Forced coopetition in IT multi-sourcing

•Uncovers and conceptualizes a novel form of coopetition (forced coopetition).•Uses ‘forced’ coopetition to describe vendor relationships in IT multi-sourcing.•Identifies factors enabling clients to foster high vendor competition and cooperation.•Identifies factors for clients to manage the tensions resulting from forced coopetition.•Proposes a multi-sourcing model classification framework.

IT multi-sourcing refers to the managed delegation of IT projects and services to multiple vendors. While companies increasingly engage in multi-sourcing arrangements, theoretical insights into this important phenomenon are scarce. Drawing on the coopetition and multi-sourcing literatures, we introduce the concept of forced coopetition (i.e., the situation where a third party forces competitors to cooperate) to describe the vendor relationships in IT multi-sourcing models. As an illustration, we present the case of a global sports company that recently introduced a novel IT multi-sourcing model, which is characterized by high levels of both vendor competition and cooperation, i.e., high levels of forced coopetition. Based on a longitudinal case study, we discuss the factors that enabled the client firm to (1) foster vendor competition and cooperation as well as (2) manage the delicate balance between the two. Specifically, we find that vendor number and size, vendor onboarding, vendor business growth, and vendor learning played a critical role in the successful implementation of the multi-sourcing model. The study’s main contributions lie in providing a deeper understanding of how client firms can manage the delicate balance between vendor competition and cooperation in IT multi-sourcing, as well as expanding the theoretical basis of traditional coopetition to include situations of forced coopetition.

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