Collaboration under outcome-based contracts for information technology services

Prakash Awasthy and Jishnu Hazra

European Journal of Operational Research, 2020, vol. 286, issue 1, 350-359

Abstract: The accelerated expansion of markets and intense competition have motivated firms to collaborate closely with vendor firms by outsourcing critical aspects of the business, including Information Technology services. We analyze the interaction between a service provider and a client in which they collaborate to deliver services. We assume that revenue generated from the service depends on their efforts. The client determines retail price and marketing efforts while the service provider decides on quality improvement efforts in the services. We analyze the impact of revenue share proportion on the effort exerted by both firms and the impact of the capability of the service provider on the retail pricing of the service. We develop an analytical framework to characterize the actions of the service provider and the client.

Keywords: OR in service industries; Information technology outsourcing; Service collaboration; Pricing; Quality improvement (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:286:y:2020:i:1:p:350-359

DOI: 10.1016/j.ejor.2020.03.003

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