Case study - ASSESSING THE IMPACTS OF IS OFFSHORING

Case study - ASSESSING THE IMPACTS OF IS OFFSHORING -...

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ASSESSING THE IMPACTS OF IS OFFSHORING: PRELIMINARY CONCLUSIONS QUESTIONING THE VALIDITY OF CULTURAL CONSIDERATION Gannon, Brian, Birkbeck College, University of London, Malet Street, London WC1E 7HX, UK, brian.gannon@vesime.com Wilson, David, Birkbeck College, University of London, Malet Street, London WC1E 7HX, UK, dave@dcs.bbk.ac.uk Abstract This paper defines an analytic framework with which to research the impact of IS offshoring on its various stakeholders and applies this to two significant case studies of offshoring in the financial services industry. It presents conclusions on one particular segment of the research programme, namely the extent to which IS offshoring drives cultural change for IS practitioners in offshore locations. It concludes that the resultant impact is notable, but not different in any significant way to that experienced by any IS practitioner who works overseas. Further, the cultural differences between onshore and offshore practitioners tend to diminish quickly as they adapt to new cultural environments. Key words Offshoring; globalisation; cultural distance; knowledge transfer; multi-national enterprise
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1 INTRODUCTION
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The practice of using low cost labour in distant countries to develop and build products for use in developed economies is long established. It is only in the past decade that this practice – known as offshoring – has become widespread for Information Systems (IS) development. IS offshoring has in the past been limited by supply of skilled offshore resources, poor and expensive enabling technology such as telecommunications, and general lack of expertise in the conduct of distributed application development (Ravichandran & Ahmed,1993). Now it is deployed extensively and is regarded by many as a mature and cost-effective approach to application development and maintenance (Gannon & Wilson, 2007). In consequence, suppliers of offshore IS services have graduated from simple sourcing models such as providing skilled practitioners to do specific tasks to complex and sophisticated cross-border contractual and resourcing arrangements with their customers. New forms of multi-national enterprise (MNE) have emerged, such as Infosys, originating in developing economies and dedicated to exporting labour and IT- enabled services to developed economies. New project and organisational structures are required to take account of the dislocation of staff, which in turn demands new styles and ways of managing activities. Cultural traditions are often disrupted, both for offshore practitioners who come to reside in an onshore location and for the people onshore who encounter them. The effects of such change is still relatively under-researched (King and Torkzadeh, 2006). The perspectives that do exist present a wide range of opinion, from Farrell (2005) who asserts that offshoring offers huge benefits to both organisations and the economy, to Levy (2005) who presents a more cautious view of the benefits of offshoring. This research investigates the impact of offshoring on IS practitioners on the people and organisations
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Case study - ASSESSING THE IMPACTS OF IS OFFSHORING -...

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