Running Head: OUTSOURCING AND ITS IMPACT ON SMBs

Global IT Outsourcing and Onshore IT Outsourcing: Their Impact on Local SMBs Michael C. Ledesma mcledesma@csupomona.edu California State Polytechnic University, Pomona

OUTSOURCING AND ITS IMPACT ON SMBs

Abstract The small to medium sized business often engage in IT outsourcing contracts is it due to a cost savings decision like large corporations make or is it due to a lack of resources such as funds and manpower? Large companies use several types of measures and methods to manage their global IT outsourcing contracts to ensure their success and the issue at hand is can these small to medium sized firms use these same measures to ensure success of their smaller contracts. A survey was taken from a small sample of local small to medium sized businesses to poll their input on these two issues. The results show that small companies, due to their small nature, tend to outsource their small IT infrastructure needs to onshore contracts because they choose not to maintain it internally. The results also show that these smaller companies share the same pitfalls that larger companies do and can take the very same measures and methods that large companies use to ensure the success of their small IT outsourcing projects. Keywords Global IT Outsourcing, Onshore IT Outsourcing, IT Infrastructure,

Introduction In the U.S. in 2009, there was an estimated 27.5 million small businesses, 157,000 medium sized businesses, and approximately 18,311 large businesses (Babin & Nicholson, 2011). These statistics may seem staggering, but it is a common pattern in most other developed countries for small to medium sized business. These numbers continue to grow but so has the need for IT infrastructure and services for these small to medium sized businesses. Global IT outsourcing is an option for large businesses but why not for small to medium sized businesses. This research aims to demonstrate that global IT outsourcing is an advantage only to large

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businesses primarily due to its cost factor as many smaller companies cannot afford the million dollar contracts or the resources to manage the global aspect of the outsourcing project. Yet, global IT outsourcing shares aspects with onshore IT outsourcing, outsourcing from a firm local to their area, that these smaller firms can adapt to but on a smaller scale. There are certain risks and measures that can be taken to attempt to reduce the failure rate and have the project result in success. These same principles discussed for global IT outsourcing can be applied to their local onshore IT outsourcing project, and if applied correctly, can result in the same success that the larger firms experience. Background Both global IT outsourcing and onshore IT outsourcing have become very common in todays competitive market environments. IT outsourcing can be defined as an act of delegating or transferring some or all of the IT related decision making rights, business processes, internal activities, and services to external providers, whether they be offshore or onshore, who develop, manage, and administer these activities in accordance with agreed upon deliverables, performance standards and outputs, as set forth in the contractual agreement (Dhar & Balakrishan, 2006). IT outsourcing can be broken down in to four broad categories. The first is General IT Outsourcing which includes web servers, e-mail, and data storage. The next is Transitional Outsourcing which describes the activities that need to be performed to switch to a different IT platform. Business Benefit Contracting is the third category and describes when two firms work together and both parties benefit from the collaboration efforts. The last category is Offshore Outsourcing where the work is performed overseas and not domestically and usually involves software development (Fraihat, 2006). As more and more companies utilize this new business technique, the IT outsourcing industry has experienced tremendous growth over the past

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two decades. According to market research, spending on IT outsourcing reached $56 billion in 2000 and had expected to top $100 billion by 2005 (Ye, 2005). But it is important to note that only primarily large corporations engage in global IT outsourcing due to the prices involved with the contract and the availability of resources to manage the contracts. For example, companies like Accenture, IBM, HP, Infosys, Tata Consulting Services, and Wipro have begun to invest heavily in offshore contracts (Babin & Nicholson, 2010). The scope of such offshore development contracts for companies can be staggering. Approximately forty percent of IBMs business is in outsourcing and is ranked second most valuable brand according to Interbrand in 2009 with a brand value of $60 billion. HP, another large corporation, has an outsourcing percentage of thirty percent (Babin & Nicholson, 2010). It is interesting to note that these larger firms have begun to focus on a new aspect of their offshore outsourcing contracts, more in particular environmental factors and their impact such as greenhouse gases and the carbon footprint left behind by the firm. For example, in July 2009, Walmart assessed its 100,000 suppliers across the globe. Walmart is the largest private user of energy in the United States and wants to reduce that amount not only here in the United States, but in the countries where their suppliers are located as well. In addition, these large companies are also focusing on strategic sustainability which be best explained as choosing a unique position-doing things differently from competitors in a way that lowers costs or better serves a particular set of customer needs (Babin & Nicholson, 2010). In addition, there is a focus on e-waste. Several countries have recognized the growing problem of e-waste and have enacted legislation that requires a planned and environmentally appropriate method for disposing of obsolete electronic equipment. In the United States, 19 states have passed legislation mandating e-waste recycling programs (Babin & Nicholson, 2011).

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There have been countless studies and research on the success and failures of global IT outsourcing projects as well onshore projects. Global IT outsourcing contracts have about three prevailing themes. The first is the overall structure of the relationship, the second is the processes involved during the contract, and the last is the nature of risk of the relationship. These three once combined, give an overall view of how the contract interacts with each other. Global IT outsourcing projects also have four different dimensions, that once addressed and executed properly, could definitely aid in the success of a project: forming an appropriate global IT strategy, using proper global IT platforms, managing international data transfer, and surviving the cultural environment (Chen, Tu, & Lin, 2002). Forming an appropriate global IT strategy involves proper planning and research into the proposed provider and often the provider will have an on-site developer present to gain a better insight of management skills. When deciding a proper global IT platform, some common expectations of a successful one include manpower and skill advantages, technical and cost advantages, and government regulations and restriction (Chen, Tu, & Lin, 2002). When looking at the dimension of international data transfer, it can get complicated by local data transfer laws in the foreign sites as well as hardware and software prices being drastically different offshore (Chen, Tu, & Lin, 2002). Lastly, surviving the culture is a critical and hard to accomplish because many countries do not have the same language, customs, and even the pace of daily life (Chen, Tu, & Lin, 2002). So why do these large companies engage in large multi-billion contracts? In many large organizations, IT outsourcing is being considered as a viable cost reduction alternative. Cost reduction is the main driving factor for outsourcing their IT activities (Dhar & Balakrishnan, 2006) but it is followed closely now by goals such as improving company focus and achieving business transformations where these large firms form partnerships with other companies to

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rapidly and substantially improve performance at the organizational level (Ye, 2005). But there have been additional recent studies that have mounting evidence that large companies have turned to outsourcing for more strategic reasons, including keeping up with cutting-edge technology, creating value for the organization and its customers, and broadening infrastructure and operations reach (Ye, 2005). Success is based on achieving goals of three parties: the outsourcer (the hiring agent), the outsourcee (the service provider), and the end user of the resulting project (Misra, 2004). But above all, studies have shown that direct support from top management is the key to success of an IT outsourcing project for both firms activities (Dhar & Balakrishnan, 2006). In addition, a good outsourcee will have a good service consistency, technical competency, compatibility, and continuity (Misra, 2004). However, studies have shown, not all global IT outsourcing projects end in success. Many factors contribute to this, some of them being that the firm outsourced all of its IT functions (Chen, Tu, & Lin, 2002). It is a well-known fact that some activities cannot be outsourced primarily because they need to stay in house for control reasons and sustaining competitive advantage (Chen, Tu, & Lin, 2002). Also, due to poor planning, many global IT outsourcing projects experience negative factors like unexpected outcomes and diminishing service levels (Dhar & Balakrishnan, 2006). Some additional pitfalls to outsourcing success include weak management, high hidden costs, poor communications, and business uncertainty. To address these challenges, focuses on soft control mechanisms such as trust and commitment are reinforced to reduce these pitfalls (Huang & Goo, 2009). Some drawbacks to global IT outsourcing include security of information and data, quality of personnel and work cannot be guaranteed, the cost to maintain the contracts, the fact that cost savings will not be realized in the short-term, and more importantly, the public opinion of the United States towards companies

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who IT outsource (Kakumann & Portanova, 2006). In order to try to avoid a failed project, there are factors that should be analyzed that are considered risk assessment factors. These include aspects like geographical location, political climate, cultural implications, quality standards, legal contracts, and intellectual property (Dhar & Balakrishnan, 2006). Outsourcing service recipients often use a service-level agreement (SLA), an addendum to the main contract of financial and legal terms, to ensure the performance and execution of outsourcing services. When negotiating an outsourcing relationship, the SLA should be kept short and basic yet focusing on service elements and metrics (Huang & Goo, 2009). As mentioned above, small to medium sized businesses cannot engage in such large contracts. But there are onshore IT outsourcing providers that they can turn to. Much like large companies engage in offshore IT outsourcing for cost saving, small to medium sized business engage in onshore contracts for strategic goals (Misra, 2004). In todays fast-paced business environment, it is impossible for these smaller organizations to understand, develop, and implement every information technology needed. Therefore, these smaller firms actively seek external IT providers to obtain needed IT services at lower costs and to achieve other goals such as better IT performance, improved services, and innovation. This phenomenon is referred to as onshore IT outsourcing, which can be defined as the delegation, through a contractual agreement, of all or any part of the technical resources, the human resource, and the management responsibilities associated with providing IT services to an external vendor (Ye, 2005). In addition, the future of outsourcing deals is trending towards smaller agreements with specific business objectives and away from the full service, 10-year, multi-billion dollar deals that the big firms use. And because there are more smaller deals, this opens up the market creating new opportunities or more vendors. Smaller IT outsource service providers will have new

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opportunities to compete in specialized niches (Cohen, 2004). Prices may drop due to competition of these firms resulting in further advantages for the small to medium sized business. Since many new small businesses are start-up business, onshore IT outsourcing is a common option in order to reduce start-up time to new markets, and for organizations entering new business lines. Many small to medium sized business use onshore IT outsourcing for data center operation, desktop help support, help desk services, networking management, software development and support, disaster recovery, web hosting, and application management (Fraihat, 2006). Other companies outsource for services such as accounting, human resources, research and development, customer relationship management, tax preparation, film and cartoon production, and radiology analysis (Palvia, 2007). This popularity of outsourcing is increasing rapidly among this business sector, SMBs, especially as large parts of IT are grown to be looked at as commodity-like (Fraihat, 2006). Managements view from these small companies is very

similar to that of a large company and would typically like to have some the mentioned IT services out of their scope of worry (Pistole & Bragg, 2005). In addition, the lifting of the inhouse IT burden also lets a company invest human capital to maximize productivity and foster innovation. Small firms that have outsourced, have reported that they have had, on average, a 61% boost in revenue compared to firms that have not outsourced (Pistole & Bragg, 2005). When looking at global IT outsourcing and onshore IT outsourcing, they share some common characteristics to outsourcing in general. For example, the following is a list of Critical Success Factors for outsourcing activities: the dependence of company on vendor, the risk of information leakage to outsiders, trustful relationship, low-cost high-quality proficiency services, focus on strategic core competencies, and flexibility of business and commitment (Fraihat, 2006). All of these success factors are applicable to either type of outsourcing as well

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as the risk assessment factors of geographical location, political climate, cultural implications, quality standards, legal contracts, and intellectual property. There is also common to both types of outsourcing the role of the Project Manager handling the outsource project. These roles range from Leader where the PM supervises, trains, and organizes the people under him. There is the Resource Allocator role which allocates human resource, financial resources, and information. The PM is also the Spokesman because of his contact with the various people in the organization when discussing the project. The PM also plays an Entrepreneur role because needs to predict users needs and managements expectations. He is a Liason because he is the middleman between his organization and the external firm and is a Monitor due to him scanning the external environment for changes (Karlsen & Gottschalk, 2006). All of these roles are pertinent to whether a project is a software development project with a company located in India, or a project with a firm located 15 miles from the organization. In either case as well, the idea of social capital plays a key role with both global IT outsourcing and onshore IT outsourcing. These IT outsourcing partnerships constitute a form of social capital for the firm that chooses to outsource, that facilitates knowledge exchange and transfer. The increased knowledge stock as a result of knowledge exchange and transfer, in turn, forms the foundation for IT value, which is manifested as success in business operations and IT-enabled innovation. Specifically, the structural dimension (partner resource endowment) and the cognitive dimension of social capital (shared vision and shared cognition) have a strong impact on knowledge acquisition; whereas the relational dimensions of social capital (social interaction and trust) has strong direct effects on successful outcomes of IT outsourcing (Ye, 2005).

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Methodology The research methodology for this particular topic of global IT outsourcing and its impact on Small-to-Medium Sized Businesses (SMBs) both here and markets abroad was designed to occur in three separate distinct stages. Each stage has its own significance before the other and must be completed in succession in order to ensure that the information used is accurate and valid. The first stage Topic Review and Analysis involved an in-depth Literature review of several different types of articles from numerous journals, newspapers, trade magazines, and other periodicals in circulation within certain industries involved with global and onshore IT outsourcing activities or intentions to participate in such activities. This would be the initial qualitative analysis of the topic as the goal of stage one is, become familiar with the many facets of global and onshore IT outsourcing whether it be for partial service of a full service package for all IT activities in that organization, this option is usually common for larger organizations (Babin & Nicholson, 2010), but there are also onshore IT outsourcing companies that offer costefficient services to small-to-medium sized business. Once a clear picture of the current global and onshore IT markets and all of their characteristics including risks, barriers, opportunities, and the various types of services and products as well as the numerous costs, both monetary and critical time associated costs such as manpower, downtime, monitoring, and support, were understood; the second stage Survey and Interviews was able to begin. In this stage, with a clear picture of the key issues at hand, a survey or a phone interview was conducted with a very small sample of small to medium sized businesses within the surrounding communities of the university campus of Cal Poly Pomona as well as some select contacts at companies located throughout the greater U.S., whom I had maintained communication with during my work as Project Manager at an IT firm located in Walnut, CA. This small sample may be seen as non-

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effective, but due to time restrictions and participant participation, it should suffice as the hypothesis should show the evident patterns and actualities between them. During this stage Data Collection was performed by analysis of the survey sheets distributed to this small sample of various businesses and organizations through Google Docs or via phone interviews performed for contacts who needed the process to be expeditious and those that were able to allocate a few minutes to completing the form or provide the data by some other medium. The data received covered topics such as the company or organizations current IT infrastructure in place physically at their location whether it included website servers, e-mail servers, file servers, or networking equipment installed and fully operational at the location. There were also particular questions positioned strategically on the survey in an attempt to inquire on their overall stand on environmental issues as this is of significant importance in regards to the sustainability of an outsourcing relationship (Babin & Nicholson 2010). These are of great importance as these were designed to attain the interviewees attitude towards certain aspects of global and onshore IT outsourcing such as cultural preference and environmental impacts which would be the only part of the second stage where qualitative information would be attained as it was in the first stage. This data is then organized into a tabular form in order to perform analysis to arrange the information in a manner that would allow a clear picture of small to medium sized business wants and needs. Thusly, Stage Three is the overall analysis of the survey info to conclude with findings that will show the correlation between global and onshore IT outsourcing and small to medium sized business. These three stages when completed in succession will help to answer the following research questions about global and onshore IT outsourcing and its impact on small to medium sized businesses: Research Questions:

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1. How many local Small to Medium Sized Businesses (SMBs) outsource their IT needs, whether the need be for partial outsourcing (i.e. website hosting, network administration, etc) or a full service IT outsource for all IT activities pertaining to the organization, to offshore firms or onshore firms, and if so, are they primarily for cost reasons? 2. When local Small to Medium Sized businesses (SMBs) outsource their IT needs to an onshore outsource company, can they utilize principles and factors that the larger organizations use for their large multi-million dollar contracts to ensure success? The above research questions will aid in the research paper in testing the following hypothesis about IT outsourcing in both the global and domestic arena encompassing aspects that are foundational to business activity, may have environmental impacts, and cultural implications which may either improve or damage the outsourcing relationship: H1. Small to Medium Sized Businesses utilize local outsource firms for their various IT needs instead of offshore providers because of their lower cost and manageability. H2. Global IT outsourcing is unattractive to Small to Medium Sized Businesses because of cultural and political factors which are integrated into the decision making process when dealing with an offshore contract. H3. Both global and onshore IT outsourcing share factors that are common to each other that the small to medium sized business can use to ensure success like the larger companies do. Stage One: Topic Review and Analysis During stage one, the goal was to not just look at global and onshore IT outsourcing as a service where you meet a provider, sign a contract, and receive your goods. But rather, the goal was to get an in depth look at how the global and onshore IT outsource process worked, both on the micro and macro level. Academic journals were the first to be researched through the use of a highly organized database where only relevant articles by accredited authors were taken into consideration. These journal sources enabled an accurate account of what the global and onshore

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IT arena was truly made of to be revealed and understood in a clear and concise manner. It was through this initial research that a realization was made that global IT outsourcing has significant impact on political and cultural forces acting on the partnership of organizations, and it is through managing these forces that progress and innovation can be maintained and fostered. During this stage of research, there was great effort into looking for sources that showed any pattern of behaviors or attitudes demonstrated by American companies when inquired upon about global or onshore IT outsourcing and their views towards the issues at hand now that a clearer picture was being formed. Lastly, there were a variety of case studies that were looked over to provide a sort of benchmark for the success and failures of the global IT outsourcing projects in order to compare and contrast these results and data from the results and data collected from the Small to Medium Sized Businesses. Stage Two: Surveys and Phone Interviews After an accurate view of the global and onshore IT outsourcing market including the various cultural, environmental, and political factors that accompany it, surveys were made to sample a small selection of companies locally, a few within the central U.S., and a few on the east coast. The questions from the survey were designed to firstly attain quantitative data from the respondents, but also to attempt to develop an overall attitude conveyed by the respondent or interviewee. The questions to the survey were the following: 1. 2. 3. 4. 5. 6. Do you have on-site servers for: File/Sharing ___ E-Mail ___ Website ___ Do you use any types of software to collaborate with co-workers? Yes ___ No ____ Is this software proprietary? In other words, is only available to you? Yes ___ No ____ If so, was it developed offshore? Yes ___ No ____ Have you ever considered using Offshore IT Outsourcing? Yes ___ No ___ If you have considered using Offshore IT Outsourcing, what company was it and where were they based? Text ___________________

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7. Have you ever used domestic vendors to outsource any of your IT needs? Yes ___ No ___ 8. Do environmental concerns come into play when considering partnerships for various IT needs Yes ___ No ___ Only if Currently Using Outsourcing Services (whether Domestic or Offshore) 9. Is the majority of your outsourcing activity domestic or offshore? U.S. Based____ Overseas____ 10. Was the output (product or service): Satisfactory ___ Excellent ___ 11. Were there any significant failures or downtime: Yes ___ No ___ 12. Was the decision to outsource a cost-savings decision or lack of resources: Cost-Savings ____ Lack of Resources ____ 13. If you are utilizing offshore resources, which country and /or area is it: India ____ China _____ European Country ____ Other(please provide): ________________

As you can see these questions were designed to cover the major aspects of global IT outsourcing versus the onshore local outsource provider including significant factors like cost savings and specialization needs as well as environmental and cultural implications in regards to why or why not a particular offshore provider is selected. Stage Three: Data Analysis and Cross-Referencing During the final stage of research for global IT outsourcing and the impact on Small to Medium Sized Businesses, there is an attempt to cross reference the factors that help a global IT outsourcing contract to that of onshore providers. The goal of this portion of the research is to conclude that SMBs around the globe, can utilize the same measures used in global IT outsourcing to manage their onshore IT outsourcing project to ensure success and reduce as many risks as possible. Multiple Research Methods There were numerous methods of research utilized when delving deeper into the topic of global IT outsourcing and its impact on small to medium sized businesses. This was done

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primarily due to the fact that each method may have its flaws or drawbacks, but by using a variety of methods, there exists the ability to strengthen the validity of the data collected (Petter & Gallivan, 2004) . Since the hypothesis cover a variety of aspects to global IT outsourcing and onshore IT outsourcing, multiple methods were needed to tie together patterns and consistencies found in other global markets, whether they by small to medium in size or a large conglomerate of an organization. Findings/Discussion After analysis of the survey data (see Appendix), the following charts were made:

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The numbers show that the majority of small to medium sized firms that took the survey do not use offshore IT outsourcing services with the exception of the firm using Wipros services in India. However, there were a few of these small to medium sized business that had considered utilizing offshore IT outsourcing services. One firm in particular considered an offshore company to manage their files and maintain their storage of data, but decided not to in the end, and went with an onshore provider. Yet, the majority of these small to medium sized business do utilize onshore IT outsourcing services. Eighty-two percent of the companies surveyed utilize a software platform to collaborate with each other in the workplace and twelve percent of those were proprietary; yet none of them were developed offshore. The charts indicate that although they may have servers on-site at their organization, seventy-two percent of the companies that used onshore IT outsourcing services indicated that the decision was based on lack of resources,

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not necessarily due to a minimization of costs decision. When comparing these findings with the literature review, it is evident that all companies surveyed needed to utilize an IT outsourcing agreement to service or perhaps setup IT infrastructure at their organizations workplace. As mentioned earlier, smaller companies tend to want the commodity like products of their organizational structure, websites and networking installations, to be taken care of externally so they can focus more on their core competencies, and not have to hire skilled IT professionals to manage and maintain their smaller infrastructure much like a large corporation such as IBM has to. The data shows that of the eighty-eight percent of those companies that used onshore IT outsourcing, just about fifty eight of them take into consideration environmental factors, which are primarily of a global concern, yet this environmental awareness trickled down into the decision making process for an onshore contract demonstrating that possibly global IT outsourcing principles and measures can be directly correlated to onshore IT outsourcing practices. In addition, there is also evidence from the same eighty-eight percent of those that used onshore IT outsourcing, experienced a negative result from such a contract. In particular, only twenty-seven percent reported that they experienced excellent results while the rest reported only satisfactory results. Interestingly enough, fifty-four percent of those who used onshore IT outsourcing services reported that they had significant failures and downtime, overwhelming evidence that these contracts were not managed correctly and suffered from the same drawbacks and risk factors that large global IT outsourcing contracts suffer from. Thusly, it is safe to say that smaller firms can utilize the measures and critical success factors that larger firms use such as HP, to ensure that these outsourcing contracts are managed and executed successfully. As mentioned earlier, there has to be a strong emphasis on project management of

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these smaller contracts and the top executives, even from a smaller firm, have to be involved to ensure its success. Conclusion When small to medium sized businesses engage in onshore IT outsourcing contracts, they do so for reasons of lack of resources, not cost savings like the large companies use global IT outsourcing contracts for. Due to the small to medium sized business organizations size, lack of resources is common as managers would rather outsource the activity than invest money into an internal IT department, when they can invest it in other core competencies. These small to medium sized business also share the same drawbacks and pitfalls that the larger companies experience, just not on a global scale. These small to medium sized organizations need to manage their small outsourcing contracts in the same manner that a CIO from a large firm would, with great diligence and strong project management skills and making sure to utilize Service Level Agreements to ensure success and be reimbursed for downtimes or failures. The global IT outsourcing contract and the onshore IT outsourcing contract are one in the same, with the only difference being the context of the contract. It is safe to say that an offshore contract can have a macro effect for a large company due to its global nature, while an onshore contract has a micro effect on the smaller company and its immediate environment. Because of this, the smaller company can model its outsourcing practices after the larger firm and ensure success. The global arena in business is becoming more like a canvas while the small to medium sized businesses are the portions of the paintings on that canvas. All together, they make the painting of business productivity, but it is important that each portion of the picture be in proportion to others and fit within the canvas. The artist of this painting is a combination of the efforts of the CIOs of large firms and the owners of these small to medium sized businesses. When working

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together in unison sharing the same practices and thusly successes, only then can the picture become famous and widely accepted as the masterpiece.

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References n.a (2012). Advocacy Small Business Statistics and Research. Small Business Administration. Retrieved from: http://web.sba.gov/faqs/faqindex.cfm?areaID=24

Babin R. & Nicholson, B. (2010). Sustainability Practices in Global IT Outsourcing. Manchester Business School Working Paper. No. 602. Retrieved from: http://www.mbs.ac.uk/research/working-papers.aspx Babin R. & Nicholson B. (2011). How green is my outsourcer? Measuring sustainability in global IT outsourcing. Strategic Outsourcing: An International Journal. DOI 10.1108/17538291111108426. Chen, Q., Tu, Q., & Lin B. (2002). Global IT/IS Outsourcing: Expectations, Considerations, and Implications. Advances in Competitiveness Research. Vol. 10. Cohen, L. (Feb 2004). Gartner Says Smaller IT Outsourcing Providers to Have Greater Opportunities in 2004. Business Wire. New York: Business Wire. Dhar, S. & Balakrishnan B. (2006). Risks, Benefits, and Challenges in Global IT Outsourcing: Perspectives and Practices. Journal of Global Information Management. Vol. 14. Issue 3. Hershey, PA: Idea Group Publishing. Fraihat, H. (2006). Theoretical and Pragmatic Framework For Outsourcing Of IT Services. Journal of International Technology and Information Management. Vol. 15. No. 1. Huang C. & Goo J. (Feb 2009). Rescuing IT Outsourcing: Strategic Use of Service-Level Agreements. IT Pro. IEEE Computer Society. Kakuman P. & Portanova, A. (Sep 2006). Outsourcing: Its Benefits, Drawbacks and Other Related Issues. Journal of American Academy of Business, Cambridge. Vol. 9. No. 2. Karlsen J. & Gottschalk, P. (Mar 2006). Project Manager Roles in IT Outsourcing. Engineering Management Journal. Vol. 18. No. 1. Misra, R. (2004). Global IT Outsourcing: Metrics for Success of All Parties. Journal of Information Technology Case and Application. Vol. 6. No. 3. Palvia, S. (2007). Global Market for Outsourcing IT and IT Enabled Services. Journal of Global Information Technology Management. Vol. 10. No. 2. Petter, S. and Gallivan, M (2004), Toward a framework for classifying and guiding mixed method research in information systems, Proceedings of the 37th Hawaii International Conference on Systems Sciences, Big Island, HI.

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Pistole L. & Bragg A.W. (Aug 2005). Making IT Outsourcing Work for Smaller Enterprises. IT Pro. IEEE Computer Society. Sahay, S., Nicholson B., & Krishna, S. (2003). Global IT Outsourcing: Software Development Across Borders. Information Technology & People. Cambridge: Cambridge Press. Ye, F. (2005). Strategic Partnerships in Transformational Outsourcing as a Distinctive Source of IT Value: A Social Capital Perspective. Dissertation submitted to the Faculty of the Graduate School of the University of Maryland. UMI Number: 3183551.

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Is the majority of your outsourcing activity domestic or offshore? U.S. Based (domestic) U.S. Based (domestic) U.S. Based (domestic) U.S. Based (domestic) U.S. Based (domestic) U.S. Based (domestic) We are currently Yes No Yes No

If you have considered using Offshore IT Outsourcing, what company was it and where were they based? Were there any significant failures or downtime? Yes No

Was the decision to outsource a costsavings decision or lack of resources? Lack of Resources Lack of Resources Lack of Resources Cost Savings Cost Savings Lack of Resources

If you are currently utilizing offshore services, which country are they based in? Not Applicable Not Applicable Not Applicable Not Applicable Not Applicable

Was the output (product or service): Satisfactory Excellent Satisfactory Satisfactory Satisfactory Excellent

Appendix
Satisfactory Satisfactory

U.S. Based (domestic) U.S. Based (domestic) U.S. Based (domestic) U.S. Based (domestic) U.S. Based (domestic)

Do environmental Have you ever concerns come Have you ever considered using used domestic into play when Is this software Please check considering vendors to If the software is Offshore IT Do you use any types proprietary? In each type of of software platforms other words, is it proprietary, was it Outsourcing for outsource any partnerships server you for various IT of your IT any of your IT physically have to collaborate with co- available only to developed needs? needs? needs? offshore? you? workers? on-site No Yes No No Not Applicable No No On-Site Servers Yes Yes No No No Yes File/Sharing/Print, E-Mail, Website Yes Yes No Not Applicable No Yes File/Sharing/Print, E-Mail, Website Yes Yes No Not Applicable No Yes File/Sharing/Print, E-Mail, Website Yes Yes Yes No Yes Yes File/Sharing/Print, Website No Yes No Not Applicable No N File/Sharing/Print o No Yes Yes Not Applicable No Yes File/Sharing/Print, E-Mail No No No Not Applicable No No File/Sharing/Print, E-Mail Yes Yes No No No Yes File/Sharing/Print, E-Mail, Website Yes No No No No Yes No On-Site Servers Yes Yes No No Yes Yes No On-Site Servers No Yes Yes Not Applicable No Yes File/Sharing/Print, E-Mail, Website No Yes No No No Y File/Sharing/Print es No Yes No Not Applicable No Yes No On-Site Servers Yes Yes No Not Applicable No Yes File/Sharing/Print, E-Mail, Website Yes Yes No Not Applicable No Yes No On-Site Servers No Yes No Not Applicable No Yes File/Sharing/Print, E-Mail, Website

Not Applicable Cost Savings Yes Not Applicable did of Resources Yes It was more of conceptual thought. WeLack not choose a company. Wipro in India Not Applicable Lack of Resources No Not Applicable Lack of Resources No Not Applicable Lack of Resources Yes

Satisfactory Excellent Satisfactory

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