Offshoring effectiveness

Abstract

This study takes a refreshing look at IT outsourcing from a vendor's perspective and discusses best practices required to effectively manage offshore business needs and offshoring effectiveness. We have conducted a detailed investigation to learn why outsourcing ventures fail, how to effectively measure up to service provider capability, and how to deliver strategic value to the end customer. Extant literature does not talk about the vendor's issues and problems in outsourcing, and our investigation emphasized the vendor's perspective on offshoring strategy and offshore resource effectiveness as the two important differentiators in a make-or-buy decision. Measurement metrics for each of the two items were devised to estimate their effect on offshoring effectiveness. We spoke to some of the top 10 IT vendors in India, collected offshoring data from both clients and vendors, and used the data to validate our decision framework. The framework helps us to investigate current industry practices in IT outsourcing, identify issues and problems beyond the obvious advantages of outsourcing, and propose measures to assess offshoring effectiveness. The investigation gave us an opportunity to record the best IT practices as well as suggest possible improvements in the service or product delivery cycle to enhance customer experience. ACKNOWLEDGEMENTS The thesis is a result of a collective effort made by many individuals. First, thanks are due to my subject matter expert at SJSU, Mr. S.K. Reddy who has provided valuable input on outsourcing from both a client and vendor's perspective. Drawing on his vast experience as global alliance manager of multinational corporations, he has also helped me understand outsourcing issues which are not available in fine print. Second, great appreciation is due to my committee members, Mr. Bharat Marathe and Dr. Jerry Gao, who brought in valuable insights to my paper from their rich experience and were always there to lend a helping hand. Thirdly, I am thankful to my wife who has made many sacrifices to accommodate my irregular writing habits and the long hours I have spent brooding on my thesis, and was always there as a pillar of support and encouragement. The efforts of Alena Filip, the IRB/Thesis coordinator for the Office of Graduate Studies and Research, are commended. Alena's involvement and efforts at helping students achieve success by being informed and prepared are noteworthy. Lastly, additional thanks are due to the input from the readers of the thesis as well as many others, who remain anonymous, and to all the faculty who have identified ways to help me in the path to success in completing a well written and readable thesis. v