Is Information Systems (IS) Offshoring an Extension of IS Outsourcing?: Concept, Definition and Determinants

Abstract : Some researchers focusing on information systems (IS) offshoring argue that results from previous studies on onshore IS outsourcing can be extended and applied to IS offshoring. However, others have the opinion that IS offshoring has its unique characteristics because of which, research made in onshore IS outsourcing cannot be extended without testing its applicability to the offshore context. This tension motivates the current research to examine whether determinants of IS offshoring are indeed the same as determinants of onshore IS outsourcing? If not, what are the implications? This chapter examines the role of business related firm level variables in determining the offshoring intensity of firms. The four business related variables that are analyzed in this study are: business size, business cost, business financial leverage, and business performance. The results indicate a significant relationship between business size and offshoring intensity, and also between business financial leverage and offshoring intensity. Based on the results, we analyze similarities and differences between traditional onshore IS outsourcing and IS offshoring. Implications and contributions arising out of this study are also discussed.