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Information Technology and Management

, Volume 12, Issue 1, pp 17–34 | Cite as

Bodyshopping versus offshoring among Indian software and information technology firms

  • Sumit K. Majumdar
  • Kenneth L. Simons
  • Ashok Nag
Article

Abstract

Investigations of offshore outsourcing of information systems have presented little evidence on developing country software and information technology (IT) industries. This study probes how Indian software and IT suppliers trade off work in India versus bodyshopping of employees. Worldwide clients view these practices as full offshoring versus on-shore temporary hiring from an Indian firm, but these practices are probed from suppliers’ perspective. Suppliers’ characteristics are theorized to affect their use of bodyshopping versus in-India work. A Reserve Bank of India survey of every Indian software and IT firm elicited suppliers’ use of bodyshopping to serve clients abroad. Consistent with theoretical rationales, suppliers that were larger, incorporated, public, and owned foreign subsidiaries most frequently provided bodyshopping among their international services. Bodyshopping was used frequently for IT purchasing and systems maintenance and infrequently for business process applications, and was infrequent to nations where bodyshopped labor costs were high. The evidence expands knowledge of the vibrant entrepreneurial IT industry in India and how it serves client firms abroad.

Keywords

Body shopping Delivery strategy choice Indian software and information technology sector Information technology International outsourcing Size of firm 

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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  • Sumit K. Majumdar
    • 1
  • Kenneth L. Simons
    • 2
  • Ashok Nag
    • 3
  1. 1.School of ManagementUniversity of Texas at DallasRichardsonUSA
  2. 2.Department of Economics, Sage Lab 3504Rensselaer Polytechnic InstituteTroyUSA
  3. 3.Reserve Bank of India and Riskraft Consulting LtdMumbaiIndia

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