ABSTRACT
Offshore outsourcing, the transfer of IT service delivery responsibility to a provider operating from a continent different from the recipient’, is experiencing a growth period with double-digit figures. In comparison with ordinary outsourcing, however, it does require some extra governance. And since not all offshore outsourcing relationships are going well, there is a need to understand these governance aspects better. To that end, the authors have attempted to outline in this chapter the knowledge and know-how collected in the large amount of business literature (Lacity and Hirschheim 1993, 1995; Klepper 1995; McFarlan and Nolan 1995; Rajkumar and Dawley 1997; Carmel 1999; Beulen and Ribbers 2003) in which researchers have reported on the difficulties of managing such relationships. We will first, in Section 4.2, take a look at the market developments influencing the rise in offshore outsourcing. Then the risks associated with it will be discussed in Section 4.3. The two most important kinds of IT services involved, software development and infrastructure management, are the subject of Section 4.4, with an emphasis on their characteristics and risk profiles. On this basis the riskmitigating strategies of Section 4.5 are elaborated. The recipient’s and provider’s responsibilities are discussed in Sections 4.6 and 4.7. Section 4.8 contains the conclusions. Finally, section 4.9 is a case study on changing requirements in an offshore outsourcing engagement.
