Offshore Outsourcing Business Models: An Analysis of Four Cases

Abstract

This chapter discusses some key themes and issues in relation to IT offshore outsourcing. In particular it provides an analysis of four U.K. based companies undertaking IT offshore outsourcing projects. Each company represents an example of different approaches to outsourcing. These approaches are argued to represent more than just approaches and that they are in fact significantly different business models. The four different models are: (i) direct offshore outsourcing, (ii) third party offshore outsourcing, (iii) joint venture offshore outsourcing, and (iv) wholly owned subsidiary. These approaches highlight the heterogeneous nature of the offshore outsourcing phenomenon. A framework is then proposed based on the literature and the study which provides four important elements and related subfactors of interest and importance. This framework is then used to analyze the cases, highlighting some of the drivers and risk factors of the models for decision making from the customer’s perspective.