Purpose – The purpose of this paper is to identify the critical success factors in gaining user customer satisfaction in IT outsourced services and find how it helps in the competitive advantage and customer retention for the service provider. Improving the service quality and customer satisfaction of outsourced IT service is the main rationale behind pursuing this research. Design/methodology/approach – Three firms were selected for studying primarily because a large part of their IT support work is outsourced to multiple vendors and support work is carried out, both on site and offshore. A structured, open‐ended interview was conducted because of the exploratory nature of this case study. The primary data were collected through face‐to‐face interviews, with 12 senior managers. Extensive secondary data were provided by the interviewees. Findings – The paper provides evidence that by following critical success factors there are few expected outcomes to client and service provider organizations, like user satisfaction for the client, and competitive advantage and customer retention in IT service‐providing organizations. As evident from the interview with the three companies, from their experience over the years of outsourcing the IT services, the service providers are able to sustain better employee retention. Customers have seen improved employee attitude and morale, increased productivity of the service provider, which resulted in reduced costs to customers over the years. Research limitations/implications – The findings were based solely on oil and gas organizations from North America and UK. Also, service providers for these organizations have the majority of their operations out of India, and again, the feedback from the customers may be focused only on these service providers, and may not reflect service practices in other geographic, economic or cultural settings. The implication of this research on theory is, by following these critical success factors, user customer satisfaction is likely to improve with outsourced IT services. Practical implications – This research may help in reducing service provider burn‐out and improve employee retention. Lessons learned are that to be a successful IT service provider in a long‐run, one needs to understand the end user and executives of client, and also its own knowledge workers. Also, the findings may provide valuable insights for practitioners. Originality/value – IT outsourcing is ultimately a people‐centric business. Many client and service provider companies make the error of assuming that it's a process‐centric event, or a simple business transaction. The best outsource service providers focus on morale, resistance, retention, and cultural evolution. Implementing effective service management will pay back in terms of better service and improved business performance, and result in stronger long‐term relationships between suppliers and recipients.
