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4.1.3. FIRM3
Firm3 is an international IT company specializing in the design and creation of information technology systems and offering e-business solutions to clients in two principal areas: the modernization of IT systems by upgrading existing web-based technologies and the expansion of IT systems by installing new web-based services, such as customer relations and e-commerce programs. With […]
4.1.4. FIRM4
Firm4 is a subsidiary of a major European telecommunications operator specialized in the design, development and implementation of software solutions dedicated to telecom operators. Their services include high-throughput multimedia networks, digital transmissions by satellite and the deployment of third-generation mobile networks. In addition to IS and engineering services, Firm4 offers turnkey solutions that cover all […]
4.2. Offshoring drivers
As seen in the literature review (Anon (2004); Bryson and Ngwenyama (1999); Qu and Brocklehurst (2003); Huang and Yang (2000)), when companies are deciding to set up an offshore operation, they typically look at cost savings as the most prominent reason for the practice. However, as offshoring evolves to higher-level backoffice functions, cost becomes just […]
4.2.1. Cost
Drivers of outsourcing in general and offshore outsourcing in particular have already been identified in the literature review. One trend which has decisively led to the implementation offshoring is the wage difference in emerging markets and developed countries in services with equivalent qualifications. Concurrently, cost pressures caused by intensified global competition propel the trend of […]
4.2.2. Labour pool
Although regarded as a secondary factor by the majority of the literature, the availability of skilled and flexible IT professionals in developing nations is one of the main drivers of offshoring. Shortage of qualified resources in my interviewees’ countries drove costs up and led them to look elsewhere for alternatives. The important exodus of IT […]
4.2.3. Quality
Quality has been mentioned in conjunction with cost, as most companies realise that cost savings cannot be truly realised without attention to quality. My research generally confirmed that this issue is considered seriously for the European firms that are offshoring IT services to Morocco. My respondents noted that a key aspect of control of the […]
4.2.4. Other factors
There are a variety of secondary aspects of offshore outsourcing that may not be prominent if taken in isolation. These generally serve to support the assessment once a company has been convicted that by going offshore, it will save costs without compromising quality. For any company making the decision of moving certain work to an […]
4.3. Morocco as a Nearshore destination
In an integrated global economy, a country is privileged if it can find a comparative advantage in an industry where major positions have not yet been taken. Morocco has identified an opportunity to become an offshoring centre for Europe’s francophone and Spanish-speaking firms. According to a 2003 McKinsey Global Institute study, from 2003 to 2018, […]
CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS
The objective of this dissertation was Identify the reasons behind the recent trend in IT services offshoring, to examine the main drivers that influence offshore outsourcing of IT projects and to evaluate potential competitive advantage that could Morocco take from this phenomenon. Multiple case studies have been analysed for the purpose to gain more insight […]
REFERENCES AND BIBLIOGRAPHY
1. Accenture (2004), Driving High-Performance Outsourcing: Best Practices from the Masters, Executive Survey Results, Technical Report 2004. 2. Amberg M., Fischl F., Wiener M. (2004). Background of IT Outsourcing. Working Paper No. 03/2005, Department for Business Information Systems III, Friedrich-Alexander University, Germany. 3. Anon (2004). Impact of Configuration on IT Outsourcing Relationships. Proceedings of the […]
APPENDIX : INTERVIEWS QUESTIONNAIRES
As a part of a dissertation research at Oxford Brookes University, we are conducting research regarding the opportunities of IT services offshoring in Morocco. The purpose of the study is to determine the most influential drivers that lead many European companies to outsource their IT activities to Morocco, to establish the extent to which these […]
IT SERVICES OFFSHORING IN MOROCCO
IT SERVICES OFFFFSHORING IN MOROCCO
Auteur : Adil MSATFA
Oxford Brookes University
EXECUTIVE SUMMARY
This study discusses information technology outsourcing to offshore locations; it focuses on the case of Morocco as an IT services provider for an increasing number of European organizations. The study was motivated by the importance that took the phenomenon of offshoring over the last years and how its significant increase has influenced the organizational models […]
CHAPTER 1: INTRODUCTION
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1.1. Background
Offshoring is the increasingly widespread practice of moving IT and other business processes to other nations where skilled knowledge workers earn less than their local counterparts. As software skills become commoditized and as standard transactions become able to be processed on a global basis, decision makers are looking at this practice to cut IT costs […]
1.2. Previous research
The literature regarding offshoring is replete with analysis from either side extolling or decrying the effects of implementation. It is clear that many of these analyses come from those who have a stake or ideology that drives their perspective. The issue has generated a number of studies on a wide range of topics such as […]
1.3. Aims of this research
The following are the overall aims of the research: Identify the reasons behind the recent trend in IT services offshoring? Identify the main drivers that influence offshore outsourcing of IT projects? Identify potential competitive advantage could Morocco have over its main offshore competitors? Identify how could Moroccan IT industry reach a […]
CHAPTER 2: ACADEMIC LITERATURE REVIEW
Offshore outsourcing is a new and swift-moving activity. Most documents are almost inevitably outdated as soon as they are published. In addition, the phenomenon itself changes at a breathtaking pace. However, to a large extent, the issue of offshore outsourcing involves the same fundamental questions addressed by economists for more than two centuries concerning the […]
2.1. What is offshoring?
Perhaps due to the emerging nature of the concept, no commonly accepted definition of offshoring exists. It is often used interchangeably with outsourcing. Outsourcing typically refers to the practice of one company hiring another company to perform tasks that used to be done in-house (Bednarzik, 2005). Lacity and Hirschheim’s (1993) define outsourcing as the purchasing […]
2.2. Offshoring and Outsourcing
Organizations have to make two separate decisions, one concerning the boundary of the business and the other concerning the location of their activities. They may opt to ‘buy’ rather than ‘make’ inputs and services in-house. Outsourcing involves greater specialization as companies switch from performing inputs internally to sourcing them from an external supplier; whereas, offshoring […]
2.3. Enabling Factors for recent Offshoring trend
Information technology outsourcing is said to have originated with the Kodak–IBM outsourcing agreement of 1989 (Loh and Venkatraman, 1992). Yet the form and range of IT outsourcing have undergone two key transformations since that date. First, it has expanded beyond just the outsourcing of IT to encompass entire business processes, which are underpinned or enabled […]
2.4. Incentives for IT offshore outsourcing
Organisations are continually thinking of about how best to produce, market, and distribute a product or service and ask themselves whether they truly need to own all the processes within their companies. The academic literature helps to explain the circumstances under which decisions, on contracting some production activities with an unrelated party, and/or splitting production […]
2.4.1. Transaction Cost
To compete in increasingly competitive economic environments, decisions to offshore company activities are essentially driven by factors related to costs of production, distribution and productivity (Olson, 2006). When deciding which IT activities shall be outsourced, Transaction Cost Theory is among the most frequently mentioned theoretical foundations. Transaction cost theory, which was pioneered by Coase (1937), […]
2.4.2. Global Resource pool
Aside from cost savings, firms may have other incentives to offshore. The availability of abundant, skilled and flexible human capital in the developing countries is one of the main drivers of offshore outsourcing. The global IT service delivery model has one fundamental hypothesis: IT skills, knowledge and services can be competitively extracted, reconstructed and delivered […]
2.4.3. Quality improvement
For years there has been dissatisfaction about the quality of packaged outsourced software and the torrent of bugs, fixes and patches. Most firms realise now that a low cost service in IT that does not deliver quality could erode savings as more effort will be required to correct badly delivered solutions. Therefore, the lower cost […]
2.5. Offshore versus Nearshore
As the phenomenon of offshoring has matured in IT field, we are witnessing segmentation in the marketplace. A range of ”shoring” and ”sourcing” terms have sprung up: “farmshoring”, “multishoring”, “rightshoring”, to list a few. At least one has even been trademarked: “AnyShore” (Carmel and Abott, 2006). Of particular prominence among these terms is “nearshoring”: Nearshoring […]
2.5.1. Geographic proximity
A study by Carmel and Abott (2006) identified 46 nations in which nearshoring activity is occurring, these nations are clustered in three major global areas. A nearshore cluster is associated with relatively easy travel, similar time zones, and closeness in culture and/or language. As showed in the map of Figure 4, one cluster of 19 […]
2.5.2. Dimensions that Constitute Nearshore
Over the last decade many studies on global software development have documented that distance introduces difficulties. There are many reasons for these difficulties including communication, control and supervision, coordination, creating social bonds, and building trust (Carmel and Tjia, 2005). Distance from the client, far from being a non-issue, is re-emerging as important in developing a […]
2.6. Summary
The recent rapid development and dissemination of information technologies have had enormous economic impacts through the transformation of work processes and organisational structures. Large parts of the economy have become digitized which has enabled business activities to be conducted in entirely new ways, as well as across large distances. As a result offshore outsourcing has […]
CHAPTER 3: RESEARCH METHODOLOGY
This chapter describes the research design, methodology and procedure of the study for this dissertation. Specifically, this chapter highlights the research philosophy, approach, strategy and data collection procedures. Research methodology is a set of structured set of guidelines or activities to assist in generating valid and reliable research results (Mingers, 2001, p.242). The research process […]