TY - JOUR
T1 - A US Client's Learning from Outsourcing IT Work Offshore
AU - Rottman, Joseph W.
AU - Lacity, Mary C.
N1 - Please begin by telling us your offshore outsourcing story-why did your organizational unit initiate an offshore project, who was involved, what process did you go through, how did your internal organization react, how did you manage the supplier, who was the business sponsor, and what was the outcome?
PY - 2008/4/1
Y1 - 2008/4/1
N2 - Based on 45 interviews and significant documentation, we explore the offshore outsourcing experiences of a US-based biotechnology company. This company offshore outsourced 21 IT projects to six suppliers in India. Senior managers and the official documents from the Program Management Office consistently reported that offshore outsourcing was successful in reducing the company’s IT costs. But interviews with knowledgeable participants actually managing the projects suggest that many projects were not successful in meeting cost, quality, and productivity objectives. We found evidence that this company’s offshore strategy to simply replace domestic contractors with cheaper, offshore suppliers was a poor fit with its social and cultural contexts. Specifically, we found that strong social networks between the company’s internal IT employees and domestic contractors were not easily replicated with offshore suppliers. Furthermore, the internal project management processes were often incompatible with offshore suppliers’ processes. This paper also analyzes seven project characteristics that differentiate highly-rated projects from poorly-rated projects. These project characteristics are type of IT work, size of supplier firm, location of supplier employees (onsite/offshore), dollar value of the contract, duration of the project, timing of the project, and client unit managing the project. The paper concludes with four overall insights for clients and suppliers.
AB - Based on 45 interviews and significant documentation, we explore the offshore outsourcing experiences of a US-based biotechnology company. This company offshore outsourced 21 IT projects to six suppliers in India. Senior managers and the official documents from the Program Management Office consistently reported that offshore outsourcing was successful in reducing the company’s IT costs. But interviews with knowledgeable participants actually managing the projects suggest that many projects were not successful in meeting cost, quality, and productivity objectives. We found evidence that this company’s offshore strategy to simply replace domestic contractors with cheaper, offshore suppliers was a poor fit with its social and cultural contexts. Specifically, we found that strong social networks between the company’s internal IT employees and domestic contractors were not easily replicated with offshore suppliers. Furthermore, the internal project management processes were often incompatible with offshore suppliers’ processes. This paper also analyzes seven project characteristics that differentiate highly-rated projects from poorly-rated projects. These project characteristics are type of IT work, size of supplier firm, location of supplier employees (onsite/offshore), dollar value of the contract, duration of the project, timing of the project, and client unit managing the project. The paper concludes with four overall insights for clients and suppliers.
UR - https://link.springer.com/content/pdf/10.1007%2Fs10796-007-9061-4.pdf
U2 - 10.1007/s10796-007-9061-4
DO - 10.1007/s10796-007-9061-4
M3 - Article
VL - 10
JO - Information Systems Frontiers
JF - Information Systems Frontiers
ER -