National culture and organizational capabilities of IT offshoring services in Kenya

Abstract

The pervasive adoption of outsourced information technology (IT) services has made the multi-billion dollar information technology outsourcing industry become important to individual organizations and governments as well. IT offshoring elevates the importance of country destination where services are outsourced to with increasing attention shifting to offshore destinations in Africa. African countries are emerging as offshore destinations because they are regarded as low cost regions, while the traditional ‘captive’ destinations such as India and China are becoming middle income and thus with increasing cost levels. To examine the influence of organization capability and national cultures in offshoring success, a case study was used and theoretical thematic analysis employed. From the analysis, this study recommends a framework dubbed the renewal, credibility and sensitivity (RCS) framework. The critical dimensions revolve around the need for Business Process Outsourcing (BPO) firms to enhance their capabilities through organizational renewal; countries to enhance their competitiveness through development of their national credibility; while global stakeholders should recognize that there is a need for development of intercultural competence, not only from vendor perspectives, but also from client organizations. The framework recognizes that the key drivers that underlie the development of offshoring success include the need to build organizational capability, positive convergence of country factor conditions and enhancing intercultural competence. Key words: IT offshoring, business process outsourcing, BPO, Africa, Kenya, organizational capability, national culture.