Contractual Specification of Communication Tools in Outsourced ISD Projects.

Technical and organizational complexity of outsourced information systems development (ISD) projects calls for increased attention to communication, governance and control. Contract management and client-vendor relationships are both well studied but rarely analyzed together. Earlier studies suggest combining formal (i. e., agreed upon upfront and contractually specified) and informal (i. e., voluntary and emerging during the project) communication mechanisms for best results. This study investigates "formalization" of communication by comparing the usefulness of communication tools specified in outsourcing contracts and tools selected by other means. Using survey responses from 389 IT project managers, we analyze communication mechanisms' effectiveness across four categories of contract provisions, and compare the perceptions of project participants regarding contractually specified vs. emergent communication tools. Our results confirm that specifying communication tools in the outsourcing contract for complex knowledge intensive projects supports the main contract provisions, and, in turn, leads to better project outcomes.