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From Offshore Outsourcing to Offshore Insourcing: Three Stories

Published on Aug 1, 2012 in ICGSE (International Conference on Global Software Engineering)
· DOI :10.1109/ICGSE.2012.33
Nils Brede Moe21
Estimated H-index: 21
(SINTEF),
Darja Å mite3
Estimated H-index: 3
(BTH: Blekinge Institute of Technology),
Geir Kjetil Hanssen15
Estimated H-index: 15
(SINTEF)
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Abstract
Most large software companies are involved in offshore development of some sort, and now the trend is that small and medium sized companies are also going global. While empirical research suggests that offshoring are not always successful, evidence explaining the reasons for terminated collaborations is scarce, especially for small and medium sized companies. In this paper we explore the stories of three Scandinavian medium-sized software companies that have terminated their offshore outsourcing relationships and changed to offshore insourcing arrangements. The main reason for termination was disappointing low quality of the software delivered, being caused by insufficient domain knowledge, high turnover and a lack of motivation among the remote and external developers. We apply the theory of single-loop and double-loop learning in order to explain why the companies failed to correct the experienced problems, and the theory of escalating commitment to explain why the companies did not correct the failing course of action earlier. Finally we describe the change in the choice of the principle sourcing strategy from outsourcing to insourcing.
  • References (24)
  • Citations (16)
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References24
Newest
Published on Jul 1, 2012in Journal of Systems and Software2.56
Geir Kjetil Hanssen15
Estimated H-index: 15
(NTNU: Norwegian University of Science and Technology)
Software ecosystems is an emerging trend within the software industry, implying a shift from closed organizations and processes towards open structures, where actors external to the software development organization are becoming increasingly involved in development. This forms an ecosystem of organizations that are related through the shared interest in a software product, leading to new opportunities and new challenges to the industry and its organizational environment. To understand why and ho...
Published on Aug 1, 2010in Information & Software Technology2.92
Rafael Prikladnicki18
Estimated H-index: 18
(PUCRS: Pontifícia Universidade Católica do Rio Grande do Sul),
Jorge Luis Nicolas Audy14
Estimated H-index: 14
(PUCRS: Pontifícia Universidade Católica do Rio Grande do Sul)
Context: Distributed Software Development (DSD) has recently become an active research area. Although considerable research effort has been made in this area, as yet, no agreement has been reached as to an appropriate process model for DSD. Purpose: This paper is intended to identify and synthesize papers that describe process models for distributed software development in the context of overseas outsourcing, i.e. ''offshoring''. Method: We used a systematic review methodology to search seven di...
Published on Feb 1, 2010in Empirical Software Engineering4.46
Darja Šmite13
Estimated H-index: 13
(BTH: Blekinge Institute of Technology),
Claes Wohlin46
Estimated H-index: 46
(BTH: Blekinge Institute of Technology)
+ 1 AuthorsRobert Feldt26
Estimated H-index: 26
(BTH: Blekinge Institute of Technology)
Recognized as one of the trends of the 21st century, globalization of the world economies brought significant changes to nearly all industries, and in particular it includes software development. Many companies started global software engineering (GSE) to benefit from cheaper, faster and better development of software systems, products and services. However, empirical studies indicate that achieving these benefits is not an easy task. Here, we report our findings from investigating empirical evi...
Tracy Hall27
Estimated H-index: 27
(Brunel University London),
Nathan Baddoo14
Estimated H-index: 14
(University of Hertfordshire)
+ 2 AuthorsHelen Sharp31
Estimated H-index: 31
(OU: Open University)
Motivated software engineers make a critical contribution to delivering successful software systems. Understanding the motivations of software engineers and the impact of motivation on software engineering outcomes could significantly affect the industry's ability to deliver good quality software systems. Understanding the motivations of people generally in relation to their work is underpinned by eight classic motivation theories from the social sciences. We would expect these classic motivatio...
Published on May 1, 2008in Information & Software Technology2.92
Ashley A. Bush13
Estimated H-index: 13
(Florida State University College of Business),
Amrit Tiwana39
Estimated H-index: 39
(Iowa State University),
Tsuji Hiroshi32
Estimated H-index: 32
(OPU: Osaka Prefecture University)
Although Japan represents the single largest Asian market and 10% of the global software outsourcing market, little is understood about how Japanese companies make software project outsourcing decisions. Tried-and-tested outsourcing models consistently fail to predict the outsourcing decisions of Japanese companies, leaving global software development companies with little usable guidance in the Japanese outsourcing market. Analyses of 396 software project outsourcing decisions made by 33 IT man...
Mary C. Lacity45
Estimated H-index: 45
(UMSL: University of Missouri–St. Louis),
Leslie P. Willcocks63
Estimated H-index: 63
(LSE: London School of Economics and Political Science),
Joseph W. Rottman15
Estimated H-index: 15
(UMSL: University of Missouri–St. Louis)
Purpose – To identify key lessons, trends and enduring challenges with global outsourcing of back office services.Design/methodology/approach – The authors extract lessons, project trends, and discuss enduring challenges from a 20 year research program conducted by these authors and their extended network of co‐authors and colleagues.Findings – The authors identify seven important lessons for successfully exploiting the maturing Information Technology Outsourcing (ITO) and Business Process Outso...
Published on Sep 3, 2008
Steinar Hole1
Estimated H-index: 1
(NTNU: Norwegian University of Science and Technology),
Nils Brede Moe21
Estimated H-index: 21
(SINTEF)
Global Software Development (GSD) has gained significant popularity as an emerging paradigm. Companies also show interest in applying agile approaches in distributed development to combine the advantages of both approaches. However, in their most radical forms, agile and GSD can be placed in each end of a plan-based/agile spectrum because of how work is coordinated. We describe how three GSD projects applying agile methods coordinate their work. We found that trust is needed to reduce the need o...
Published on Aug 1, 2007 in ICGSE (International Conference on Global Software Engineering)
Rafael Prikladnicki18
Estimated H-index: 18
,
Jorge Luis Nicolas Audy14
Estimated H-index: 14
+ 1 AuthorsT.C. de Oliveira2
Estimated H-index: 2
(PUCRS: Pontifícia Universidade Católica do Rio Grande do Sul)
Distributed Software Development involves a number of different business models, and companies intending to embark on the journey of distributed development have difficulty choosing the model(s) that suits their process and current software practice. More literature that presents similarities as well as differences among these models, in terms of processes, practices and challenges that characterize them, is thus becoming critical to software practitioners. This paper intends to bring more knowl...
Published on Aug 1, 2007 in ICGSE (International Conference on Global Software Engineering)
Gerd Höfner3
Estimated H-index: 3
(Siemens),
V. S. Mani4
Estimated H-index: 4
(Siemens)
Increasingly software product development is being globally distributed. Earlier research has discussed the challenges of global software development and practices to mitigate them. We describe a generic framework for establishing offshore development centers that is based on good practices to overcome these challenges. We share our successful experience in applying this framework to a new offshore software development center in India for a German organization. We believe that the framework scal...
Published on Aug 1, 2007 in ICGSE (International Conference on Global Software Engineering)
Alexander Boden12
Estimated H-index: 12
(University of Siegen),
Bernhard Nett7
Estimated H-index: 7
(University of Siegen),
Volker Wulf35
Estimated H-index: 35
(University of Siegen)
Global software development has become an important issue for small and medium enterprises. However, the distinct requirements of SME are still not so well understood. In order to contribute to the discussion we present case studies in two small German software companies that engage in offshoring of software development to Eastern Europe. By applying Strauss' articulation work framework we show to what extent SME rely upon situated coordination practices in order to warrant their agility. These ...
Cited By16
Newest
Published on May 27, 2018
Julian M. Bass15
Estimated H-index: 15
(University of Salford),
Sarah Beecham20
Estimated H-index: 20
+ 1 AuthorsJohn Noll15
Estimated H-index: 15
(UEL: University of East London)
High staff turnover has a negative impact on software development productivity and product quality. Further, offshore outsourcing has a widely held reputation for particularly poor employee retention. Interestingly, in-house sites (regardless of location) do not suffer such high levels of staff turnover. We want to understand the factors affecting employee retention in-house and offshore outsourced settings, to better understand the potential impact of staff turnover on global software developme...
Published on May 20, 2017 in ICGSE (International Conference on Global Software Engineering)
Christof Ebert23
Estimated H-index: 23
Many companies work with suppliers to increase flexibility, focus on their own core competencies and improve efficiency and cost along the supply chain. Working with suppliers and effectively integrating them to complex software supply chains is far from easy. Savings are much smaller and problems are more difficult to cure than with internal development. Obviously suppliers need to optimize both on content and business and thus do not necessarily deliver according to initial commitments. Such d...
Published on Aug 1, 2016 in ICGSE (International Conference on Global Software Engineering)
Christof Ebert23
Estimated H-index: 23
,
Marco Kuhrmann14
Estimated H-index: 14
(Maersk),
Rafael Prikladnicki18
Estimated H-index: 18
(PUCRS: Pontifícia Universidade Católica do Rio Grande do Sul)
Professional software products and IT systems and services today are developed mostly by globally distributed teams, projects, and companies. Successfully orchestrating Global Software Engineering (GSE) has become the major success factor both for organizations and practitioners. Yet, more than a half of all distributed projects does not achieve the intended objectives and is canceled. This paper summarizes experiences from academia and industry in a way to facilitate knowledge and technology tr...
Published on Jul 1, 2015in IEEE Software2.94
Darja Smite3
Estimated H-index: 3
(BTH: Blekinge Institute of Technology),
Fabio Calefato13
Estimated H-index: 13
(University of Bari),
Claes Wohlin46
Estimated H-index: 46
(BTH: Blekinge Institute of Technology)
Researchers examined published studies of global software engineering to determine whether offshoring actually yielded cost savings. Not enough evidence existed to reach the verdict that offshoring reduced costs.
Published on Oct 1, 2014in Empirical Software Engineering4.46
Nils Brede Moe21
Estimated H-index: 21
(SINTEF),
Darja Šmite13
Estimated H-index: 13
(BTH: Blekinge Institute of Technology)
+ 1 AuthorsHamish T. Barney4
Estimated H-index: 4
(UNSW: University of New South Wales)
Most large software companies are involved in offshore development, now small- and medium-sized companies are starting to undertake global sourcing too. Empirical research suggests that offshoring is not always successful; however, only a few comprehensive failure stories have been reported. The objective of our study has been to understand why small and medium-sized companies terminate their offshore outsourcing relationships and what alternative arrangements they undertake afterwards. Therefor...
Published on Jan 1, 2014
Mei Li , Zhuolun Li , Shan Ling Pan35
Estimated H-index: 35
(UNSW: University of New South Wales)
Recent years, offshore outsourcing has received large amount of attention from both industry and academia because of its attractive advantages such as cost reduction, talent access. As an alternative way to implement information systems in operation management, offshore insourcing has been greatly overlooked. Though organizations shun from the contractual obligations in offshore insourcing, they are still encountered with plenty of thorny decisions and communications because of the do-it-yoursel...
Published on Jan 1, 2014
In companies of all sizes, projects are being set up across several development sites, separated by distance, time zones, and cultural differences. In the past, companies focused on outsourcing cer-tain software projects to low-cost countries. To-day, companies often instead choose to establish their own sites in different countries, enabling access to sufficient personnel and technology knowledge while ensuring the necessary control over staff turnover and protection of intellectual capital.
Published on Jan 1, 2014in arXiv: Software Engineering
There is an increasing need for organizations to collaborate with internal and external partners on a global scale for creating software-based products and services. Many aspects and risks need to be addressed when setting up such global collaborations. Different types of collaborations such as engineering collaborations or innovation-focused collaborations need to be considered. Further aspects such as cultural and social aspects, coordination, infrastructure, organizational change process, and...
Published on Jan 1, 2014in IT Professional2.42
Torgeir Dingsøyr26
Estimated H-index: 26
(NTNU: Norwegian University of Science and Technology),
Darja Šmite13
Estimated H-index: 13
(BTH: Blekinge Institute of Technology)
Software is increasingly developed in global projects, and such projects are challenged by distance, different time zones, and cultural differences. Knowledge management is central to ensuring effective development of a product with the right features and the right level of quality. A central question then is what knowledge management approach to apply in global software development. This article draws on established research in software engineering, combined with three focus groups in two globa...
Published on Jan 1, 2014
Darja Šmite13
Estimated H-index: 13
(BTH: Blekinge Institute of Technology)
This chapter is dedicated to companies engaged in collaborative software projects with staff distributed across several locations. The chapter is organized around ten problem areas. Each problem area starts with a common misconception, followed by a discussion of complexities associated with distributed development as opposed to co-located development, practices known for addressing these complexities, and a short list of implications for practice. The aim is to illuminate the key complexities o...