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Risks in offshore IT outsourcing: A service provider perspective

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  • Aundhe, Madhuchhanda Das
  • Mathew, Saji K.

Abstract

Summary Offshore outsourcing of Information Technology (IT) services is the prevalent practice in global businesses today. Despite the strategic advantages and cost benefits that offshore outsourcing offers, outsourcing relationships also involve risks, for both the client, as well as the service provider - a fact that is evidenced by the reported failures of such engagements. Some of the prior researches in this area have focused on identifying various types of client risks and their sources. However, the study of risks from a service provider's perspective has not received due treatment in literature. This study analyses offshore IT outsourcing risks from the perspective of service providers. A case based approach using the principles of grounded theory was used for studying the risks. Theoretical sampling was used to collect data from 5 mid-tier offshore third party service providers based in Bangalore, India. From our coding and analysis three broad categories of service provider risks emerged, namely, macroeconomic, relationship specific and project specific. Relationship maturity, nature of contract, nature of service or project and nature of client were identified as contextual factors which influence the degree of risk.

Suggested Citation

  • Aundhe, Madhuchhanda Das & Mathew, Saji K., 2009. "Risks in offshore IT outsourcing: A service provider perspective," European Management Journal, Elsevier, vol. 27(6), pages 418-428, December.
    • Handle: RePEc:eee:eurman:v:27:y:2009:i:6:p:418-428
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    Cited by:

    1. Matilda Alexandrova, 2015. "Risk Factors in IT Outsourcing Partnerships: Vendors’ Perspective," Global Business Review, International Management Institute, vol. 16(5), pages 747-759, October.
    2. Vanita Bhoola, 2015. "Impact of Project Success Factors in Managing Software Projects in India: An Empirical Analysis," Business Perspectives and Research, , vol. 3(2), pages 109-125, July.
    3. Dahlgrün, Philipp W. & Bausch, Andreas, 2019. "How Opportunistic Culture Affects Financial Performance in Outsourcing Relationships: A Meta-Analysis," Journal of International Management, Elsevier, vol. 25(1), pages 81-100.
    4. Philip Müller & Martin Franz, 2019. "Transnational labour migration and the offshoring of knowledge-intensive business services within global production networks: The case of a German automotive company in Turkey," Environment and Planning A, , vol. 51(6), pages 1350-1369, September.
    5. Mariana Almeida & Raquel Meneses, 2013. "In The Shadow Of Offshoring: An Exploratory Study Of The Expectations Of Providers," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 1(1), pages 160-173, May.
    6. Ganotakis, Panagiotis & Angelidou, Sofia & Saridakis, Charalampos & Piperopoulos, Panagiotis & Dindial, Miguel, 2023. "Innovation, digital technologies, and sales growth during exogenous shocks," Technological Forecasting and Social Change, Elsevier, vol. 193(C).
    7. Anil Nair & Mehdi Sharifi Khobdeh & Aydin Oksoy & Orhun Guldiken & Chris H. Willis, 2023. "A review of strategic management research on India," Asia Pacific Journal of Management, Springer, vol. 40(4), pages 1341-1392, December.
    8. Smita Prashant Chattopadhyay & Madhuchhanda Das Aundhe, 2021. "Vendor boundary spanning in Indian Information Technology (IT) companies," Asia Pacific Journal of Management, Springer, vol. 38(3), pages 1139-1177, September.
    9. Paluch, Stefanie & Wünderlich, Nancy V., 2016. "Contrasting risk perceptions of technology-based service innovations in inter-organizational settings," Journal of Business Research, Elsevier, vol. 69(7), pages 2424-2431.
    10. Sukruth Suresh & T. Ravichandran, 2022. "Value Gains in Business Process Outsourcing: The Vendor Perspective," Information Systems Frontiers, Springer, vol. 24(2), pages 677-690, April.
    11. repec:ntu:ntugeo:vol1-iss1s-13-160 is not listed on IDEAS
    12. Claudiu BRANDAS, 2010. "Risks and Audit Objectives for IT Outsourcing," Informatica Economica, Academy of Economic Studies - Bucharest, Romania, vol. 14(1), pages 113-118.

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