Year
2025
Authors
HUBER Thomas, LYYTINEN Kalle
Abstract
Contemporary software outsourcing projects increasingly employ continuous contracting, where annumbrella agreement is followed by periodic contracts. Consequently, both contract design and projectcontrol become episodic, thereby dissolving the traditional boundary between the two and requiringmanagers to holistically combine them into cohesive governance configurations, aimed at achievingalignment and flexibility. Despite the growing popularity of continuous contracting, we lack insightsinto how governance configurations are formed, evolve, and influence project outcomes. We addressthis gap through a longitudinal, multi-method study of 33 governance episodes across three multi-yearsoftware projects executed under a common umbrella agreement. Using thematic analysis, we firstidentify three dimensions (content, contingency, timing) to capture salient characteristics of bothcontract design and project control. Applying crisp-set Qualitative Comparative Analysis (csQCA), wethen identify eight governance configurations, consistently linked to specific alignment and flexibilityoutcomes. The narrative analysis revealed these episodic outcomes depend on specific interactionsamong the governance elements within a configuration—namely, whether they substitute for each other(replacing interactions) or offset their limitations (compensating interactions). It furthermore showshow governance configurations evolve across successive episodes: Initially, managers primarily relyon configurations producing either alignment or flexibility. However, as trust and knowledge increase,the governance repertoire expands, enabling configurations that simultaneously achieve alignment andflexibility through compensating interactions. Managers can thus steer projects more deliberately,thereby enhancing overall project performance. We synthesize these insights into a configurationaltheory of continuous contracting with important implications for outsourcing governance research andactionable guidance for practitioners.
HUBER, T. et LYYTINEN, K. (2025). Continuous Contracting in Software Outsourcing: Towards A Configurational Theory. Journal of the Association for Information Systems, 26(6), pp. 1651-1680.