It-Offshoring – A Comparison of Expectations and Experiences

Abstract

The BITKOM (German Association for Information Technology, Telecommunications and New Media) forecasts a serious lack of IT experts on the German labour market in the upcoming years. Despite of the recession because of the financial crisis they predict around 11,000 vacancies, especially in the field of software development. One instrument to overcome the expected shortage is the deployment of experts from abroad through IT-offshoring. Based on an empirical study conducted in 2004/05 at Pforzheim University this article analyses the expectations and experiences of German companies with offshore software development. The comparison shows that companies without direct experience with offshore software development underestimate the opportunities and overestimate the risks of this internationalization instrument.Offshoring, Internationalization, Transaction cost theory, Principal-Agent-Theory, International Software Development