Expectations and Achievements: A Longitudinal Study on an Offshoring Strategy

Abstract

Abstract-Offshore software development has gained momentum and most of software companies today have implemented offshore strategies of some sort. Many of these strategies are enforced by corporate top management and driven by assumptions that lower development wages guarantee cheaper and better software development. In practice, offshore software development is associated with many risks, and achievement of the expected benefits is not as straightforward as the rumor has it. In this paper we explore an implementation of an offshore strategy in a Swedish software company that opened its offshore branch in Russia. Based on extensive documentation analysis we create an overview of the initially expected benefits and obstacles that prevailed among onshore product and development unit managers. Years after implementation of the offshore insourcing strategy we asked these managers about the achievement of their expectations. We observed that the company documented various expected benefits when implementing an offshoring strategy and also concerns that some of these benefits might not be achieved. Seven years after its implementation, the offshoring strategy was overall considered working, however the expected benefits were not fully achieved. More importantly, several gaps were identified, that suggest that the enforced strategy has resulted in a stable but not beneficial collaboration from the onshore perspective.

Quo vadis outsourcing? A view from practice

“…To successfully outsource parts of its business, a company must develop the requisite capabilities, standardize its business processes and develop systematic transformation and change management processes (Arshad and Ahlan, 2013; Šmite and Cruzes, 2013).…”