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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.