Information Systems Skills Differences between High-Wage and Low-Wage Regions: Implications for Global Sourcing

Developing Information Systems (IS) skills for a company’s workforce has always been challenging, but global sourcing growth has caused the determination of needed IS skills to be more complex. The increased use of outsourcing to an IS service provider and from high-wage regions to low-wage regions has affected what IS skills are required globally and how to distribute the workforce to meet these needs. To understand what skills are needed in locations that seek and those that provide outsourcing, we surveyed IS service provider managers in global locations. Results from 126 reporting units provide empirical evidence that provider units in low-wage regions value technical skills more than those in high-wage regions. Despite the emphasis on commodity skills in low-wage areas, high- and low-wage providers value project management skills. Low-wage regions note global and virtual teamwork more than high-wage regions do. The mix of skills and the variation by region have implications for domestic and offshore sourcing. Service providers can vary their staffing models in global regions which has consequences for recruiting, corporate training, and curriculum

Client Communication Practices in Managing Relationships with Offshore Vendors of Software Testing Services

Enabled by the globalization and advances in technology, offshore outsourcing of software development to countries such as India, China, and Russia, continues to increase. Much of the extant research has not focused on the communication practices observed in thriving offshore client−vendor relationships. Our research identifies communication practices found in a case study of a large multinational client’s multi-vendor relationship in offshore outsourcing of software testing projects. We discuss the empirically grounded communication practices in the light of existing literature to highlight how the client−vendor relationships deliver long-term value. Through this discussion, we delineate and discuss communication techniques. Implications for theory and practice are also discussed

An empirical evaluation of client-vendor relationships in high maturity Indian software outsourcing companies

The study presented in this thesis investigates offshore software outsourcing relationships. Offshore software outsourcing has been increasing continuously for the last decade. More and more software vendor companies from different countries such as India, Russia, Brazil and China are joining the offshore `bandwagon'. Indian software companies especially have managed to secure a leading position as offshore software outsourcing vendors. However, with more client companies outsourcing their software operations offshore, issues associated with the establishment and management of offshore outsourcing relationships have become more important. With the growing volume of offshore outsourcing, the number of failures is also increasing. A review of the literature suggests that success or failure is mainly dependent on the management of relationships between client and vendor. Subsequently, it is imperative to identify critical factors that can help to better manage offshore software outsourcing relationships. Furthermore, it is also important to identify the difficulties faced in managing offshore relationships and also how clients and vendors develop mutual trust. Trust is important to understand in the offshore software outsourcing context as it has been reported as the most significant contributor to the management of any human relationship. Nonetheless, different advantages that motivate clients to outsource are also important in understanding offshore software outsourcing. In this study, motivators, difficulties, critical relationship management factors and trust building factors are studied by means of empirical investigation into eighteen high maturity Indian software companies and six of their clients based in the USA and Europe. Multiple case studies with grounded theory analysis techniques are used to conduct the empirical investigation. Grounded theory, which is a part of qualitative research, helps to develop emergent model from empirical data. Furthermore, multiple case studies are used as objects to collect qualitative data and organise overall investigation. The research methods used were piloted with two Indian software companies before conducting the full empirical investigation. The results of this investigation suggest that client companies are motivated to outsource their software offshore by cost savings, quality, flexibility, core competence, skills availability, higher productivity, faster development, technical expertise and high maturity of vendor. The results also uncovered difficulties faced by clients and vendors in managing relationships. Difficulties include managing cultural differences, expectation mismatch, language differences, loss of control, distance, time zone differences, workforce reshuffling and post-contractual matters. This investigation further identifies critical factors to managing offshore outsourcing relationships such as effective communication, a process driven approach, commitment to the project, transparency in actions, consistency in performance, value addition and allocating resources effectively in the project. Furthermore, results from this study suggest that previous work reference, experience and reputation in the offshore outsourcing business, background of the key vendor employees, investments, prototyping and personal visits from the client are important for achieving trust. This study also identifies that to maintain trust in the relationship both clients and vendors perceive critical factors such as commitment, process driven approach, communication, confidentiality, performance, honesty, transparency, demonstrability, personal relationships and working together in outsourcing project. Based on the results of the empirical results and their discussions, this study presents an emergent model and practical guidelines for managing offshore software outsourcing relationships. The uniqueness of this investigation is in its large scale empirical investigation into high maturity software companies. Furthermore, most previous studies have investigated either clients or vendors, whereas this study investigates vendors and their corresponding clients. An investigation into trust in offshore software outsourcing relationships is also a significant addition to the existing literature relevant to software outsourcing. The empirical investigation gave rise to proposals for discussions and to an emergent empirical model. Thus the current body of knowledge in offshore software outsourcing is enhanced by this work. Moreover, practical guidelines, based on empirical results are proposed for client and vendors to help them manage their offshore software outsourcing relationships

Effective Strategies for Managing the Outsourcing of Information Technology

More than half of information technology (IT) outsourced projects fail, primarily due to a lack of effective management practices surrounding the outsourcing end-to-end process. Ineffective management of the IT outsourcing (ITO) process affects organizations in the form of higher than expected project costs, including greater vendor switching or reintegration costs, poor quality, and loss of profits. These effects indicate that some business leaders lack the strategies to effectively manage the ITO process. The purpose of this single-case study was to apply the transaction cost economics (TCE) theory to explore strategies 5 business professionals use to manage an ITO project in a financial services organization located in the Midwestern region of the United States. Participant selection was purposeful and was based on the integral role the participants play on the ITO project. Data collection occurred via face-to-face semistructured interviews with the participants and the review of company documents. Data were analyzed using inductive coding of phrases, word frequency searches, and theme interpretation. Three themes emerged: vendor governance and oversight, collaborative strategic partnership, and risk management strategies enabled effective management of ITO. Identifying and executing appropriate outsourcing strategies may contribute to social change by improving outsourcing infrastructure, which might support job creation; increasing standards of living, especially within emerging markets; and heightening awareness of different cultures, norms, and languages among people living in different regions around the world to establish commonalities and gain alignment with business practices

Information Technology Offshoring: Prospects, Challenges, Educational Requirements, and Curriculum Implications

Offshore provision of information systems/information technology-related services has been growing rapidly in recent years and seems firmly set to continue. This trend is fueled by the many advantages of offshore service procurement; however, there are dangers in this practice. Furthermore, offshoring requires adaptation of the IS function and IS management. This in turn suggests modifications of IS curricula in order to prepare graduates for the new environment. The advantages of offshoring are those of outsourcing in general: allowing the organization to focus on its core activities and cost savings. The main dangers include loss of business intelligence and reliance on remote suppliers who may suffer a major failure. The loss of jobs due to offshoring also introduces political considerations. Offshore operations are generally supervised by an organization’s CIO. This management responsibility requires awareness of cultural and legal differences and of risks associated with offshoring and outsourcing in general. Offshoring has an effect on job opportunities for graduates of information systems programs. The number of some jobs will shrink, but new positions with new responsibilities are likely to emerge. Training students to function in an environment of offshored operations will introduce new IS specializations and require adaptation of IS curricula; a framework for considering modifications is suggested