Unless organizations recognize the unique challenges
associated with remote management in offshoring and provide
appropriate training to their project managers, their initiatives
are likely to face increased levels of failure risk.
needs almost always results in a high number of
flawed technical decisions that must be revisited and
corrected at later stages.” Thus, it may be useful to
work with a vendor familiar with the native business
context of the client. This may be especially valuable
when the project requirements are not well structured
and design decisions will need to be made during the
With respect to technical know-how, most panelists acknowledged that offshore vendors are more
often than not adept in software development work.
But the experts also indicated that without easy access
to the assigned resources and a clear visibility of their
working patterns, assessing vendor capabilities can be
tricky. For example, one panelist warned that “any
large offshore outsourcer will likely have a claim of a
high CMMI [Capability Maturity Model Integra-tion] level. However, this is not fully indicative of the
process maturity of the actual team that will be working on the project.” Another cautioned that “the
available skills and knowledge are sometimes misrepresented by offshore management or are not available
when needed on the project schedule.” While a precontract evaluation can help, the experts commented
that assessing a vendor’s technical capabilities can be
difficult due to the “black box” nature of the offshore
Offshore projects are by their very nature risky
undertakings. As the study findings reveal, such
projects face a combination of traditional project
risks as well as a set of threats that are fairly unique
to the offshore environment. Unquestionably, fundamental project management skills are essential in
guiding such projects. However, such skills alone are
likely to be insufficient in directing offshore initiatives effectively. Unless organizations recognize the
unique challenges associated with remote management in offshoring and provide appropriate training
to their project managers, their initiatives are likely
to face increased levels of failure risk.
Because our findings represent the input of a panel
of experts with extensive offshore outsourcing experience, we believe these findings are broadly applicable
across diverse project types and business contexts.
Nevertheless, we recognize that individuals in charge
of offshore projects may sometimes face unique organizational settings (such as a heightened sensitivity to
PR issues surrounding offshoring, or a lack of needed
resources). Such distinctive circumstances will require
the development of a customized risk profile for the
project, that may differ from the one presented here.
We hope that the set of the risk factors and the
insights that were generated by the expert panel will
provide a useful starting point for such managers. c
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CHARALAMBOS L. IACOVOU ( firstname.lastname@example.org) is an
associate professor of management at the Babcock Graduate School of
Management at Wake Forest University in Winston-Salem, NC.
ROBBIE NAKATSU ( email@example.com) is an associate
professor of computer information systems at the College of Business
Administration at Loyola Marymount University in Los Angeles, CA.
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