Conflict Resolution in a Multi-level IT-enabled Outsourcing Network: A Structured Solution Approach

Abstract

The case study used is of an IT-enabled services management company SmartKey (Vijaykar & Gupta, 2017), providing services to a global healthcare insurance company GoodHealth2U (both real but renamed companies, for confidentiality purposes) in the fifth year of their offshore outsourcing relationship. The solution was a combination of two technologies - the first was the optical character recognition (OCR) to automate some of the data entry work of loading the information from claimant forms into the company's databases, and the second was a robust workflow management platform that could easily separate and later combine different tasks like data entry, review and claims decision making (called 'adjudication' in insurance). Rise of conflicts in the IT-enabled outsourcing relationships The "trust, power and control" in inter-organizational relationships between the buyer of the outsourcing services and the supplier is examined at length by researchers for several years (Bachmann, 2001), and we now have a well-documented study across different theoretical perspectives like the resource-based theory, resource-dependence theory, transaction cost theory and agency theory - either independently or an a synthesis of many theories (Creon, Grover, & Teng, 2017). By creating these multi-level relationships, Ravindran, Susarla, Mani, & Gurbaxani (2015) argue that firms may mitigate the hazard of ex post transaction costs in long-term contracts by relying on the information available from embedded firms in buyer- supplier network.