Exploring the Key Capabilities for Offshore IS Sourcing

While there has been a tremendous increase in the number of firms engaging in IS offshoring efforts, many firms have been unsuccessful in realizing the intended benefits from offshoring. Most firms acknowledge the potential gains from offshoring, but lack the key capabilities for effective IS offshoring. Building on the dynamic capabilities perspective, and drawing upon extant research in strategic alliances, international business, distributed work management and virtual teams, we propose four meta-capabilities – IS systemic thinking, IS vendor management, global IS resource management and IS change management – as critical for effective IS offshoring of application development. We present preliminary findings from a 2-phased research study consisting of focus group discussions with senior IS managers, followed by in-depth case studies of IS offshoring.

[1]  Sundeep Sahay,et al.  Managing cross-cultural issues in global software outsourcing , 2004, CACM.

[2]  Jeffrey H. Dyer,et al.  The Relational View: Cooperative Strategy and Sources of Interorganizational Competitive Advantage , 1998 .

[3]  Stephen Tallman,et al.  Resources, Transactions and Rents: Managing Value Through Interfirm Collaborative Relationships , 1998 .

[4]  N. Venkatraman,et al.  Determinants of Information Technology Outsourcing: A Cross-Sectional Analysis , 2011, J. Manag. Inf. Syst..

[5]  L. L. Cummings,et al.  Strategic Response to Institutional Influences on Information Systems Outsourcing , 1997 .

[6]  Barbara Wixom,et al.  Data Warehousing Supports Corporate Strategy At First American Corporation , 2000, MIS Q..

[7]  Ralph Kliem,et al.  Managing the Risks of Offshore it Development Projects , 2004, Inf. Syst. Manag..

[8]  Varun Grover,et al.  The Effect of Service Quality and Partnership on the Outsourcing of Information Systems Functions , 1996, J. Manag. Inf. Syst..

[9]  Chetan S. Sankar,et al.  Information Technology Outsourcing and Virtual Team , 2005, J. Comput. Inf. Syst..

[10]  Anandhi S. Bharadwaj,et al.  A Resource-Based Perspective on Information Technology Capability and Firm Performance: An Empirical Investigation , 2000, MIS Q..

[11]  Amrit Tiwana,et al.  Knowledge Partitioning in Outsourced Software Development: A Field Study , 2003, ICIS.

[12]  RavichandranT.,et al.  Effect of Information Systems Resources and Capabilities on Firm Performance , 2005 .

[13]  F. Rothaermel,et al.  The Effect of General and Partner-Specific Alliance Experience on Joint R&D Project Performance , 2005 .

[14]  M. Lynne Markus,et al.  Change Agentry - The Next IS Frontier , 1996, MIS Q..

[15]  Michèle Paulin,et al.  Contractual governance, relational governance, and the performance of interfirm service exchanges: The influence of boundary-spanner closeness , 2005 .

[16]  J. Alberto Espinosa,et al.  Team Boundary Issues Across Multiple Global Firms , 2003, J. Manag. Inf. Syst..

[17]  Arvind Parkhe Strategic Alliance Structuring: A Game Theoretic and Transaction Cost Examination of Interfirm Cooperation , 1993 .

[18]  Jeffrey H. Dyer,et al.  Alliance capability, stock market response, and long‐term alliance success: the role of the alliance function , 2002 .

[19]  L. Willcocks,et al.  Core IS Capabilities for Exploiting Information Technology , 1998 .

[20]  AngSoon,et al.  Production and transaction economies and IS outsourcing , 1998 .

[21]  R. Gulati Network location and learning: the influence of network resources and firm capabilities on alliance formation , 1999 .

[22]  Rajiv Kishore,et al.  Outsourcing Success: Psychological Contract Perspective , 2007, AMCIS.

[23]  Mayuram S. Krishnan,et al.  Contracts in Offshore Software Development: An Empirical Analysis , 2003, Manag. Sci..

[24]  Leslie P. Willcocks,et al.  Exploring information technology outsourcing relationships: theory and practice , 2000, J. Strateg. Inf. Syst..

[25]  Detmar W. Straub,et al.  Production and Transaction Economies and IS Outsourcing: A Study of the U.S. Banking Industry , 1998, MIS Q..

[26]  D. Teece,et al.  DYNAMIC CAPABILITIES AND STRATEGIC MANAGEMENT , 1997 .

[27]  Leslie P. Willcocks,et al.  An Empirical Investigation of Information Technology Sourcing Practices: Lessons From Experience , 1998, MIS Q..

[28]  V. Grover,et al.  Decisions to Outsource Information Systems Functions: Testing a Strategy‐Theoretic Discrepancy Model , 1995 .

[29]  C. Agócs,et al.  Institutionalized Resistance to Organizational Change: Denial, Inaction and Repression , 1997 .

[30]  Dale Goodhue,et al.  Develop Long-Term Competitiveness through IT Assets , 1996 .

[31]  Detmar W. Straub,et al.  IT Outsourcing Success: A Psychological Contract Perspective , 2004, Inf. Syst. Res..

[32]  C. Bruce Kavan,et al.  Moments of governance in IS outsourcing: conceptualizing effects of contracts on value capture and creation , 2005, J. Inf. Technol..

[33]  Jae-Nam Lee,et al.  IT Outsourcing Strategies: Universalistic, Contingency, and Configurational Explanations of Success , 2004, Inf. Syst. Res..

[34]  M. Wade,et al.  Review: the resource-based view and information systems research: review, extension, and suggestions for future research , 2004 .

[35]  M. Markus,et al.  Information technology and organizational change: causal structure in theory and research , 1988 .

[36]  Jeanne W. Ross,et al.  From the Vendor's Perspective: Exploring the Value Proposition in Information Technology Outsourcing 1, 2 , 2003 .

[37]  Rafael Prikladnicki,et al.  Innovation in Information Systems Education-V The Management of Outsourcing: Development of a Module with Implications for the IT Curriculum , 2005, Commun. Assoc. Inf. Syst..

[38]  Harbir Singh,et al.  Learning and protection of proprietary assets in strategic alliances: building relational capital , 2000 .

[39]  Mary Lacity,et al.  Twenty Practices for Offshore Sourcing , 2004, MIS Q. Executive.

[40]  Sendil K. Ethiraj,et al.  Where Do Capabilities Come from and How Do They Matter? A Study in the Software Services Industry , 2005 .

[41]  Thiagarajan Ravichandran,et al.  Effect of Information Systems Resources and Capabilities on Firm Performance: A Resource-Based Perspective , 2005, J. Manag. Inf. Syst..

[42]  L. Willcocks,et al.  Taking the measure of outsourcing providers , 2005 .

[43]  Kathleen M. Eisenhardt,et al.  DYNAMIC CAPABILITIES, WHAT ARE THEY? , 2000 .

[44]  S. Winter,et al.  An evolutionary theory of economic change , 1983 .