Software Outsourcing Relationships Research Articles

Establishing trust in offshore software outsourcing relationships: an exploratory study using a systematic literature review

Offshore software outsourcing is a widely used business strategy for producing high-quality software at low cost. Trust plays a vital role in establishing the offshore software outsourcing relationships between client and vendor organisations. The objective of this research study is to identify factors via systematic literature review (SLR) that are important for establishing trust in offshore software outsourcing relationships. The authors have performed an SLR by applying the customised search strings, which were derived from the research questions. The authors have identified factors such as face-to-face meeting, better communication, contract management between client and vendor, defining processes, tools, procedures and policies, reliable management, knowledge sharing, mutual expectations, better client-vendor relationship and training programmes that are generally considered critical for establishing trust in offshore software outsourcing relationships. The results also reveal the similarities and differences in the factors identified through different study strategies and in different continents. Offshore software outsourcing companies should focus on the frequently cited factors in order to compete in the offshore software outsourcing business.

Managing Software Outsourcing Relationships in Emerging Economies: An Empirical Study of the Chinese Small- and Medium-Sized Enterprises

Small- and medium-sized enterprises (SMEs) are facing great challenges in their information systems (IS) outsourcing relationship management, especially with customized software outsourcing under conditions of technological uncertainty and transaction-specific investments. The problem may be even critical for Chinese SMEs in emerging economies characterized by institutional instability. This article draws on multiple theories to examine antecedents and consequences of the effectiveness of three important interorganizational governance mechanisms, namely, contractual-based and relational-based governance and vendor-specific investments. The results of a survey on 83 software outsourcing projects indicate some interesting patterns that Chinese SMEs use to manage their outsourcing relationships. We found that contractual governance is found to be the only effective mechanism when the outsourcing firm (client) perceives technological uncertainty. On the other hand, with the transaction-specific investments, relational governance, and reciprocal-specific investments by IS vendor would be preferred as effective mechanisms by the outsourcing firm. Our analyses also show that Chinese SMEs in emerging economies would rely on multiple governance mechanisms to enhance outsourcing success. Overall, the findings are in line with the studies stressing the importance of building partnership-style relationships and seeking reciprocal actions in sourcing exchanges.

Establishing and maintaining trust in software outsourcing relationships: An empirical investigation

Our research objective is to understand software outsourcing practitioners’ perceptions of the role of trust in managing client–vendor relationships and the factors that are critical to trust in off-shore software outsourcing relationships. Participants were 12 Vietnamese software development practitioners developing software for Far Eastern, European, and American clients. They identified that cultural understanding, creditability, capabilities, and personal visits are important factors in gaining the initial trust of a client, while cultural understanding, communication strategies, contract conformance, and timely delivery are vital factors in maintaining that trust. We contrast Vietnamese and Indian practitioners’ views on factors affecting trust relationships.

Trust in software outsourcing relationships: An empirical investigation of Indian software companies

This paper investigates trust in software outsourcing relationships. The study is based on an empirical investigation of eighteen high maturity software vendor companies based in India. Our analysis of the literature suggests that trust has received a lot of attention in all kinds of business relationships. This includes inter-company relationships, whether cooperative ventures or subcontracting relationships, and relationship among different parts of a single company. However, trust has been relatively under-explored in software outsourcing relationships. In this paper, we present a detailed empirical investigation of trust in commercial software outsourcing relationships. The investigation presents what vendor companies perceive about getting trust from client companies in outsourcing relationships. We present the results in two parts—(1) achieving trust initially in outsourcing relationships and (2) maintaining trust in ongoing outsourcing relationships. Our findings confirm that the critical factors to achieving trust initially in an outsourcing relationship include previous clients' reference and experience of vendor in outsourcing engagements. Critical factors identified for maintaining trust in an established outsourcing relationship include transparency, demonstrability, honesty, process followed and commitment. Our findings also suggest that trust is considered to be very fragile in outsourcing relationships.

Difficulties in Managing Offshore Software Outsourcing Relationships: An Empirical Analysis of 18 High Maturity Indian Software Companies

In this paper, we present an empirical investigation of difficulties in offshore software outsourcing relationships. We undertake an investigation of eighteen high maturity software vendor companies based in India. An analysis of the literature suggests that the difficulties in offshore outsourcing relationships have been relatively unexplored. Therefore a detailed investigation of the difficulties in commercial offshore software outsourcing relationships is presented. We use the multiple case study research methodology in this study. We collect qualitative data through the standardized open-ended interviews and analyze it through a grounded theory approach. 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. The main offshore software outsourcing difficulties uncovered by this investigation include cultural differences, expectation mismatch, language differences, loss of control, job loss and transition. We also propose provisional solutions to the emergent difficulties identified in this study.

Synching or sinking: global software outsourcing relationships

Global software outsourcing is the outsourcing of software development to subcontractors outside the client organization's home country, India is the leading GSO subcontractor, registering average annual growth of more than 40 percent over the last decade and developing nearly US$4 billion in software for foreign clients in FY 1999. Indian firms now develop software for nearly one-third of the Fortune 5002. The authors investigate the strategies that differentiate successful and unsuccessful value chain moves.

Synching or Sinking: Trajectories and Strategies in Global Software Outsourcing Relationships

To increase the value and reduce the costs and risks of global software outsourcing, clients and developers are 'synching': building congruence along six identified 'COCPIT' dimensions. Case studies from a longitudinal research project identify practical synching strategies used by North American and European clients in their dealings with Indian sub-contractors. However, the cases also identify the limits to synching across physical and cultural distance. These limits – and the shocks to synching that occur over time – must be recognised and addressed if global software outsourcing is to succeed.