Information Systems Offshoring—A Literature Review and Analysis

IS offshoring has become one of the most discussed phenomena in IS research and practice. Particularly due to its rapid evolvement, current research on IS offshoring lacks a consolidated view on existing results. The article at hand seeks to meet this need by systematically reviewing and analyzing prior academic literature on IS offshoring. Based on a review of top-ranked IS and management journals as well as IS conference proceedings, we compile an exhaustive bibliography of ninety-six publications solely focusing on IS offshoring from a (project) management perspective. To adequately address the immense diversity of these publications, a multi-perspective research framework consisting of three perspectives, namely, research focus, research approach, and reference theory, is introduced and forms the basis for our literature analysis. The analysis results confirm the appropriateness of our framework and reveal directions for future research along the framework perspectives: Most importantly, in an effort to increase the significance and the trustworthiness of their results, researchers should apply a more theory-driven approach and provide a better description of their research context. Moreover, future research needs to pay particular attention to the pre-implementation stages of an IS offshoring initiative as well as the special nature of nearshoring and captive offshoring. Across all project stages, researchers should not only concentrate on the client point of view but incorporate multiple points of view

Exploring The Balance Between Trust And Formal Controls In Information Systems Outsourcing Relationships

Trust and formal controls are critical in contemporary information systems outsourcing arrangements. Trust has been recognized as the relationship facilitator, while formal controls have been treated as the governance mechanism. Achieving a balance between trust and formal controls has received much attention in the literature as it leads to better management of inter-organisational relationships and performance results. Although existing research on the balance offers interesting insights, it is largely descriptive and does not establish a sound conceptual base. In contrast, the current studies that investigate the interaction of trust and formal controls have been based on contradictory conceptualisations and conflicting research outcomes, leading to controversial and exhausting debate about trust and formal controls being complements and/or substitutes. In this study, we investigate the dynamics of trust-controls nexus in IS outsourcing arrangements and build a conceptual framework that captures various interplays between trust and formal controls. We argue that different types of balance (antithetical, orthogonal and synergistic) and outsourcing outcomes can mutually influence each other. Based on our framework, we explore the synergistic balance in twocase studies and reveal the existence of dynamic patterns of interaction between trust-controls nexus and outcomes, and the changes in the achieved balance. The study provides a new way to explore the balance as the outcome of dynamic interactions between trust and formal controls and its link to the outcomes in IS outsourcing

Dynamics of the Amount of Control in Offshore Software Development Projects

This paper investigates changes in the variety and intensity of formal and informal control mechanisms in offshore software development (OSD) projects. Based on a comparative case study approach our results confirm existing findings such as that the amount of control varies across different projects stages, but also contribute with new findings. For example, we found that particularly the quality of project deliverables in early project phases will lead to an increase of the amount of formal control. However, these quality problems do not necessarily lead to an increase of informal control. In return, an increase in quality of deliverables will subsequently decrease the amount of control. An important finding is that in contrast to prior studies our results do not support that the amount of control is directly related to project success. Altogether, our study contributes to the further understanding of the dynamics of the amount of control, its influencing factors and its relationship to project success

An Empirical Study of Online Software Outsourcing: Signals under Different Contract Regimes

We study whether and how contractual arrangements (fixed price vs. time-and-materials contracts) change the effect of reputation, certification, and language characteristics on the chances of winning outsourcing contracts. Using a comprehensive dataset from an online outsourcing marketplace, we model how buyers choose among bidding vendors, and how the effects of these variables change under different contract forms. Our results show that online reputation is an important predictor of success only for fixed-price contracts, but not significant for times-and-materials contracts. In other words, contract forms can mitigate the typical Matthew Effect associated with online reputation systems. Contrary to popular belief, certifications do not increase the chances of winning regardless of the contract forms. Linguistic features of private communications from the vendor to the buyer also affect the chances of winning, and different dimensions have different effects when contract forms change. Our study is one of the first to study the interaction between contract formats and different signals that vendors can reveal to buyers in the competitive bidding process, and is also one of the first to investigate how texts of private communications affect buyers' contracting decisions

Applying global software development approaches to building high-performing software teams

The rapid progress of communication technologies combined with the growing competition for talents and knowledge has made it necessary to reassess the potential of distributed development which has significantly changed the landscape of the IT industry introducing a variety of cooperation models and making notable changes to the software team work environment. Along with this, enterprises pay more attention to teams’ performance improvement, employing emerging management tools for building up efficient software teams, and trying to get the most out of understanding factors which significantly impact a team’s overall performance. The objective of the research is to systematize factors characterizing high-performing software teams; indicate the benefits of global software development (GSD) models positively influencing software teams’ development performance; and study how companies’ strategies can benefit from distributed development approaches in building high-performing software teams. The thesis is designed as a combination of a systematic literature review followed by qualitative research in the form of semi-structured interviews to validate the findings regarding classification of GSD models’ benefits and their influence on the development of high-performing software teams. At a literature review stage, the research (1) introduces a team performance factors’ model reflecting the aspects which impact the effectiveness of development teams; (2) suggests the classification of GSD models based on organizational, legal, and temporal characteristics, and (3) describes the benefits of GSD models which influence the performance of software development teams. Within the empirical part of the study, we refine the classification of GSD models’ benefits based on the qualitative analysis results of semi-structured interviews with practitioners from IT industry, form a comparison table of GSD benefits depending on the model in question, and introduce recommendations for company and team management regarding the application of GSD in building high-performing software teams. IT corporations, to achieve their strategic goals, can enrich their range of available tools for managing high-performing teams by considering the peculiarities of different GSD models. Company and team management should evaluate the advantages of the distributed operational models, and use the potential and benefits of available configurations to increase teams’ performance and build high-performing software teams

Examining political risk in service offshoring strategies

This research investigates political risk in the context of service offshoring and the corresponding impact on risk management decisions. The first stage of the study uses the Repertory Grid Technique (RGT), to explore key post-contract political risks experiences within offshore outsourcing activities. Twelve key political risks affecting offshore outsourcing decisions are identified, and the moderating effect of offshoring activity types (BPO, ITO or KPO) on political risk exposure and impact perceptions is highlighted. The research also explores the conditioning effect of industry specific exposure to political risk and enhances the explanatory ability of the Transaction Cost Economics (TCE) constructs, offering a re-operationalization of the political risk component of external uncertainty. The second stage of the research introduces a series of hypotheses between offshoring flows and political risk profiles, and applies multiple regression to analyse political risk affecting offshore activities in low cost countries across contract-based offshoring engagements and FDI. The findings highlight that political risk is a genuine business concern for offshore contract-based outsourcing modalities, and identify concerns with Intellectual Property protection, Quality of Bureaucracy and Corruption as key considerations affecting location decisions in low-cost countries. The research further suggests a positive relationship between strong country level institutional and regulatory systems and high knowledge content in offshoring engagements. From a practical perspective, the research highlights the need for managerial tools to determine diversified firm and industry specific political risk impact on global service outsourcing engagements. The key practical contribution is the development of differentiated political risk typologies that can capture the nuances of external risks in offshoring, allowing for more accurate risk assessment of offshoring decisions

Psychological Contract in IT Outsourcing: A Systematic Literature Review

Recent IT Outsourcing (ITO) studies have highlighted the importance of a construct known as the Psychological Contract (PC) and its impact over the outcome of ITO agreements. However, there is still a lack of a consolidated view on the subject matter. To address this matter, we conducted a systematic review and analysis on the PC within ITO studies by examining the main themes, topics and methodologies that have been used in the research to date. Our findings suggest that despite the importance of the PC in ITO being well recognised, it is still an under explored concept with only 12 studies identified to date. Furthermore, subsequent analysis of these studies also highlighted several gaps caused by a lack of consistency over the definition, boundaries and application of the PC. To ensure that these gaps are addressed, we propose several recommendations that we encourage future studies take into consideration