An Information Processing View on Joint Vendor Performance in Multi-Sourcing: The Role of the Guardian

Abstract

This paper examines joint vendor performance in multi-sourcing arrangements. Using an Information Processing View, we argue that managing interdependencies between multiple vendors imposes substantial information processing (IP) requirements on clients. To achieve high joint performance, clients therefore need to possess sufficient IP capacity. We examine how three sources of IP capacity, two internal (i.e., the client's inter-vendor governance and the client's architectural knowledge) and one external (i.e., the guardian vendor), work together in realizing joint performance. Our results show that formal governance and architectural knowledge contribute to joint performance.The guardian vendor contributes to joint performance in settings where the client deploys strong governance but lacks architectural knowledge. This suggests that, contrary to common views in the literature, guardian vendors should not be understood as mediators (or single points of contact) who relieve clients from governance efforts.Instead, guardian vendors are more fruitfully understood as architects, who complement the client's governance efforts by compensating for knowledge gaps. Put simply, client firms should consider using a guardian vendor to compensate for weak architectural knowledge while still maintaining strong formal and informal governance of all vendors.

Bilateral, Collective, or Both? Formal Governance and Performance in Multisourcing

“…This is in line with the way success is conceptualized and measured in most existing IS outsourcing studies (Gopal & Gosain, 2010;Grover et al, 1996;Tiwana & Keil, 2009). Joint performance, defined as the extent to which the combined performance of vendors working on interdependent tasks meets the client's expectations (Oshri et al, 2019), focuses on the overall multisourcing arrangement. We next theorize the effects of bilateral and collective governance mechanisms on these two success variables, and the tensions and synergies that arise when these governance mechanisms are combined.…”

“…At the same time, bilateral governance may provide little direction and incentives for vendors in the multisourcing arrangement to cooperate with each other and resolve interdependencies between tasks, a key feature of a multisourcing setting (Bapna et al, 2010). Conversely, collective governance addresses the relationship between vendors, thus focusing on the vendors' joint performance (Cullen et al, 2005;Naicker & Mafaiti, 2019;Oshri et al, 2019). Clients exercise collective governance, for instance, when they define and monitor procedures for interaction between the vendors or joint outcomes that vendors are expected to produce collectively.…”

“…Clients exercise collective governance, for instance, when they define and monitor procedures for interaction between the vendors or joint outcomes that vendors are expected to produce collectively. Thus, collective governance draws attention to the processes and outcomes of the vendors' collaboration, helping to address interdependencies, resolve conflicts, and thereby achieve high joint performance (Cross, 1995;Cullen et al, 2005;Naicker & Mafaiti, 2019;Oshri et al, 2019). Although collective governance may be less useful for resolving performance issues with individual vendors, it is an important governance mechanism to enhance multisourcing performance, in particular with a view to joint performance (Naicker & Mafaiti, 2019;Oshri et al, 2019).…”

Adaptive cognitive fit: Artificial intelligence augmented management of information facets and representations

“…Social and organizational information processing models address how human intelligences interact, use relationships and leverage technology to make sense of information (Chidambaram, 1996;Gattiker & Goodhue, 2005;Galbraith, 1973Galbraith, , 1974. IS research has used information processing theory for studying the alignment of organizations and their technology architecture (Anandarajan & Arinze, 1998), healthcare information management (Bolon, 1998), analysis of vendor performance (Oshri, Dibbern, Kotlarsky, & Krancher, 2019) information processing in electronic networks (Meservy, Fadel, Kirwan, & Meservy, 2019), impression development (Cummings & Dennis, 2018) and information, feature and social overload (Fu, Li, Liu, Pirkkalainen, & Salo, 2020). However, there is a significant gap in extending information processing theory to explain cognitive fit in the context of big data, analytics and AI due to limitations of judgment and memory, the subjectivity of interim sensemaking (recoding) and the incalculable number of options to manipulate information and its effects (Hills, 2019).…”

Agile Software Development Practices and Success in Outsourced Projects: The Moderating Role of Requirements Risk

“…Finally, this study examined the moderating role of requirements risk but not of other potentially relevant factors such as geographic distance, project size and type, the client's agile culture, and the sourcing design (e.g. multi-sourcing [52], plural sourcing). This remains future research.…”