From Offshore Outsourcing to Offshore Insourcing: Three Stories

Expectations and Achievements: A Longitudinal Study on an Offshoring Strategy

“…For practitioners, the results of our longitudinal study confirm the view that software companies do have high expectations from implementing offshoring strategies, and like in other related studies these expectations are neither clear cut, nor can their achievement be taken for granted [1,2,11]. For researchers, our study shows that researchers should account for the complexity of the offshoring strategy and especially for the level of maturity of the strategy when interpreting the results of the study in order to make a credible industrial empirical study.…”

“…Some of them, such as [1] and [2], apply exploratory case study approach, while others, such as [8] mentioned above, aggregate the data from many projects with the help of a survey instrument. There are also secondary studies, such as [3] and [9], that aim at collecting and synthesizing evidence from existing empirical studies.…”

“…Moe et al in [2] discuss their findings from an empirical investigation of three Scandinavian small and medium software companies failing in their offshore outsourcing collaborations to Asia and further turning to offshore insourcing instead. Although in all three cases offshore outsourcing was driven by the cost reduction strategies and inability to employ locally, the failure in this study is associated with poor quality, decreased productivity and various other obstacles that finally led the outsourcing contracts to cancellation.…”

“…The popularity of global software engineering (GSE) is fueled by the rumors of significant cost savings. Software companies are attracted by the perceived benefits of cheaper, faster and better development [1] and hence offshoring today is practiced not only by multinational collaborations, but also by small and medium enterprises [2]. Despite its popularity, a systematic literature review on empirical evidence in global software engineering indicates that there are more problem reports than success stories [3].…”

“…An experienced reader of research material in the field, however, would most likely be accustomed to varying opinions ranging from significant success to total failure. For example, in an industry report Burger claims that his company saves several millions of euros per year [4], while lessons learned from a multiple-case study conducted at three Scandinavian companies suggest that first outsourcing contracts in all cases failed due to low productivity, poor quality and other collaboration troubles [2].…”