Skip to main content
SpringerLink
Log in

Offshore Suitability: Criteria for Selecting IS Applications or Projects for Offshoring

  • Chapter
IS Offshoring

  • 496 Accesses

Abstract

The identification of suitable applications or projects is a main initial step in any software development or maintenance related IS offshoring arrangement. This paper identifies evaluation criteria for selecting candidates for offshoring, analyzes the importance of the criteria, and relates them to an organization's offshoring expertise. Based on a literature analysis and interviews with 47 experts from 36 different German companies, we identified several evaluation criteria. The main findings are that in contrast to the literature, size, codification, and language are perceived as important selection criteria by experts. These differences might be due to cultural differences. Additionally, codification, business criticality, business specificity, and complexity seem to be less important in the case of organizations with offshoring expertise.

A shorter version of this paper has been published in the Journal of Information Technology Management (JITM): Westner, M., & Strahringer, S. (2008). Evaluation criteria for selecting offshoring candidates: An analysis of practices in German businesses. Journal of Information Technology Management, 19(4), 16–34

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution
Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 39.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD 54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Akmanligil, M., & Palvia, P. (2004). Strategies for global information systems development. Information & Management, 42(1), 45–59.

    Google Scholar 

  • Amoribieta, I., Bhaumik, K., Kanakamedala, K., & Parkhe, A. D. (2001). Programmers abroad: A primer on offshore software development. McKinsey Quarterly, (2), 128–139.

    Google Scholar 

  • Apte, U. M. (1992). Global outsourcing of information systems and processing services. The Information Society, 7, 287–303.

    Article  Google Scholar 

  • Apte, U. M., & Mason, R. O. (1995). Global disaggregation of information-intensive services. Management Science, 41(7), 1250–1262.

    Article  Google Scholar 

  • Apte, U. M., Sobol, M. G., Hanaoka, S., Shimada, T., Saarinen, T., & Salmela, T., et al. (1997). IS outsourcing practices in the USA, Japan, and Finland: A comparative study. Journal of Information Technology, 12(4), 289–304.

    Article  Google Scholar 

  • Aron, R., & Singh, J. V. (2005). Getting offshoring right. Harvard Business Review, 83(12), 135–143.

    Google Scholar 

  • Balaji, S., & Ahuja, M. K. (2005). Critical team-level success factors of offshore outsourced projects: A knowledge integration perspective. In R. Sprague Jr. (Ed.), Proceedings of the 38th Annual Hawaii International Conference on System Sciences (pp. 52–59). Los Alamitos, CA: IEEE CS Press.

    Google Scholar 

  • Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

    Article  Google Scholar 

  • Ben, E. R., & Claus, R. (2005). Offshoring in der deutschen IT Branche. Informatik Spektrum, 28(1), 34–39.

    Article  Google Scholar 

  • Benbasat, I., Goldstein, D. K., & Mead, M. (1987). The case research strategy in studies of information systems. MIS Quarterly, 11(3), 368–386.

    Article  Google Scholar 

  • BIHK (2002). Offshore IT für den Mittelstand: Leitfaden zur Schaffung und Sicherung von Arbeitsplätzen  durch offshore IT-Entwicklung im Rahmen der Internationalisierung des Mittelstandes in Bayern. Retrieved March 07, 2007, from http://www.software-offensivebayern.de/pdf/OffshoreIT.pdf.

  • Bitkom (2005). Leitfaden Offshoring. Retrieved March 07, 2007, from http://www.bitkom.org/files/documents/BITKOM_Leitfaden_Offshoring_31.01.2005.pdf.

  • Boudreau, M.-C., Gefen, D., & Straub, D. W. (2001). Validation in information systems research: A state-of-the-art assessment. MIS Quarterly, 25(1), 1–16.

    Article  Google Scholar 

  • Bruhn, O. (2004). Offshore-Outsourcing: Von der Idee zum Projekterfolg. In J. Borchers & R. Kneuper. (Eds.), Software Management 2004. Outsourcing und Integration, Fachtagung des GIFachausschusses Management der Anwendungsentwicklung und -wartung im Fachbereich Wirtschaftsinformatik (pp. 34–39). Bad Homburg: GI.

    Google Scholar 

  • Carmel, E., & Agarwal, R. (2002). The maturation of offshore sourcing of information technology work. MIS Quarterly Executive, 1(2), 65–78.

    Google Scholar 

  • Carmel, E., & Nicholson, B. (2005). Small firms and offshore software outsourcing: High transaction costs and their mitigation. Journal of Global Information Management, 13(3), 33–54.

    Google Scholar 

  • Chua, A.-L., & Pan, S. (2006). Knowledge transfer in offshore insourcing. In W. Haseman, D. W. Straub, & S. Klein. (Eds.), Proceedings of the 27th International Conference on Information Systems (pp. 1039–1054). Milwaukee, WI.

    Google Scholar 

  • Coase, R. (1937). The nature of the firm. Economica, 4(November), 386–405.

    Article  Google Scholar 

  • Cohen, J. (1992). A power primer. Psychological Bulletin, 112(1), 155–159.

    Article  Google Scholar 

  • Creswell, J. W. (1994). Research design: Qualitative and quantitative approaches. Thousand Oaks, CA: Sage.

    Google Scholar 

  • Cusick, J., & Prasad, A. (2006). A practical management and engineering approach to offshore collaboration. IEEE Software, 23(5), 20–29.

    Article  Google Scholar 

  • Dibbern, J., Goles, T., Hirschheim, R., & Jayatilaka, B. (2004). Information systems outsourcing: A survey and analysis of the literature. The Data Base for Advances in Information Systems, 35(4), 6–102.

    Google Scholar 

  • Dibbern, J., Winkler, J., & Heinzl, A. (2006). Offshoring of application services in the banking industry: A transaction cost analysis, from Universität Mannheim: http://wifo1.bwl.unimannheim. de/fileadmin/files/publications/Working_Paper_16-2006.pdf.

  • Erber, G., & Sayed-Ahmed, A. (2005). Offshore outsourcing: A global shift in the present IT industry. Intereconomics, 40(2), 100–112.

    Article  Google Scholar 

  • Erickson, J. M., & Ranganathan, C. (2006). Project management capabilities: Key to application development offshore outsourcing. In Proceedings of the 39th Annual Hawaii International Conference on System Sciences (pp. 199–208). Hawaii.

    Google Scholar 

  • Ferguson, E., Kussmaul, C., McCracken, D. D., & Robbert, M. A. (2004). Offshore outsourcing: Current conditions & diagnosis. In D. Joyce, D. Knox, W. Dann, & T. L. Naps. (Eds.), Proceedings of the 35th SIGCSE Technical Symposium on Computer Science Education (pp. 330–331). Norfolk, VA.

    Chapter  Google Scholar 

  • Field, A. (2005). Discovering statistics using SPSS (2nd edition). London: Sage.

    Google Scholar 

  • Fish, K. E., & Seydel, J. (2006). Where IT outsourcing is and where it is going: A study across functions and department sizes. Journal of Computer Information Systems, 46(3), 96–103.

    Google Scholar 

  • Gannon, B., & Wilson, D. (2007). IS offshoring: A proposed maturity model of offshore IS suppliers. In H. Österle, J. Schelp, & R. Winter. (Eds.), Proceedings of the 15th European Conference on Information Systems (pp. 950–960). St. Gallen.

    Google Scholar 

  • Gurung, A., & Prater, E. (2006). A research framework for the impact of cultural differences on IT outsourcing. Journal of Global Information Technology Management, 9(1), 24–43.

    Google Scholar 

  • Heeks, R., Krishna, S., Nicholsen, B., & Sahay, S. (2001). Synching or sinking: Global software outsourcing relationships. IEEE Software, 18(2), 54–60.

    Article  Google Scholar 

  • Hirschheim, R., Loebbecke, C., Newman, M., & Valor, J. (2005). Offshoring and its implications for the information systems discipline. In D. Avison, D. Galletta, & J. I. DeGross. (Eds.), Proceedings of the 26th International Conference on Information Systems (pp. 1003–1018). Las Vegas, NV.

    Google Scholar 

  • Hofstede, G. (1980). Culture's consequences: International differences in work-related values. Beverly Hills, CA: Sage.

    Google Scholar 

  • Jahns, C., Hartmann, E., & Bals, L. (2006/7). Offshoring: Dimensions and diffusion of a new business concept. Journal of Purchasing and Supply Management, 12(4), 218–231.

    Article  Google Scholar 

  • Jennex, M. E., & Adelakun, O. (2003). Success factors for offshore system development. Journal of Information Technology Cases and Applications, 5(3), 12–31.

    Google Scholar 

  • Kakumanu, P., & Portanova, A. (2006). Outsourcing: Its benefits, drawbacks and other related issues. Journal of American Academy of Business, 9(2), 1–7.

    Google Scholar 

  • Kim, S., & Chung, Y. (2003). Critical success factors for IT outsourcing implementation from an interorganizational relationship perspective. Journal of Computer Information Systems, 43(4), 81–90.

    Google Scholar 

  • Klingebiel, N. (2006). Offshoring: Varianten und Wirkungseffekte von Dienstleistungsverlagerungen. Wirtschaftswissenschaftliches Studium : Wist ; Zeitschrift für Ausbildung und Hochschulkontakt, 35(9).

    Google Scholar 

  • Kumar, K., & Willcocks, L. (1996). Offshore outsourcing: A country too far? In J. D. Coelho, J. Tawfik, W. König, H. Krcmar, R. O'Callaghan, & M. Sääksjarvi. (Eds.), Proceedings of the 4th European Conference on Information Systems (pp. 1309–1325). Lisbon, Portugal.

    Google Scholar 

  • Kumar, N., & Palvia, P. (2002). A framework for global IT outsourcing management: Key influence factors and strategies. Journal of Information Technology Cases and Applications, 4(1), 56–75.

    Google Scholar 

  • Kuni, R., & Bhushan, N. (2006). IT application assessment model for global software development. In Proceedings of International Conference on Global Software Engineering (ICGSE) (pp. 92–100). Florianopolis, Brazil.

    Google Scholar 

  • Mann, H. B., & Whitney, D. R. (1947). On a test of whether one of two random variables is stochastically larger than the other. Annals of Mathematical Statistics, 18, 50–60.

    Article  Google Scholar 

  • Maskell, P., Pedersen, T., Petersen, B., & Dick-Nielsen, J. (2007). Learning paths to offshore outsourcing: From cost reduction to knowledge seeking. Industry & Innovation, 14(3), 239–257.

    Article  Google Scholar 

  • Mata, F., Fuerst, W., & Barney, J. (1995). Information technology and sustained competitive advantage:  A resource-based analysis. MIS Quarterly, 19(4), 487–505.

    Article  Google Scholar 

  • Matzke, P. (2007). Offshoring - nicht um jeden Preis. Computerwoche, 30, 28–29.

    Google Scholar 

  • Mayring, P. (2002). Einführung in die qualitative Sozialforschung: Eine Anleitung zum qualitativen Denken. Weinheim: Beltz.

    Google Scholar 

  • McLaughlin, C. P., & Fitzsimmons, J. A. (1996). Strategies for globalizing service operations. International Journal of Service Industry Management, 7(4), 43–57.

    Article  Google Scholar 

  • Menon, M. (2005). A strategic decision framework for offshoring IT services. Journal of Global Business, (Spring), 89–95.

    Google Scholar 

  • Mertens, P. (2005). Die (Aus-)Wanderung der Softwareproduktion: Eine Zwischenbilanz. Erlangen: Univ. Erlangen-Nürnberg Inst. für Informatik.

    Google Scholar 

  • Meyerolbersleben, S. (2005). IT-Offshoring: Was geht? Was geht nicht? Retrieved January 25, 2007, from http://www.ecin.de/strategie/offshoring/print.html.

  • Mirani, R. (2006). Client-vendor relationships in offshore applications development: An evolutionary framework. Information Resources Management Journal, 19(4), 72–86.

    Google Scholar 

  • Mirani, R. (2007). Procedural coordination and offshored software tasks: Lessons from two case studies. Information & Management, In Press, Corrected Proof.

    Google Scholar 

  • Moczadlo, R. (2002). Chancen und Risiken des Offshore-Development: Empirische Analyse der Erfahrungen deutscher Unternehmen. Retrieved November 07, 2006, from http://www.competencesite.de/offshore.nsf/8FB68EAB823EF285C1256D72005BBCD1/$File/studie_offshore_prof_moczadlo.pdf.

  • Murthy, S. (2004). The impact of global IT outsourcing on IT providers. Communications of the AIS, 2004(14), 543–557.

    Google Scholar 

  • Nicholson, B., & Sahay, S. (2004). Embedded knowledge and offshore software development. Information & Organization, 14(4), 329–365.

    Article  Google Scholar 

  • Niederman, F., Kundu, S. K., & Salas, S. (2006). IT software development offshoring: A multi-level theoretical framework and research agenda. Journal of Global Information Management, 14(2), 52–74.

    Google Scholar 

  • Nonaka, I., & Takeuchi, H. (1995). The knowledge-creating company: How Japanese companies create the dynamics of innovation. New York: Oxford Univ. Press.

    Google Scholar 

  • Orlikowski, W. J., & Baroudi, J. J. (1991). Studying information technology in organizations: Research approaches and assumptions. Information Systems Research, 2(1), 1–28.

    Article  Google Scholar 

  • Penrose, E. (1959). The theory of the growth of the firm. New York: Blackwell.

    Google Scholar 

  • Polanyi, M. (1983). The tacit dimension. Gloucester, MA: Smith.

    Google Scholar 

  • Pu Li, J., & Kishore, R. (2006). Offshore or not?: An transaction cost economics analysis. In I. Garcia & R. Trejo. (Eds.), Proceedings of the 12th Americas Conference on Information Systems (pp. 3140–3147).

    Google Scholar 

  • Rajkumar, T., & Mani, R. (2001). Offshore software development: The view from Indian suppliers. Information Systems Management, 18(2), 63–73.

    Article  Google Scholar 

  • Ramarapu, N., Parzinger, M. J., & Lado, A. A. (1997). Issues in foreign outsourcing. Information Systems Management, 14(2), 27–31.

    Article  Google Scholar 

  • Ravichandran, R., & Ahmed, N. (1993). Offshore systems development. Information & Management, 24(1), 33–40.

    Article  Google Scholar 

  • Sayeed, L. (2006). A qualitative investigation of IS offshore sourcing. In I. Garcia & R. Trejo. (Eds.), Proceedings of the 12th Americas Conference on Information Systems (pp. 3199–3206).

    Google Scholar 

  • Schaaf, J., & Weber, J. (2005). Offshoring report 2005: Ready for take-off. Retrieved November 06, 2006, from http://www.dbresearch.de/PROD/DBR_INTERNET_DE-PROD/PROD0000000000188986.pdf.

  • Schaffer, E. M. (2006). A decision table: offshore or not? Interactions, 13(2), 32–33.

    Article  Google Scholar 

  • Scheibe, K. P., Mennecke, B. E., & Zobel, C. W. (2006). Creating offshore-ready IT professionals: A global perspective and strong collaborative skills are needed. Journal of Labor Research, 27(3), 275–290.

    Article  Google Scholar 

  • Siegel, S., & Castellan, N. J. (1988). Nonparametric statistics for the behavioral sciences (2nd edition). New York: McGraw-Hill.

    Google Scholar 

  • Smith, M. A., Mitra, S., & Narasimhan, S. (1996). Offshore outsourcing of software development and maintenance: A framework for issues. Information & Management, 31(3), 165–175.

    Article  Google Scholar 

  • Srivastava, S., & Theodore, N. (2005). A long jobless recovery: Information technology labor markets after the bursting of the high-tech bubble. WorkingUSA, 8(3), 315–326.

    Article  Google Scholar 

  • Stack, M., & Downing, R. (2005). Another look at offshoring: Which jobs are at risk and why? Business Horizons, 48(6), 513–523.

    Article  Google Scholar 

  • Wade, M., & Hulland, J. (2004). Review: the resource-based view and information systems research: Review, extension, and suggestions for future research. MIS Quarterly, 28(1), 107–142.

    Google Scholar 

  • Watjatrakul, B. (2005). Determinants of IS sourcing decisions: A comparative study of transaction cost theory versus the resource-based view. Journal of Strategic Information Systems, 14(4), 389–415.

    Article  Google Scholar 

  • Westner, M. (2007). Information systems offshoring: A review of the literature (Dresdner Beiträge zur Wirtschaftsinformatik No. 51/07). Dresden.

    Google Scholar 

  • Westner, M., & Strahringer, S. (2008). Evaluation criteria for selecting offshoring candidates: An analysis of practices in German businesses. Journal of Information Technology Management, 19(4), 16–34.

    Google Scholar 

  • Wiener, M. (2006). Critical success factors of offshore software development projects: The perspective of German-speaking companies. Wiesbaden: Dt. Univ.-Verl.

    Google Scholar 

  • Wilcoxon, F. (1945). Individual comparisons by ranking methods. Biometrics, 1(f), 80–83.

    Google Scholar 

  • William, A., Mayadas, F., & Vardi, M. Y. (2006). Globalization and offshoring of software: A report of the ACM job migration task force. Retrieved December 12, 2006, from Association for Computing Machinery: http://www.acm.org/globalizationreport.

  • Williamson, O. E. (1985). The economic institutions of capitalism. New York: Free Press.

    Google Scholar 

  • Winkler, J., Dibbern, J., & Heinzl, A. (2006). Success in offshoring of application development – does culture matter? In J. Ljunberg & M. Andersson. (Eds.), Proceedings of the 14th European Conference on Information Systems (pp. 1640–1650). Goteborg.

    Google Scholar 

  • Yan, Z. (2004). Efficient maintenance support in offshore software development: A case study on a global e-commerce project. In D. Damian, F. Lanubile, E. Hargreaves, & J. Chisan. (Eds.), Proceedings of the 3rd International Workshop on Global Software Development (pp. 12–18). IEEE CS Press.

    Google Scholar 

  • Yin, R. (1996). Case study research: Design and methods (2nd edition). Beverly Hills, CA: Sage.

    Google Scholar 

  • ZEW (2007). IKT-Umfrage 2007: Internetwirtschaft weiter auf dem Vormarsch, from Zentrum für Europäische Wirtschaftsforschung GmbH: ftp://ftp.zew.de/pub/zew-docs/div/IKTRep/IKT_Report_2007.pdf.

    Google Scholar 

Download references

Authors
  1. Markus K. Westner
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

Copyright information

© 2009 Gabler | GWV Fachverlage GmbH

About this chapter

Cite this chapter

Westner, M.K. (2009). Offshore Suitability: Criteria for Selecting IS Applications or Projects for Offshoring. In: IS Offshoring. Gabler. https://doi.org/10.1007/978-3-8349-8407-4_3

Download citation

Publish with us

Policies and ethics

Search

Navigation