IT OFFSHORING: History, Prospects and Challenges

Offshore provision of IS/IT related services has been growing rapidly in recent years and seems firmly set to continue. This trend is fueled by the many advantages of offshore service procurement; however, there are dangers in this practice. Furthermore, offshoring requires adaptation of the IS function and IS management. This, in turn suggests the need for modifications of IS curricula in order to prepare graduates for the new environment. The advantages of offshoring are those of outsourcing in general – cost saving and allowing the organization to focus on its core activities. The main dangers include loss of possibly-important business skills and reliance on remote suppliers who face risks that are unfamiliar to the client firm. The loss of jobs due to offshoring also introduces political considerations. Offshore IS activities are generally the responsibility of an organization’s CIO. This management responsibility requires awareness of cultural and legal differences and of risks associated with offshoring and outsourcing in general. Offshoring has an effect on job opportunities for graduates of 1 Detmar Straub was the accepting senior editor. This paper was submitted on April 14 2005 and went through 3 revisions. Journal of the Association for Information Systems Vol. 7 No. 11, pp. 770-795/November 2006 770 IT Offshoring: History, Prospects and Challenges/Davis et al. information systems programs. The number of some jobs will shrink, but new positions with new responsibilities are likely to emerge. Training of students in the U.S. and other countries in the developed world to function in an environment of offshored operations will introduce new IS roles and skills and require the adaptations of IS curricula.