Comparing Offshore Outsourcing and the Internal Offshoring of Software Development: A Qualitative Study

Distributed Software Development involves a number of different business models. Most of the companies, when searching for external solutions in other countries (offshoring), usually have two main options: offshore outsourcing (contracting services with an external organization) and internal offshoring (contracting with a wholly owned subsidiary). Both models have been studied for a long time, and indicate the need for a great collaboration among the stakeholders to succeed in distributed development. For this reason, in this paper we compare offshore outsourcing and internal offshoring from the viewpoint of three management levels: strategic, tactical and operational. We present findings from a case study conducted in five multinational companies. The findings are presented in terms of aspects identified to improve the performance in offshore software development, and were analyzed based on two dimensions – challenges and patterns of evolution

Distributed software development in a financial services organisation

The outsourcing of IS functionality to offshore development firms has been a growth industry that has blossomed over the last 10 years. This is as a result of organisations, seeking to optimise costs, mitigate risks, and achieve greater return on shareholder value by delegating the delivery of business information systems and applications to third party vendors. At the same time, distributed approaches to software development has arisen, there has been a growing interest in the applicability of lightweight or Agile development methodologies. As such, this paper this paper discusses experiences of a European Financial Services firm in outsourcing, and subsequently offshoring, two of its IT projects to vendor firms in India, where Agile approaches were used. The authors provide a model of the financial firm’s critical success factors presented as a frame of reference for others interested and involved in this topical area

Control, Process Facilitation, and Requirements Change in Offshore Requirements Analysis: The Provider Perspective

Process, technology, and project factors have been increasingly driving organizations to offshore early software development phases, such as requirements analysis. This emerging trend necessitates greater control and process facilitation between client and vendor sites. The effectiveness of control and facilitation has, however, not been examined within the context of requirements analysis and change. In this study, we examine the role of control and facilitation in managing changing requirements and on success of requirements gathering in the Indian offshore software development environment. Firms found that control by client-site coordinators had a positive impact on requirements analysis success while vender site-coordinators did not have similar influence. Process facilitation by client site-coordinators affected requirements phase success indirectly through control. The study concludes with recommendations for research and practice

Diverse virtual social networks: Implications for remote software testing teams

This paper evaluates offshore outsourcing in the IT testing industry and determines what conditions determine its success. There is particular focus on the influence of diversity in teams on group relationships. Two studies are described: the first, investigated the perceptions of professional software testers on the critical factors of offshore outsourcing; and the second study looked at the ability for diverse teams to form close working relationships through virtual networks. We find that overt diversity factors inhibit interaction across nationality boundaries. The limitations of virtual networks for fostering personal communications is apparent in preventing group members from overcoming the initial aversion to mix with out-group members, which could be achieved with closer and more personal communications between members with different diversity factors in normal face to face communications. Where software testing teams are outsourced globaly, and must rely on virtual communications, there seems potential for significant difficulties in developing close working relationships, which on the one hand, can be negative for group cohesion, but one the other hand, can be positive for encouraging imparitality

Software-export strategies for developing countries: A Caribbean perspective

The globalization of the software industry is seen to be driven in part by skill shortages in industrialised economies, the movement of software development practices away from centralised to more distributed modes and the spread of information and communication technologies to less developed economies, where skilled labour is available at lower costs. As such, a software export industry is sometimes seen as a means by which some non-industrialised countries can create competitive advantage. While many studies have explored the software-exporting strategies used by the more successful of these countries, little research has been done in other locations that lack some of the basic resources deemed necessary for success in this area. This paper describes two Caribbean software-outsourcing ventures in order to explore possible software-export strategies available within such atypical contexts. The role of government and degree of integration of the software outsourcer into the local context are found to feature significantly

From Offshore Operation to Onshore Simulator: Using Visualized Ethnographic Outcomes to Work with Systems Developers

This paper focuses on the process of translating insights from a Computer Supported Cooperative Work (CSCW)-based study, conducted on a vessel at sea, into a model that can assist systems developers working with simulators, which are used by vessel operators for training purposes on land. That is, the empirical study at sea brought about rich insights into cooperation, which is important for systems developers to know about and consider in their designs. In the paper, we establish a model that primarily consists of a ‘computational artifact’. The model is designed to support researchers working with systems developers. Drawing on marine examples, we focus on the translation process and investigate how the model serves to visualize work activities; how it addresses relations between technical and computational artifacts, as well as between functions in technical systems and functionalities in cooperative systems. In turn, we link design back to fieldwork studies

Systemic Innovation in a Distributed Network Paradox or Pinnacle?

Previous research has suggested that there is a dichotomy of organisational practices: companies involved in autonomous or modularised innovations, it is argued, benefit from decentralised approaches where coordination primarily takes place through the marketplace, whereas the benefits of systemic innovation are said to be appropriated best by centralised organisations. However, case studies of subcontractors to the Danish wind turbine industry suggest that the ability to meet heterogeneous demands plays an important role for the success of different forms of organisational practices in relation to innovation. The modularised versus systemic architecture approach therefore appears to be a too sweeping dichotomy for describing what can better be perceived as an array of different practices for balancing innovation contribution with the ability of individual firms to appropriate innovation benefits – and a heterogeneous market perception is a core element in building and sustaining this ability.Organisational Forms, Innovation System, Knowledge Complementarities, Value Appropriation

Contextual factors, knowledge processes and performance in global sourcing of IT services: An investigation in China

Copyright @ 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. Reuse of this article has been approved by the publisher.In this paper, the authors explore the influences of two major contextual factors—supplier team members’ cultural understanding and trust relationship—on knowledge processes and performance in global sourcing of IT services. The authors discuss a joint investigation conducted by a cross-cultural research team in China. Cultural understanding is measured by individualism with guanxi and mianzi, two Chinese cultural concepts, and trust relationship is measured by adjusting trust, a notion reflecting the uniqueness of the Chinese people. Knowledge processes are characterized by knowledge sharing. Performance is measured by the outcomes of global sourcing, which is represented by product success and personal satisfaction. Data are collected in 13 companies in Xi’an Software Park, with 200 structured questionnaires distributed to knowledge workers. The results of quantitative data analysis indicate that cultural understanding influences trust relationship greatly, as well as knowledge sharing and performance in global sourcing of IT services. Trust relationship significantly impacts knowledge sharing, whereas trust relationship and knowledge sharing have no impact on performance. This study suggests that special aspects of the Chinese context have significant direct impacts on knowledge processes while no direct and immediate impacts on performance in global sourcing of IT services.National Natural Science Foundation of China, Program for Humanity and Social Science Research, Program for New Century Excellent Talents in University in China and Brunel University's Research Development Fund