Measurement and improvement of offshoring effectiveness

This study discusses IT outsourcing from a vendor´s perspective and proposes measures to improve offshoring effectiveness. A detailed investigation was conducted to learn why outsourcing ventures fail, how to effectively measure up to service provider capability, and how to deliver strategic value to the end customer with an emphasis on offshoring strategy and offshore resource effectiveness as the two important differentiators in a make-or-buy decision. Measurement metrics for each of the two items were devised to estimate their effect on offshoring effectiveness. We spoke to some of the top 10 IT vendors in India, collected offshoring data from both clients and vendors, and used the data to validate our decision framework. The framework helped us to investigate current industry practices in IT outsourcing, identify issues and problems beyond the obvious advantages of outsourcing, and propose measures to assess offshoring effectiveness. The investigation gave us an insight on how industry practices differ, and an opportunity to record the best practices and suggest possible improvements in the service or product delivery cycle to enhance customer experience.