Fakultät Informatik und Mathematik
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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.
High labor cost in western countries allows cost savings by companies engaging in IS offshoring. However, studies worldwide indicate that a large number of companies that engaged in IS offshoring are not satisfied with the outcome. Our study examined the determinants of IS offshore project success: We developed a model and empirically tested it with data collected from 304 experts who reported on projects offshored from Germany to a wide range of near and distant countries. The model posited a direct effect of offshoring expertise and trust in offshore service provider (OSP) on success, as well as an indirect effect mediated by project suitability, knowledge transfer, and liaison quality. An analysis using partial least squares (PLSs) provided significant support for almost all these relationships. However, it showed that offshoring expertise played a minor role in explaining success and the mediating constructs. Trust in OSP had a small direct effect on success and a medium to large effect on the mediating constructs. Project suitability, knowledge transfer, and liaison quality all had small direct effects on success.
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.
Purpose
This paper aims to investigate the main tasks, necessary skills, and the implementation of the offshore coordinator’s role to facilitate knowledge transfer in information systems (IS) offshoring.
Design/methodology/approach
This empirical exploratory study uses the classical Delphi method that includes one qualitative and two quantitative rounds to collect data on IS experts’ perceptions to seek a consensus among them.
Findings
The participants agreed, with strong consensus, for a set of 16 tasks and 15 skills. The tasks focused primarily on relationship management and facilitating knowledge transfer on different levels. The set of skills consists of approximately 25 per cent “hard” skills, e.g. professional language skills and project management skills, and approximately 75 per cent “soft” skills, e.g. interpersonal and communication skills and the ability to deal with conflict. Two factors mainly influence implementing the offshore coordinator role: project size and the number of projects to be supported simultaneously.
Practical implications
The findings provide indications of how to define and fulfill this crucial role in practice to facilitate the knowledge transfer process in a positive way.
Originality/value
Similarities in previous research findings are aggregated to examine the intermediate role in detail from a consolidated perspective. This results in the first comprehensive set of critical tasks and skills assigned to the competency dimensions of the universal competency framework, demonstrating which and how many competency dimensions are critical.
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.
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.