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The purpose of this study is to identify a typology of procurement contracts in the context of software development projects that allows firms to align design flexibility with design uncertainty at the project level. The theoretical lenses of contract theory and software engineering are used to explain why the five archetypes in the proposed typology provide gradually increasing levels of design flexibility and to develop hypotheses about the associations between design flexibility and a set of project cost dimensions.

The hypotheses are tested with objective contractual data from 270 software development contracts entered into by a leading international bank over a period of three years.

Data analysis confirms the existence of the proposed typology and shows that design flexibility is negatively associated with control and positively associated with coordination, trust, duration and price.

Although the findings are based on the contracting practices of a single, albeit sophisticated, organization, they shed light on the ability of firms to align flexibility with uncertainty at the onset of new projects by taking advantage of nuanced contractual mechanisms to produce a broader set of contractual archetypes.

This paper is the first in the outsourcing literature to analyze a nuanced contractual typology in software development projects through the perspectives of both contract theory and software engineering.

The purpose of this paper is to examine the differences in how customers and organizations perceive online customer relations (OCR) tools – the online communication tools at the interface between organizations and customers – and how the different perceptions affect the implementation, use, and effectiveness of these tools.

The research model is tested empirically in three separate studies that explore the organizations' perspective of OCR tools, the customers' perspective of OCR tools, and the actual implementation and use of these tools.

The findings in this paper vary across the six OCR tools examined. The findings for the “contact form” suggest that the misalignment in the perspectives of organizations and customers can drive less effective online relationships. Conversely, the findings for the “order‐tracking system” illustrate the potential of the alternative situation, when the attitudes of organizations and customers are aligned.

This paper identifies two potential barriers to effective OCRs: misalignment between the attitudes of organizations and customers, and inconsistency between attitude and behavior on the part of organizations. The findings suggest ways for organizations to improve the effectiveness of their online strategy.

The research model emphasizes the implementation and use of tools that support relationships rather than commercial transactions, and assumes the availability of a portfolio of OCR tools rather than concentrating on an individual tool. This study contributes by developing and testing a research model that includes the distinct perceptions and behaviors of both organizations and customers.