The Journey to New Lands: Utilizing the Global IT Workforce Through Offshore-Insourcing
MANAGING IT PROFESSIONALS IN THE INTERNET AGE, P. Young & S. Huff, eds., 1st ed., pp. 277-318, IGI Publishing, 2007
43 Pages Posted: 16 Jun 2008 Last revised: 25 Oct 2012
Date Written: 2007
'Offshoring' implies that service providers are IT personnel located in a country which is different from the client's country; this is also known as global-sourcing or offshore-sourcing. For example, both China and India may be considered as 'offshore' countries with respect to the United Kingdom or USA. Furthemore, 'insourcing' implies that the service providers are client employees (who work for its subsidiary or internal IT department). Hence, offshore-insourcing (or global-insourcing) implies that the client's IT department (or subsidiary) that provides IT services is located in a country that is different from the client's country.
This chapter introduces a prescriptive conceptual framework from the practitioner's perspective for the 'offshore-insourcing' journey. In the decision phase of offshore-insourcing, we answer the questions 'Why to insource from offshore?', 'What to insource from offshore?', and 'Where to offshore?' In the implementation phase we answer the question 'How to insource from offshore?', and describe the importance of evaluating outcomes. In the process of answering these questions, we discuss insourcing vs. outsourcing and the possible need for offshoring. We think of ways to select the IT functions that can be insourced from offshore, and also look at the popular offshore destinations. We discuss process of managing change, setting up the offshore center, recruiting IT professionals at offshore, and managing the IT professionals at onshore and offshore within the ambit of the global delivery model. Throughout the decision and implementation phases of offshore-insourcing, the focus is on the challenges related to managing IT personnel.
The appendixes provide a comparison of offshore-insourcing scenarios in China versus India. Many multinationals like Microsoft, General Electric, Hewlett-Packard, Texas Instruments, Google, and IBM that have set up research labs and other facilities in China and India to take advantage of skilled professionals through offshore-insourcing.
Keywords: Offshore, Offshoring, Insourcing, Multinational, MNE, MNC, Greenfield, International, Entrepreneurship, Outsourcing, Global
JEL Classification: F2, L1, L2, L8, M1, M3, M5
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