Critical success factors for offshore software development. The impact of software development outsourcing on the. The author develops a model that comprises 29 critical success factors which are classified into four distinct groups. This study examines the relationship between outsourcing motives, suppliercustomer relationship and perceived customer value in noncore services outsourcing. It identifies major software outsourcing drivers and studies the relationship between them and the growth of the it industry. It plays a crucial role in enhancing marketing effectiveness, optimizing contact strategies, and improving customer experience. How do critical success factors contribute to a successful it outsourcing. A preliminary structure of software outsourcing vendors. The it outsourcing proposal has been growing and becoming popular. The informationweek analytics 2010 business of outsourcing survey, which shows that 6 of 10 it shops outsource some critical function, also notes that almost 30% of those surveyed have fired an outsourcing partner in the last year.
By definition, offshore outsourcing or offshoring refers to outsourcing outside the boundaries of ones country king, 2007. Citeseerx 1 critical success factors for information. Paper presented at the proceedings of the 2010 annual research conference of the south african institute of computer scientists and information technologists, bela bela, south africa. The study is based on an empirical investigation of 18 high maturity software vendor companies based in india. Offshore software development outsourcing osdo is a modern business strategy for developing high quality software at lowwage countries at reduced cost. Knowledge management initiatives in offshore software. Offshore software development outsourcing is a contractual business of highquality software production at offshore destinations with signi. It was discovered that the five factors collectively contribute to software development outsourcing and the growth of the it industry. Barriers in the selection of offshore software development. Information systems is outsourcing is a serious commitment a formal relationship underpinned by a contractual agreement, with longterm consequences among two or more organisations. The vendor organisation provides the agreed software development work in return for remuneration.
We undertake an investigation of eighteen high maturity software vendor companies based in india. Key success factors for managing offshore outsourcing of software production using the ictsupported unified process model. Critical barriers for offshore software development outsourcing vendors. While there are multiple benchmarks that define the success of an outsourced initiative, positive return on investment roi is probably the most noticeable and measurable. The impact of software development outsourcing on the growth.
Six key success factors for outsourcing 2010 may turn out to be a pivotal year in the it outsourcing marketplace. Empirical investigation of success factors for offshore software development outsourcing vendors article pdf available in iet software 61 february 2012 with 327 reads how we measure reads. East european countries, ireland, singapore, vietnam, s africa to name a. However, the success of any offshore project is equally important to both the outsourcer customer and the outsourcing partner vendor. Offshore software development outsourcing is a recent and widely used. Our survey included success factors identified in the previous. Among all the benefits of osd, efficiency has been identified as a major motivation for offshore it outsourcing in the past 10 years lacity and willcocks, 1998, manning et al. Many organisations end up frustrated as they learn that their attempts at is outsourcing have failed. However, some failures could be avoided with knowledge of common pitfalls and critical success factors of. This research study set out to use survey data to explore the critical success factors of agile software development projects using quantitative methods. The objective of this research is to identify the intercultural challenges faced by vendors in osdo relationships. Proceedings of the 11th international conference on. Critical success factors for information systems outsourcing management.
Sop is different to conventional software development. Intercultural challenges mitigation model for software. Offshore software development outsourcing contract from. In this era of competition software companies tend to widespread their goodwill into global market by penetrating into different geographical markets and regions. With regard to the developed model, both the implementation of an online survey and the conduction of two indepth case studies show that the external management factors are particularly relevant for the successful implementation of an offshore software development project and that the perception of the individual critical success factors. Identification of multicriteria for supplier selection in. Objective the objective of this research paper is to analyse the factors that influence software outsourcing clients in the selection of offshore software outsourcing vendors. Empirical investigation of success factors for offshore. The aim was to evaluate the collective effect of these driving factors on the level of outsourcing by the various it firms in nigeria and the consequent growth of the sector in the country. Offshore software development outsourcing is a recent and widely used business strategy for the. Overall, the research seeks to answer these questions. Dec 17, 2015 key success factors for offshore outsourcing. Software outsourcing partnership sop is mutually trusted interorganisational software development relationship between client and vendor organisations based on shared risks and benefits. Paper presented at the technology management for global economic growth picmet, 2010 proceedings of picmet 10.
To 8 acknowledgments handle this threat, we plan to conduct empirical study in osdo industry to validate these. Austen rainer, susan grey, critical factors in software outsourcing. In addition, it takes a vendor s perspective, rather than the client perspective that is mostly used. Global outsourcing can provide a huge payback if done right. We see many offshore business models that fail because they rely way too much on the costsaving factor in their selection process of software development outsourcing vendors. Sep 17, 2002 case studies of a wide range of outsourcing relationship issues reveal several critical success factors for ensuring good decisions and enduring, mutually beneficial relationships. Apsec 09 proceedings of the 2009 16th asiapacific software engineering conference pages 7986 december 01. Barriers in the selection of offshore software development outsourcing vendors. The scope of this article is is offshore outsourcing to vendors in india and china. Jun 17, 2017 this is a hugely complex area and one that i earned a reasonable living from for many years, initially focused on india and subsequently taking in a wide range of countries. Jan 01, 2016 this paper investigates the impact of software development outsourcing on the growth of the it sector in developing countries, especially nigeria. A preliminary study of offshore outsourcing from the manager. Objective to identify various critical success factors csfs that have a positive impact on software outsourcing clients in the selection process of offshore software development outsourcing vendors. The continuing economic crisis has forced companies worldwide to revisit, with greater urgency, basic questions regarding which it functions must remain internal and which can be externalized to glean savings and efficiencies.
Rashid, factors influencing clients in the selection of offshore software outsourcing vendors. How do critical success factors contribute to a successful it. Offshore software development outsourcing is a contractual business of highquality software production at offshore destinations with significant costsaving. Models referring to outsourcing theory sciencedirect. How to find the right vendors for offshore it outsourcing. Based on very less success rate of overall software projects globally, critical success factors csfs for offshore software projects is gaining much importance. Critical success factors for offshoring of enterprise. Pdf critical success factors for software outsourcing.
Results of this study indicate that outsourcing vendors are aware of potential difficulties that could be faced by both vendors and clients in offshore software outsourcing. It was discovered that the five factors collectively contribute to software development outsourcing and. A study of large multinational companies the increasing competition on the market means that multinational companies mncs as well as many other organizations must take advantage of business improvements. In this paper, our research methodology is composed of both empirical study in osdo industry. This paper investigates the impact of software development outsourcing on the growth of the it sector in developing countries, especially nigeria. Context offshore software development outsourcing is a contractual business of high quality software production with significant costsaving. Offshore software development outsourcing is a recent and widely used business strategy for the development of high quality products at low cost. Critical issues of it outsourcing vendors in india. Critical success factors of offshore software development. Rq1 what are the critical success factors csfs for outsourced software development projects from a vendor. Difficulties in managing offshore software outsourcing. An empirical study conference paper june 2010 with 1,151 reads how we measure reads.
In this paper, we analyse indian software outsourcing vendors views on the role of trust in software outsourcing relationships. Critical success factors of offshore software development projects 1 chapter 5 identification of critical success factors 115 chapter 6 analysis of critical success factors. Chapter 3 stateoftheart of it outsourcing 33 chapter 4 management of offshore software development projects 61 part b. Context offshore software development outsourcing is a modern business strategy for producing high quality software at low cost. Is the sopm practically robust in terms of measuring organizations vendor capability for software development outsourcing partnership. Siffat ullah khan1, mahmood niazi1, and rashid ahmad. We focus in this paper on offshore outsourcing of information systems iss. Offshore software development outsourcing osdo is an emerging business paradigm implemented by many software development organisations. Critical success factors for offshore software outsourcing contract. It allows organizations to focus on its core competencies while leveraging the strengths of others, and there are compelling stories about its success. The objective of the research presented in this study is to find critical success factors csfs for. Factors influencing clients in the selection of offshore software outsourcing vendors. Offshore software development outsourcing osdo is a global software engineering paradigm for developing high quality software at low cost in lowwage countries. Osdo faces a variety of challenges including temporal, geographical and intercultural differences.
Culture as a critical success factor for project management journal of information technology management volume xix, number 3, 2008 28 sources a valuable means to reduce cost for it service vendors. The critical success factors common to both clients and vendors are managing constant. This study has identified the success factors which can influence clients in the selection of offshore software outsourcing vendors. The objective of the research presented in this study is to find critical success factors csfs for contract management to assist vendor organisations for successful outcomes of the offshore software outsourcing contract. Ahmad, critical success factors for offshore software development outsourcing vendors.
Our research goal is to provide software outsourcing practitioners with a body of knowledge that can help them to design and implement successful outsourcing initiatives. Solutions for critical challenges in offshore software outsourcing. We study the determinants of contract choice in offshore software development projects and examine how the choice of contract and other factors in the project affect project profits accruing to the. Pdf empirical investigation of success factors for offshore. Our survey included success factors identified in the previous findings of our. Five critical factors to consider before outsourcing customer.
Critical barriers for offshore software development. Study found that critical success factor for outsourcing should focus on the following. A design of an empirical study of the applicability of the technology acceptance model to outsourcing decisions. Pdf context offshore software development outsourcing is a modern business strategy for producing high quality software at low cost. Critical success factors in relationship management for. Oza and palvia 2007 identified critical success factors for effectively managing offshore software outsourcing relationships. Pdf critical success factors for offshore software development. Pdf critical challenges in offshore software development. Five critical factors to consider before outsourcing customer analytics in todays competitive economic environment, customer analytics distinguishes leaders from the laggards. The main offshore software outsourcing difficulties uncovered by this investigation include cultural differences, expectation mismatch, language differences, loss of contr.
However, despite the increasing importance and need for empirically tested body of knowledge on different aspects of gsd, little empirical research has been carried out in order to determine which barriers have a significant influence on software outsourcing clients in the selection process of offshore software development outsourcing vendors. What are the solutionspractices, as identified in the real practice, for proper implementation of the critical success factors in software outsourcing partnership from vendors perspective. Clearly the understanding of such issues is important to the vendors, but also to the clients in order to maintain an effective dyadic relationship. Critical success factors for offshore software development outsourcing vendors. The structural equation method was used to obtain the best fit model. We have conducted an exploratory case study of outsourcing is support services. A common understanding of the typical offshore outsourcing implies a. Critical success factors for outsourcing relationships. However, the integration of global resources is a challenge for organizations pursuing successful project. R empirical evidence in global software engineering. This research provides a complete understanding of the critical success factors from the client, the vendor or both the client and the vendor perspective.
However, software development is both a technical and a social process in which various software modules are integrated, requiring ongoing interaction and synchronisation of. Offshore software outsourcing contract, vendor, practicessolutions, empirical study, systematic. An empirical study of offshore software development. Factors influencing clients in the selection of offshore. There are advantages for contractors seeking to reduce their cost of it infrastructure through delegation of it resources to third parties. Capability, quality and performance of offshore is vendors. A good understanding of the influential factors to software development effort and further precise effort estimate are undoubtedly crucial to any costeffective and controllable software development projects. Intercultural challenges in offshore software development. Empirical investigation of success factors for offshore software. Critical success factors of offshore software develpment. Pdf critical issues of it outsourcing vendors in india. Offshore software development outsourcing is a contractual business of. Software outsourcing partnership sop is a mutually trusted interorganisational software development relationship between client and vendor organisations to. Martin wiener examines the critical success factors of such projects.
Critical success factors for offshoring of enterprise resource planning erp implementations. This research addresses the critical success factors. Outsourcing means using factors which are external to an organization to perform its functions whereas offshore outsourcing relies on using foreign resources to perform those functions. A new process for success management bringing order to a.
An analysis of the literature suggests that the difficulties in offshore outsourcing relationships have been relatively unexplored. Global software development has gained a drastic growth from the last two decades due to the revolution in information and communication technologies icts and the world has become a global village. We aim to investigate the critical factors to achieving trust in outsourcing relationships. Critical success factors for software outsourcing partnership sop.
The present paper proposes a set of key factors to achieve is outsourcing success and also. The objective of this research paper is to identify and analyse factors that are important to be addressed by vendor organisations in order to be competitive in outsourcing business. Results our study reveals both lack of technical capability and poor quality of service and systemprocess as the critical challenges in offshore software development outsourcing. Abstractin this paper, we present an empirical investigation of difficulties in offshore software outsourcing relationships. The data collected from 109 agile projects from a diverse group of organizations of various sizes, industries, and geographic locations provided enough empirical information for statistical. Bush, amrit tiwana, hiroshi tsuji, an empirical investigation of the drivers of software outsourcing decisions in japanese organizations, information and software technology 50 2008 499510, elsevier, science direct sachdev, vishal, iyengar, kishen, will agile methodologies work in offshore outsourcing. Offshore software development osd is a leading business sector in the global it marketplace, and vendors in different countries are opening software development centres to take advantage of new business opportunities. The study became necessary owing to the obvious decline in it implementation in most developing countries despite. A case experience from finland, india, nepal and russia. There is a general lack of research that conducts a theorybased empirical examination of vendor performance, its antecedents, and any mediating variables. These two nations are among the most popular destinations for is outsourcing. Offshore software development outsourcing osdo is an important paradigm of global software engineering for the development of better.
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