Trust in Software Outsourcing Relationships: An Empirical Investigation of Indian Software Companies

Abstract

This paper investigates trust in software outsourcing relationships. The study is based on an empirical investigation of eighteen high maturity software vendor companies based in India. Our analysis of the literature suggests that trust has received a lot of attention in all kinds of business relationships. This includes inter-company relationships, whether cooperative ventures or subcontracting relationships, and relationship among different parts of a single company. However, trust has been relatively under-explored in software outsourcing relationships. In this paper, we present a detailed empirical investigation of trust in commercial software outsourcing relationships. The investigation presents what vendor companies perceive about getting trust from client companies in outsourcing relationships. We present the results in two parts—(1) achieving trust initially in outsourcing relationships and (2) maintaining trust in ongoing outsourcing relationships. Our findings confirm that the critical factors to achieving trust initially in an outsourcing relationship include previous clients' reference and experience of vendor in outsourcing engagements. Critical factors identified for maintaining trust in an established outsourcing relationship include transparency, demonstrability, honesty, process followed and commitment. Our findings also suggest that trust is considered to be very fragile in outsourcing relationships.