Operational capabilities redeployment in offshore software service: From vendor's perspective

China has become one of the largest bases for Information Technology Outsourcing (ITO). Chinese ITO vendors have developed operational capabilities that are complementary with each other through their long-term relationship with Japanese clients. As more and more countries are outsourcing software services to China, how to redeploy established capabilities to different markets is one of the most important issues faced by Chinese vendors. The aim of this paper is to provide insights into the redeployment of operational capabilities in offshore software service in a multiple market environment. Our preliminary analysis indicates that high level of client-specific capabilities developed with Japanese clients may have negative impacts on the development of other IT capabilities and therefore limits the redeployment of established capabilities. An emphasis on process capability and standardization by western clients, on the contrary, will positively complement other capabilities therefore will help vendors to redeploy capabilities in domestic market.

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