Managing Information Technology

428 Part III • Acquiring Information Systems

For example, a multinational company may assign some
of their own IT workers based in offshore IT centers (e.g.,
in India, Brazil, or Macedonia) to an IT project led by a
project manager in the United States or the United
Kingdom—a practice referred to today as “best shore”
offshoring.
In addition, as IT outsourcing has become more
common over the past decade, companies in developed
countries have also increasingly been outsourcingIT appli-
cation projects to firms headquartered in the same country
(domestic outsourcing) or in a different country (offshore
outsourcing).
For example, countries with higher labor costs
like the United States may contract out IT projects to
develop or maintain software applications to an offshore
vendor not only in countries like India, where software
engineering skills and English language skills are

plentiful, but also in other BRIC countries (i.e., Brazil,

Russia, and China), as well as in Eastern European,

South American, and Asian countries that can provide

these services at a lower unit cost. However, project co-

ordination can be hampered by time zone differences

(morning in the United States is mid-afternoon in

Europe and nighttime in Asia) as well as a lack of mid-

dle managers with outsourcing management experience

in some of the newer outsourcing vendors (Willcocks

and Griffiths, 2010). All of these types of sourcing

arrangements increase the complexity of managing vir-

tual teams (see Figure 11.14).

Virtual teamwork can also introduce new IT

project risks due to three related factors: differences in

communication norms, unfamiliarity with a different

culture, and a lack of trusting relationships across team

members (Mohtashami et al., 2006). According to

Type of Resource Project Characteristics

Delivery team in the U.S.

Hourly charges

Managed by the client company

On-site Project Teams Delivery team in the U.S.

Hourly charges; may also be milestone fees

Managed by the client company

Project management and internal customer services in the U.S.

Delivery team offshore

Requires client efforts in building trust

Project management by offshore vendor

Requires client investment in development infrastructure

Requires increased efforts to transfer intellectual capital

On-site Contract

Worker

Mixed On-site–

Offshore Projects

Requires client investment in development infrastructure

Fees normally project-based

Pure Offshore

Projects

Fees normally project-based

Requires client and vendor efforts in building trust

FIGURE 11.14 Project Management Complexity Increases with Off-site and Offshore Resources

[Based on Poria, 2004]