Purpose – The information technology (IT) industry has been continuously expanding. This has resulted in promoting outsourcing of work by clients to vendors. Most of the published research has focussed on when clients should start outsourcing, what to outsource, criteria for vendor selection, etc., however the vendor side of the relationship has been mostly ignored. The purpose of this paper is to delve deep into the vendors’ side and what aspects a vendor needs to consider in order to maintain a good relationship with the clients. Design/methodology/approach – The research design of the paper is to use literature survey to define the components of the client vendor relationship (CVR), identify the parameters impacting the relationship, establish correlation between the independent variables and the dependent variable; subsequently to propose a framework for the CVR. Findings – The findings have been that – communication, technical value addition, knowledge sharing and client vendor adaptability are vital to any outsourcing engagement and if the vendor is able to get good knowledge transfer of the application at hand and the business domain, it can perform better. Vendors, which proactively resolve issues, ensure stable deliveries before time and identify improvements in the software outside the work assigned maintain better relationship. Further a vendor must be adaptable to clients, cultural, time zone differences, should provide a good project manager and be ready to change tools, resources as per client needs. As long as the vendor is able to ensure the above, the stability of the client country and need for information security is not as important to vendors. Research limitations/implications – The study has limitations as it focusses on the vendors’ side and is inclined toward Indian vendors’ perspectives. Future research can include client as well and can be conducted for a different geography. Originality/value – The research work is original and adds value to the IT service outsourcing industry by identifying the parameters which need to be monitored for a sustainable CVR.

Purpose – The information technology (IT) outsourcing has been inexorably growing in spite of its downsides. The main reasons are financial gains and cost reductions, as well as it allows companies to focus on their core selling areas. Within IT outsourcing, offshoring has become a big success because it greatly reduces costs. Countries like India, China and Philippines are attracting a lot of IT outsourcing work. In order to save costs, companies have to work out the best pricing models with the vendors so enable profitability at both ends. The main pricing models prevalent in the industry are Time and Material (TnM) and Fixed Time Fixed Price (FTFP) alternately also referred as Fixed Price. There are various other pricing models now, which are mainly variations of these. The purpose of this paper is to show an empirical comparison between these models from the vendor’s perspective to see which of them has greater acceptability. Design/methodology/approach – The paper is an empirical paper in which literature survey has been done to study various pricing models in the IT service outsourcing industry, on the basis of same, two most used models have been identified, namely, FTFP and TnM, hypothesis were formulated, Likert scale questionnaire was formed. Subsequently data were collected and Wilcoxon signed-rank test was carried out to compare the variables defining the FTFP and TnM models of pricing. In total, 68 firms were targeted and 120 responses were received. The two models were studied against parameters like usage, profitability, risk, deliveries meeting project schedule, good quality code, the pricing model used by respondents’ majority of times and whether either of them lead to increasing costs. Findings – This study has found that TnM is less risky for vendors, more profitable and vendors are able to manage better quality delivery compared to FTFP. Also it has been statistically proven that the pricing models TnM and FTFP do not impact the usage and schedules in any way. These are important findings as there have been no earlier research papers which have compared the pricing models with reference to Indian IT service outsourcing industry. Research limitations/implications – The two major pricing models TnM and FTFP are studied in the paper below. Data were gathered from 68 companies. As per results, TnM is more profitable, less risky, does not lead to increasing cost and produces good quality code as compared to FTFP also it has been statistically proven that the pricing models TnM and FTFP do not impact the usage and schedules in any way. The implications bridge a gap between theory and practice, as theoretically many pricing models exist, however, what are practical applications and justification vis-à-vis different aspects has not been approached statistically so far in the given context. Further research can be done on other variations of pricing models and to establish which one should be the preferred model and in which circumstances. Practical implications – There are major practical implications of the paper as it fills the gap between the theoretical discussions of pricing and identifies and statistically proves importance of various aspects of pricing in practice. Originality/value – The paper is original and adds value in terms of advising the IT service outsourcing companies as to which pricing models to use.

Purpose – The information technology (IT) industry has grown owing to the increase in IT outsourcing prompted by the need for cost reductions in organizations. The IT industry contracts are based on pricing models, which establish the terms and conditions of payment to be made to vendors by clients. The pricing models followed in the industry are mainly Fixed Time Fixed Price (FTFP) and Time and Material (TnM) and the remaining are mostly variations of these. Using the information collected from vendors, the purpose of this paper is to draw a comparison between these pricing models to see which one is more acceptable to vendors along with researching on the reasons behind that. The outsourcing engagement is also based on a set of processes to be used during the contract time and that is known as the Outsourcing Model (OM) being used. This research also derives how pricing models, OMs and Client Vendor Relationship (CVR) being developed are related. Design/methodology/approach – Hypothesis have been formulated on the basis of the literature survey conducted by the authors, subsequently questionnaire was formulated and data were collected from – a total of 500 people were targeted, out of which 70 people responded. Out of these 70 only 50 were usable responses. The respondents were at the manager and above level in different organizations classified on the basis of number of employees. Statistical tests were conducted on these data to check the reliability, prove the hypothesis and establish the mediation and moderation relationships between the pricing model, OM and CVR. Findings – The following paper has established through statistical analysis which pricing model is more befitting to the IT service outsourcing industry and has also demonstrated the moderation and mediation relationship between pricing model, OM and CVR variables. Research limitations/implications – The major reserach limitation is that it is for only IT vendors in Indian geography. The research can be extended to different businesses and geographies. Practical implications – The paper has practical implications for the IT service outsourcing industry in India and for their clients to understand the comparison between the pricing models and to study the impact of pricing and OMs on the CVRs. Originality/value – The research presented is original as no similar work has been found to be published in the journals so far specifically in the Indian context.

Information Technology (IT) is an ever-growing industry. It, therefore, becomes imperative to understand what it entails, the key parties involved, and their relationship, along with the various risks involved. This chapter aims to delve into the underlying concept of service in the IT industry, the service receiver (client) and the service provider (vendor), which are the key parties, and the risks involved by taking a look at the main prevalent outsourcing models. Further, it nails out the major factors that can contribute in building a lasting relationship between the client and vendor. Through extensive literature review, it is observed that several studies have focused on the risks faced by service receivers, but there are very few that mention the risks that service providers also face. This chapter examines both aspects and aims to uncover the risks that service receivers and service providers face in outsourcing engagements. In addition, many articles talk about factors involved in building client-vendor relationship; however, they lack a comprehensive list of factors that, if taken care of, can lead to successful client vendor engagements. This chapter gives a comprehensive view of the main aspects of the IT industry covering the concept of service in IT Industry, the key parties, and the risks along with aspects that build into successful client vendor relationships.