Culturally Influenced Risks in Offshore Outsourcing of Software Projects

Abstract

The emergence of offshore outsourcing of software projects in modern software industry is phenomenal. Yet, it is undeniable that although offshore outsourcing offers attractive benefits, it is also associated with inevitable risks. Culture is usually identified as a critical risk factor in offshore outsourcing and cross-cultural project development contexts. However, there have been very few efforts in thoroughly studying the relationships between this factor and risks. This research attempts to close this gap by first identifying from offshore outsourcing literature the most frequently cited risks and then building a model to link them with one of the most recognized cultural representations. An exploratory quantitative research is conducted to test the model. More than four hundred Thai IT professionals anonymously and voluntarily participated in an online survey. Statistical analysis of the results of the survey reveals that certain cultural dimensions have statistically significant connections to the risks. Yet, the practical significance of these relationships is not very high. Nevertheless, employing extra awareness and appropriate mitigation strategies towards these risks could help maximize the benefits from offshore outsourcing of software projects.