The co-evolution of contract and software artefact in cloudsourcing

Propelled by the promise of cost savings and enhanced service quality, cloudsourcing has become the largest segment of the global outsourcing market. In practice, however, managing cloudsourcing projects is notoriously challenging because they morph into complex, multi-year endeavours that entail frequent adaptations of both the cloud service and the contract in response to emergent goals. This study develops and explores the idea that in this adaptation process, the outsourcing contract and software artefact become closely connected. When making contracting decisions, clients must consider that cloud services are built on standardised multi-tenant architectures, offer predefined customisation options, and evolve continuously. Therefore, we explore the dynamic interplay between contract and cloud-based software artefact in response to emergent goals. Drawing from a longitudinal study of four cloudsourcing cases, we reveal two patterns: co-evolutionary polarisation and co-evolutionary harmonisation. The former, driven by positive reinforcement, intensifies tensions between initial and emergent goals, manifesting in projects drifting away from goals. The latter, characterised by balancing feedback, facilitates a flexible trajectory, enabling stepwise reconciliation of initial and emergent goals. These findings offer significant theoretical contributions to the management of sourcing projects, especially in cloud contexts, and provide actionable insights for managers navigating the complex dynamics of cloudsourcing.