Offshore Information System Development Process in India: How Practitioners Respond to the Challenges

Abstract

Offshore information systems development (ISD) has been an important practice for the last fifteen or more years, and it will likely continue to be. The potential benefits derived from lower operational costs and complementary time schedules are extremely attractive. Many organizations have successfully realized these benefits; however, others encountered unexpected challenges in the process and decided to move their operational capabilities back onshore. Current research addresses many challenges in the process and describes tools and methods for managing those challenges. However, more work needs to be done to investigate why offshoring works for some organizations but not others. This study investigates the system of offshore ISD through the eyes of practitioners by using grounded theory methods to inductively build theory to understand how they respond to the challenges that they encounter. We present an emergent theoretical model from the analysis of interviews performed with 29 respondents across 10 organizations in the U.S. and India. One portion of this model suggests that Indian organizations differ with respect to the way they respond to the challenge of solving problems that require critical thinking and creative problem-solving. While some organizations respond with an overemphasis on processes, others invest in the training and development of employees to teach them higher-level skills in consulting. This model suggests that organizations can improve performance in offshore ISD by focusing more resources toward hiring the right employees, giving them the necessary training and development, and retaining them for many years.