Service offshoring and white-collar employment

This paper empirically studies the effects of service offshoring on white-collar employment, using data for more than one hundred U.S. occupations. A model of firm behavior based on separability allows to derive the labor demand elasticity with respect to service offshoring for each occupation. Estimation is performed with Quasi-Maximum Likelihood, to account for high degrees of censoring in the employment variable. The estimated elasticities are then related to proxies for the skill level and the degree of tradability of the occupations. Results show that service offshoring increases high skilled employment and decreases medium and low skilled employment. Within each skill group, however, service offshoring penalizes tradable occupations and benefits non-tradable occupations.

Employment effects of service offshoring: evidence from matched firms

This paper studies the effects of service offshoring on the level and skill composition of domestic employment, using a rich data set of Italian firms and propensity score matching techniques. The results show that service offshoring has no effect on the level of employment but changes its composition in favor of high skilled workers.

Service offshoring and the skill composition of labor demand

This paper studies the effects of service offshoring on the skill composition of labor demand, using novel comparable data for nine Western European countries between 1990 and 2004. The empirical analysis delivers three main results. First, service offshoring is skill-biased, because it increases the demand for high and medium skilled labor and decreases the demand for low skilled labor. Second, the effects of service offshoring are similar to those of material offshoring, both qualitatively and quantitatively. Third, the economic magnitude of these effects is not large.

Offshoring and directed technical change

To study the short-run and long-run implications on wage inequality, we introducedirected technical change into a Ricardian model of offshoring. A unique final good isproduced by combining a skilled and an unskilled product, each produced from a continuumof intermediates (tasks). Some of these tasks can be transferred from a skill-abundant Westto a skill-scarce East. Profit maximization determines both the extent of offshoring andtechnological progress. Offshoring induces skill-biased technical change because it increasesthe relative price of skill-intensive products and induces technical change favoring unskilledworkers because it expands the market size for technologies complementing unskilled labor.In the empirically more relevant case, starting from low levels, an increase in offshoringopportunities triggers a transition with falling real wages for unskilled workers in the West,skill-biased technical change and rising skill premia worldwide. However, when the extentof offshoring becomes sufficiently large, further increases in offshoring induce technicalchange now biased in favor of unskilled labor because offshoring closes the gap betweenunskilled wages in the West and the East, thus limiting the power of the price effectfueling skill-biased technical change. The unequalizing impact of offshoring is thus greatestat the beginning. Transitional dynamics reveal that offshoring and technical change aresubstitutes in the short run but complements in the long run. Finally, though offshoringimproves the welfare of workers in the East, it may benefit or harm unskilled workers inthe West depending on elasticities and the equilibrium growth rate.

Connecting India: The rise of standards in service offshoring

This paper explores the role of international standards in the globalisation of the service economy. Various strands of economic analyses consider that core attributes of services affect their ability to be reliably delocalised, industrialised and standardised. In contrast, international political economy (IPE) approaches draw attention to power configurations supporting conflicting use of standards across industries and nations. The paper examines the case of the Indian service industry in business process outsourcing to probe these opposing views. Our findings suggest that standards matter in types of services conventionally identified as unlikely to be standardised, and that their use raise little conflict. An IPE perspective on service standardisation highlights, however, the importance of potential power issues likely to be included in more progressive forms of standardisation

Standards and service offshoring in India: Moving beyond industry and institutional specificities

Résumé Cet article examine le rôle joué par les normes internationales techniques dans la mondialisation des activités de service. Différentes approches d'économie considèrent que les spécificités des activités de services sont un frein à leur délocalisation, à leur industrialisation et à leur normalisation. A l'opposé de ces approches centrées sur les spécificités des activités de services, les approches d'économie politique internationale mettent en avant l'existence de configurations conflictuelles de pouvoir à l'oeuvre dans l'internationalisation des activités de services et ce, au-delà des limites sectorielles et nationales. Cet article examine le cas du secteur des centres d'appels et, plus généralement, celui de la sous-traitance des services aux entreprises (BPO) en Inde. Nos résultats suggèrent que les normes techniques sont importantes dans le secteur étudié, alors même que ces types de services sont conventionnellement identifiés comme étant peu susceptibles d'être soumis à des normes. Une perspective d'économie politique sur la normalisation des activités de service souligne comment la problématique du pouvoir investit la normalisation technique d'une dimension plus progressive à travers les thématiques du "travailleur", du "consommateur", ou de "l'environnement". Abstract This paper explores the role of international standards in the much-debated globalisation of the service economy. Various strands of economic analyses consider that core attributes of services affect their ability to be reliably delocalised, industrialised, and standardised. In contrast, international political economy approaches draw attention to power configurations supporting conflicting use of standards across industries and nations. The paper examines the case of the rising Indian service industry in customer centres and business process outsourcing to probe these opposing views. Our findings suggest that standards matter in types of services that conventional economic analyses identify as unlikely to be standardised, and that the standards used in the Indian BPO industry are widely accepted. Despite little conflict in actual definitions of market requirements, an international political economy perspective on service standardisation highlights the importance of potential power issues related to workers', consumers', and environmental concerns likely to be included in more progressive forms of standardisation.

Challenges in scaling agile software development in offshoring environment

Corporate decision to scale Agile Software development methodologies in offshoring environment has been obstructed due to possible challenges in scaling agile as agile methodologies are regarded to be suitable for small project and co-located team only. Although model such as Agile Scaling Model (ASM) has been developed for scaling Agile with different factors, inabilities of companies to figure out challenges and addressing them lead to failure of project rather than gaining the benefits of using agile methodologies. This failure can be avoided, when scaling agile in IT offshoring environment, by determining key challenges associated in scaling agile in IT offshoring environment and then preparing strategies for addressing those key challenges. These key challenges in scaling agile with IT offshoring environment can be determined by studying issues related with Offshoring and Agile individually and also considering the positive impact of agile methodology in offshoring environment. Then, possible strategies to tackle these key challenges are developed according to the nature of individual challenges and utilizing the benefits of different agile methodologies to address individual situation. Thus, in this thesis, we proposed strategy of using hybrid agile method, which is increasing trend due to adaptive nature of Agile. Determination of the key challenges and possible strategies for tackling those challenges are supported with the survey conducted in the researched organization.

“Why share in uncertain conditions?” Factors of individual level knowledge sharing in offshoring cases

The objective of this Master’s Thesis was to research factors influencing and enhancing individual level knowledge sharing in offshore projects which often involve uncertainty of the knowledge provider’s own future. The purpose was to understand why individuals are willing to share their knowledge under these kinds of circumstances. In addition the goal was to identify obstacles to interpersonal knowledge sharing in order to understand how to mitigate their influence. The research was conducted as a qualitative multiple case study in a global IT company, and the data was gathered using semi-structured personal theme interviews within two different offshore projects. In order to a gain a wider perspective on the matter, some management representatives were interviewed as well. Data was analysed with the inductive content analysis method. Results of the study indicate that individuals are willing to share their knowledge despite of uncertainty if they are motivated, if they are provided with opportunities to do so, and if they have skills, competence and experience to share their knowledge. A strong knowledge sharing culture in the organization or team also works as a strong incentive for individual level knowledge sharing. The findings suggest that even under uncertain conditions it is possible to encourage people to share their knowledge if uncertainty can be decreased to a bearable level, a robust and personal connection and relationship between the knowledge provider and acquirer can be created and suitable opportunities for knowledge sharing are provided. In addition, based on the results the support and commitment of management and HR in addition to favourable environmental circumstances play an essential role in building a bridge between the knowledge provider and acquirer in order to create a virtual environment and space for knowledge sharing: Ba.

Ulkoistettujen IT-palveluiden laatu eri offshoring asteissa

Suomen IT-palvelu markkinoiden voidaan kuvata olevan murroksessa. Asiakkaat ovat yhä kiinnostuneempia ulkomailla tuotetuista palveluista, mutta tietyt tekijät pitävät heidät varuillaan. Tietoa ei ole tarpeeksi sataavilla siitä, miten eri offshoring asteet vaikuttavat palvelun laatuun. Vaikka palvelun laatua ja ulkomailla tuotettuja palveluita on tutkittu paljon, usea tutkimuskysymys on edelleen vastaamatta, terminologia on epämääräistä ja tutkimustulokset ovat epäjohdonmukaisia. Tämä tutkimus keskittyy näiden kahden kentän leikkauspisteeseen. Tutkimuksen tarkoitus on oppia lisää palvelun laadusta eri offshoring asteissa ja samalla kaventaa tutkimusaukkoa. Offshoring asteet voidaan jakaa kolmeen toimitusmalliin: onshore, yhteistyö ja offshore. Tutkimus koostuu kvantitatiivisesta sekä kvalitatiivisesta vaiheesta. Ensin kerättiin numeerista aineistoa tapahtumienhallintajärjestelmästä (incident management system). Ratkaisuaikaa eri tomitusmalleissa analysoitiin Kruskal-Wallis ja Jonckheere-Terpstra testien avulla. Lisäksi palvelutasosopimuksen (SLA) noudattamista eri toimitusmalleissa tutkittiin ristiintaulukoinnilla. Kvantitatiivisen analyysin tulokset viittaavat siihen, että offshore palvelut suoriutuvat muita toimitusmalleja paremmin, kun palvelun laatua tarkastellaan nopeuden ja SLA:n näkökulmasta. Analysoitua dataa varjostavat kuitenkin useat ongelmat, jonka takia tutkimustuloksiin täytyy suhtautua varoen. Kvantitatiivisen analyysin jälkeen tutkimus siirtyi kvalitatiivisen datan keräämiseen ja analysoimiseen. Haasteteltavia oli neljä ja he tulivat erilaisista organisatorisista rooleista ja heillä oli kokemuksia erilaisista toimitusmalleista. Haastattelut kattoivat seuraavat teemat: laatu käsitteenä, laadun subjektiivisuus tai objektiivisuus, offshore toimituksiin kohdistuvat odotukset ja ennakkoluulot, Intiasta toimitettu laatu, offshore resurssien proaktiivisuus, laatuindikaattorit sekä yhteistyössä toimitettujen palveluiden vähäisyys. Useita johtopäätöksiä voidaan vetää empiirisen tutkimuksen perusteella. Ensinnäkin palvelun laatu eri toimitusmalleissa nähtiin kiistanalaisena aiheena. Toisekseen tapa jolla resurssit ja työtehtävät jaettiin yhteistyössä toimitetussa palvelussa, näytti aiheuttavan joitain ongelmia. Toisaalta kokemattomat offshore resurssit osoitettiin näihin palveluihin ja toisaalta heille annetaan vain rutiinitehtäviä. Tämä luo itseään voimistavan kierteen, joka johtaa alhaiseen motivaatioon ja omistajuuteen sekä korkeaan vaihtuvuuteen offshore resurssien keskuudessa. Tämä piirre ei kuitenkaan ole ominainen juuri yhteistyössä toimitetuille palveluille vaan perimmäinen syy piilee tavassa jakaa resurssit ja tehtävät. Lisäksi tutkimuksessa tunnistettiin, että ennakkoluulot vaikuttavat koettuun palvelun laatuun ennakoimattomalla tavalla. Tutkimus myös vahvisti, että kohdeyrityksessä on tarvetta lisäinformation keräämiselle, jotta lisäanalyysejä voidaan tehdä.

Quality of outsourced IT services in different degrees of offshoring

The Finnish IT service market can be described to be at a turning point. The clients are ever more interested on services delivered from offshore but certain issues keep them cautious. There is a lack of knowledge on what implications different degrees of offshoring have on service quality. Although there has been significant amount of research related to both service quality and offshoring, several questions are unanswered, terminology remains ambivalent and research findings are inconsistent. The study focuses on the interception of these two fields. The purpose of the study is to learn more about service quality in different degrees of offshoring. At the same time it aims to contribute in narrowing the research gaps. The degree of offshoring can be divided to three delivery modes: onshore, collaboration and offshore. The study takes a mixed method approach where the quantitative and qualitative phases are executed sequentially. First data was gathered from incident management system. Resolution time in different degrees of offshoring was analyzed with Kruskal-Wallis and Jonckheere-Terpstra tests. In addition, the compliance to Service Level Agreement (SLA) in different degrees of offshoring was examined with cross tabulation. The findings from the quantitative analysis suggested that the services with offshore delivery mode perform the best in terms of promptness and SLA compliance. However, several issues were found related to the data and for that reason, the findings should be considered with prudence. After the quantitative analysis, the study moved on to qualitative data collection and analysis. Four semi-structured interviews were held. The interviewees represented different organizational roles and had experiences from different delivery modes. Several themes were covered in the interviews, including: the concept of quality, the subjectivity or objectivity of service quality, expectations and prejudices towards offshore deliveries, quality produced in India, proactiveness of offshore resources, quality indicators and the scarcity of collaborative deliveries. Several conclusions can be made from the empirical research. Firstly, the quality in different delivery modes was found to be controversial topic. Secondly, in the collaborative delivery covered in the study, the way tasks and resources are allocated seem to cause issues. On the other hand inexperienced offshore resources are assigned to the delivery and on the other hand only routine tasks are assigned to the resources. This creates a self-enforcing loop that results in low motivation, low ownership and high employee turnover in offshore. Nevertheless, this issue is not characteristic only to collaborative deliveries but rather allocation of tasks and resources. Moreover, prejudices were identified to affect the perceived service quality in non-predictable way. The research also demonstrated that there is a need in focal company for further data gathering and analysis.

Offshoring and outsourcing under demand uncertainty -a supply chain management analysis

Outsourcing and offshoring or any combinations of these have not just become a popular phenomenon, but are viewed as one of the most important management strategies due to the new possibilities from globalization. They have been seen as a possibility to save costs and improve customer service. Executing offshoring and offshore outsourcing successfully can be more complex than initially expected. Potential cost savings resulting from of offshoring and offshore outsourcing are often based on lower manufacturing costs. However, these benefits might be conflicted by a more complex supply chain with service level challenges that can respectively increase costs. Therefore analyzing the total cost effects of offshoring and outsourcing is necessary. The aim of this Master´s Thesis was to to construct a total cost model using academic literature to calculate the total costs and analyze the reasonability of offshoring and offshore outsourcing production of a case company compared to insourcing production. The research data was mainly quantitative and collected mainly from the case company past sales and production records. In addition management level interviews from the case company were conducted. The information from these interviews was used for the qualification of the necessary quantitative data and adding supportive information that could not be gathered from the quantitative data. Both data collection and analysis were guided by a theoretical frame of reference that was based on academic literature concerning offshoring and outsourcing, statistical calculation of demand and total costs. The results confirm the theories that offshoring and offshore outsourcing would reduce total costs as both offshoring and offshore outsourcing options result in lower total annual costs than insourcing mainly due to lower manufacturing costs. However, increased demand uncertainty would make the alternative of offshore outsourcing more risky and difficult to manage. Therefore when assessing the overall impact of the alternatives, offshoring is the most preferable option. As the main cost savings in offshore outsourcing came from lower manufacturing costs, more specifically labour costs, the logistics costs in this case company did not have an essential effect in total costs. The management should therefore pay attention initially to manufacturing costs and then logistics costs when choosing the best production sourcing option for the company.

Estudio del sector BPO en Colombia servicios BPO outsourcing & offshoring

Durante la última década hemos presenciado una revolución tecnológica que nos ha llevado a interconectarnos globalmente, desde las redes sociales como mecanismo de unión entre las personas hasta los servicios mercerizados prestados a través de la web que cada día van logrando un tejido empresarial mas informado y en contacto, en donde la información es en tiempo real y de gran ayuda para la toma de decisiones diarias. En el siguiente texto podremos observar de forma más detenida y detallada la forma en que se están generando unidades de negocio estratégicas que surgen a medida que la conectividad comienza a ser prioridad en muchas organizaciones, en donde buscan generar ventajas competitivas por medio de la tercerización de procesos, lo que ha llevado que Colombia quiera ser pionera en dicha materia. Pero para lograr consolidar un aparato productivo que incursione en el mundo digital y preparar la fuerza laboral para que pueda prestar dichos servicios tercer izados el gobierno ha ubicado los puntos críticos en donde se deben focalizar los recursos y los esfuerzos, de esta forma este texto busca aclarar y generar nuevas ideas en torno a la tercerización de los servicios, pasando por los modelos de negocios en la tercerización, los medios y la realidad actual de Colombia en este mercado.