On a Supplier's Paradoxical Practices : The Case of Technological Innovations in Outsourcing Engagements

Outsourcing scholars have studied capabilities required by suppliers to deliver value to their clients. Within the range of supplier capabilities, such as service-orientation, operational efficiencies and quality improvement, there has been little attention given to features that are associated with innovation-driven suppliers. As client firms increasingly seek ways to benefit from technological innovations delivered by suppliers, it is not clear how suppliers cope with such rising demands. This study provides insight into a supplier’s ability to continuously innovate for their clients. We have explored innovation practices at IBM and identified a number of paradoxical practices. We explain this phenomenon by theorizing our findings through the lens of affordances and demonstrate how such practices created innovation affordances within the outsourcing unit. Our study contributes to the growing IS outsourcing literature that aims to understand how innovation could be delivered in ongoing outsourcing engagements, addressing the neglected supplier’s perspective