal sizes are large compared to the provider´s portfolio or who offer a strategic advantage to the provider are more likely to receive sound service quality and have a better IT outsourcing relationship. Keywords: importance, relationship quality, outsourcing success, IT outsourcing. 1. Introduction There is general agreement in outsourcing literature that contractual governance is necessary but not sufficient for a successful outsourcing partnership [50]. This is why various research works have tried to shed light on a complementary element of contractual governance, called relational governance, relationship management or similar [53]. Relational governance is the predominant governance mechanism associated with exchange performance [21]. The aim of relational governance is to raise the quality of the relationship between outsourcer and service provider as a means for achieving a more successful outsourcing relationship [50]. Thus, relationship quality is an important measure by which the performance of relational governance may be assessed [38]. So far, most research on relationship quality has treated this element quite superficially as a single- dimensional construct and has failed short to clearly differentiate between dimensions of relationship quality and its drivers. However, there are two notable exceptions [24, 38], which specifically differentiate between drivers and dimensions of relationship quality. They will serve in the following as a basis for our work. As for the drivers of relationship quality, there are even fewer works that focus on those antecedents of relationship quality. Most of these approaches focus on variables which describe the interaction between client and provider (i.e. communication, conflict resolution, coordination, cooperation, and integration) [24, 31, 38]. Some other articles show the positive impact of contractual governance on the relational elements of an IT outsourcing arrangement [50]. All these research approaches are valuable for understanding the factors that lead to a good relationship quality. However, current literature on relational governance disregards a central determinant of relationship quality: the so- called contextual factors [18, 51]. In their review of sourcing literature, Dibbern et al. conclude that IS sourcing is an ongoing decision process, which is influenced by changing contextual factors and environmental forces [14]. Proceedings of the 42nd Hawaii International Conference on System Sciences - 2009 1 978-0-7695-3450-3/09 $25.00 © 2009 IEEE