Risks, Benefits, and Challenges in Global IT Outsourcing

Practitioner's view of barriers to software outsourcing partnership formation: An empirical exploration

“…Various dispersion dimensions such as temporal, geographical, and work are connected with different sets of coordination challenges . Both formal and informal communication between outsourcing associates is considered vital for the productive relationship …”

“…The results are align with other surveys in the relevant domain such as Niazi et al, Gopal et al, Delen et al, Abdullah and Verner, Samantra et al, Verner, Tsai et al, Delen et al, Søderberg et al, Teo and Bhattacherjee, Shahin et al, Khan et al, Kinnula et al, Lahiri and Kedia, Khan and Azeem, and some other researchers Niazi et al confirms the positive impact of trust in the formation of software outsourcing alliance between vendor and client organizations. The findings of Wang suggest that, as compared with other collaboration models, the offshore was more susceptible to issues of communication and coordination. In view of Dhar and Balakrishnan, both formal and informal communication between outsourcing associates are deliberated vigorous for the productive relationship. According to Delen et al, the reasons why outsourcing relationship fails are somehow linked to barriers such as pitiable communication, lack of capability, lack of trust, divergent goals, and poor relationship management. Mathew and Chen suggest that OSD arrangement should be made successful by avoiding relational risks like debasement of service performance and quality mishaps. In view of Verner, vendor's lack of technical capability and experience can result in failure. In view of Herath and Kishore, lack of technical synchronization between the client and vendor can have an adversative effect on the outsourcing association. According to Verner et al, weak organizational proximity and work dispersion cause problems between vendor and client. Søderberg et al suggest employing staff who have established cross‐cultural understanding and capable of accurately and rapidly sensing, interpreting, and responding to problematic situations due to cross‐cultural differences. In view of Teo and Bhattacherjee, software development projects require significant investments in knowledge gaining and distribution, such as giving domain‐specific training to vendor staff, to be aware of client's corporate trade and manoeuvre. Such investments may have no or very little value in case of contract termination in a short run. According to Samantra et al, high hidden and switching cost may result in potential loss and disappointment, especially when there is no strategy specifically defined to focus on cost reduction. In view of Khan and Khan, poor contract management, insufficient contracting abilities, liability outside the contract, and poor management of the relationship on specified contractual terms may lead relationship towards failure. According ...…”

Evaluation of Vulnerability Risk Factor: Critical ICT Outsourcing project characteristics

“…ICT outsourcing strategy involves transferring some or all of the ICT related decision making rights, business processes, internal activities and services to external providers who develop and administer these activities in accordance with the deliverables, performance standard and outputs, as agreed in a contractual agreement [14]. The literature has highlighted various ICT related projects commonly outsourced to outside suppliers.…”

Towards a Theory of Information Systems Outsourcing Risk

“…Retain control over IS strategy [29] Cost drivers Understand outsourcing transaction cost drivers and corresponding market prices [22] Cost Pricing Unbundle lumped prices to assess cost drivers or benchmark [22] Project management Direct provider's efficiency [22] Project management Ensure delivery of accountabilities plus planning and executing initiatives [22] Project management Establish clear and comprehensive outsourcing management structure [29,32] Project management Establish project management [32] Project management Perform complete project management of outsourcing transaction [22,23,32,34] Project management Perform daily contract management [16,29] Provider capability Demand from providers customer references that illustrate turnaround cases [34] Provider Establish in contract various rights over the subcontracting (access, selection, veto, etc.) [22] Subcontracting Require full disclosure and customer approval of all subcontractors [34] Total cost of ownership Manage total cost of ownership [22] Transaction Manage the contract as well as the entity or equity investment [22] Tran benchmarking Benchmark transaction [22,30] Tran control Apply control mechanisms to the outsourcing transaction [7,22,24,29] Plan and test transition [34] Work organization Stage work hours with offshore provider [32] Workload…”