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PURPOSE
IT outsourcing (ITO) has developed into an established practice for organizations but the interorganizational and oftentimes international collaboration it involves comes at a price: Reports from academia and practice suggest that more than 25% of all ITO projects fail, many because of cultural differences between client and provider organizations. Against this background, this paper analyzes the complex nature of cultural distance and its multi-faceted effect on ITO success.
DESIGN/METHODOLOGY/APPROACH
This paper builds upon extant literature on culture on the national, organizational and team level, conceptualizes its effect on relationship quality and ITO success, and hypothesizes a model on potential moderators and management techniques to offset culture-induced challenges. It then evaluates and refines the model by means of an interpretive qualitative research design for an in-depth single-case study of ProSiebenSat.1 Media SE (P7S1), a leading European media company that reconfigured its IT sourcing model three times in 10 years.
FINDINGS
The results from interviews with top managers from client and provider organizations represent one of the first integrated views on the critical importance of cultural compatibility on multiple levels, provide manifold examples for its complex effect on ITO success, as well as moderators and potential management techniques to promote ITO success.
RESEARCH LIMITATIONS/IMPLICATIONS
This paper contributes relevant empirical insights to the growing body of literature on culture and its underestimated role in ITO success. It builds on tentative theory that is confirmed and refined.
PRACTICAL IMPLICATIONS
The paper helps in substantiating the complex and intangible nature of culture and demonstrates means for its effective management.
ORIGINALITY/VALUE
The results from interviews with top managers from client and provider organizations represent one of the first integrated views on the critical importance of cultural compatibility on multiple levels, provide manifold examples for its complex effect on ITO success, as well as moderators and potential management techniques to promote ITO success.
IS offshoring
(2010)
Information systems (IS) offshoring describes the transfer of IS services to an offshoring service provider in a near or far away country. It has received growing attention in the past and there is a strong momentum in shifting IS services abroad. Markus Westner examines the IS offshoring phenomenon from the perspective of German companies. He first provides an overview of the current literature in the field of IS offshoring. Based on interviews with 47 industry experts, evaluation criteria for selecting projects for offshoring are identified. Finally, the author examines determinants of IS offshore project success in German companies based on a statistical analysis of 304 projects using structural equation modeling (PLS).
IT-Offshoring
(2014)
The paper presents a research model and a measurement instrument for a research-in-progress study on the antecedents of success in IS offshoring projects. In this empirical-confirmatory study, we intend to analyse the impact of the constructs “offshoring expertise”, “trust in offshore service provider”, “project suitability”, “knowledge transfer”, and “liaison quality” on offshore project success. Constructs and indicators are derived from an extensive literature review. We plan to formulate a structural equation model and to test it using partial least squares (PLS) as an analysis technique. Our research model addresses the paucity of research that quantitatively examines offshoring success.
This paper empirically examines the current state of the IS offshoring phenomenon in Germany regarding project characteristics and success patterns. Relying on a sample of 304 projects conducted at various industry sectors and companies, results show that IS offshoring primarily occurs in sectors Telecommunications and IT at large corporations. Cost reduction is the main reason for going offshore and offshore projects are executed as part of a larger program at companies. Noticeably, most projects are delivered from India. Additionally, neither captive offshoring nor offshore outsourcing dominates as a de-livery option. Comparing different project subgroups regarding project success, the results reveal that projects delivered by an internal or partially owned service provider are more successful. Other project characteristics such as a project’s embedded-ness in a larger offshoring program, a project’s size, or a project’s offshoring degree in terms of relatively offshored labor hours show few significant differences. The paper addresses the paucity of empirical research on the current state of the IS offshoring phenomenon in Germany.
IS offshoring research regarding knowledge transfer processes, roles involved, as well as influencing factors is characterized by its diverse and heterogeneous nature. Covering the last fifteen years of IS offshoring research, this paper provides a consolidated view of the field of study. It presents a generic knowledge transfer process consisting of four stages and five milestones. These stages are characterized and evaluated according to their relevance for knowledge transfer, the types of knowledge transferred, the main activities and methods for transfer and testing, as well as the goals pursued. Furthermore, we aggregate the diverse literature findings relating to individuals who facilitate knowledge transfer processes into a general role. We label this role “offshore coordinator” and present its core tasks and necessary skills. In addition, we identify and cluster core factors that influence success or failure of knowledge transfer. In summary, our study answers calls to discontinue with empirically derived definitions in favor of theory-based conceptualization of the IS offshoring research field with respect to knowledge transfer processes, roles, and success factors. Future studies can build on these results and examine questions with respect to particular characteristics of knowledge transfer processes and their influencing success and failure factors.
An appreciation of globalisation issues by information systems (IS) graduates is a growing requirement of organisations with global reach. This paper discusses the planning of a joint course to be delivered online and face to face by two lecturers representing two tertiary institutes in Germany and New Zealand respectively. The IS offshoring content of the course is relatively unique and aspects of globalisation will be demonstrated through the dual country delivery of the course. The two lecturers involved have spent time lecturing and studying in their global partner’s country and tertiary institutes and so this joint delivery method is likely to also strengthen cultural ties between the two participating institutions including the students involved. Further research goals and issues are discussed for post-delivery of this dual country blended course. This paper provides a basis for this concept to be evaluated in further research.
The identification of suitable applications or projects is a main initial step in any software development or maintenance related IS offshoring arrangement. This paper examines evaluation criteria and their importance for selecting application or project candidates for offshoring. Based on a literature analysis and interviews with 47 experts from 36 different German companies describing 64 case examples, we find that in contrast to the literature, “size”, “codification”, and “language” are perceived as important selection criteria by experts. Case examples additionally show that “business specificity” seems to be a main reason for application or project failures, that “business criticality” appears to be less important than suggested by the literature, and that adequate “size” might be a necessary prerequisite, but seems not to be a sufficient criterion for an application’s or project’s suitability for offshoring. These differences in comparison to findings from the literature may be explained by cultural and language differences.
This paper empirically examines the current state of the IS offshoring phenomenon in Germany regarding project characteristics and success patterns. Relying on a sample of 304 projects conducted at various industry sectors and companies, results show that IS offshoring primarily occurs in sectors Telecommunications and IT at large corporations. Cost reduction is the main reason for going offshore and offshore projects are executed as part of a larger program at companies. Noticeably, most projects are delivered from India. Additionally, neither captive offshoring nor offshore outsourcing dominates as a de-livery option. Comparing different project subgroups regarding project success, the results reveal that projects delivered by an internal or partially owned service provider are more successful. Other project characteristics such as a project’s embedded-ness in a larger offshoring program, a project’s size, or a project’s offshoring degree in terms of relatively offshored labor hours show few significant differences. The paper addresses the paucity of empirical research on the current state of the IS offshoring phenomenon in Germany.