Communication and suitability

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1 Communication and suitability Key factors for outsourced software projects By stud. MSc. In Telecommunication Johannes Deltorp s Supervisor Associate Professor Erling C. Havn DTU Management Engineering Department of Management Engineering Work, Technology and Organisation Technical University of Denmark 2009

2 Chapter 1 Introduction 2

3 0 Abstract Abstract This thesis looks in to the area of outsourcing and software development. More specifically outsourcing of application development. It focuses on communication, coordination and control within the software development lifecycle. It focuses on the process from start to beginning and not on the development method itself. The incentive behind this thesis is that, outsourcing has become more and more popular, and is a part of most large organization today. Outsourcing has in the past proven to give problems in form of, delays, increased expenses, etc. which is undesirable. This thesis contains a case study of two companies, NNIT and Corebuilt, respectively located in Denmark and Philippines. An empirical research gathering is presented and interview findings are discusses with relevant theory from literature. The aim of this thesis is to identify issues which can negatively affect a software development project when outsourced, and thus counter these. The primary findings are that communication and suitability of project are of high importance, and must be taken into consideration. Communication is a part of all aspects of outsourcing: requirements sharing, process coordination, team control, conflict management, contractual issues, issue and defect tracking. Even personal relations have an effect, and again they are dependent on good communication. Suitability determines how a specific software project fits with outsourcing. Some factors which change this is size, complexity, technology, length of projects, end customer and a scope which is set and unlikely to change. Helping the situation and improving the outcome is prototyping. NNIT and Corebuilt are using prototypes as part of the development process as they can; be used as a tool for improving communication between teams, visually present requirements and help customer refine requirements. 3

4 Chapter 1 Introduction Table of content Abstract...3 Table of content...4 Table of figures...6 Chapter 1 Introduction Thesis introduction Thesis content Background and reasoning Problem explanation What is outsourcing and what is offshoreing Definition Outsourcing within the IT area History My definition and usage of terms Relevance of research Outsourcing Presentation of case companies NNIT A/S Corebuilt Technologies Chapter 2 Background and related work What similar works have been done Review of similar work Definitions Frameworks and decisions Reasoning, advantages and disadvantages: Suitability for outsourcing and offshore development Coordination and control Summary of literature review NNIT s experience and process review QMIT PRINCE2 and Dolphin Corebuilt handbook Suitability matrix Prototyping Corebuilt process model Justification of problem existence Chapter 3 Research question and problem formulation Scope

5 0 Table of content 3.2 Issues from literature Research focus Limitations Problem formulation Research Questions Chapter 4 Research method Qualitative research in Information Systems Research methodology Research considerations Research approach Preparations Interviews Documentation and transcription Chapter 5 Research findings and discussion Research evaluation Anonymous interviews Interview quotes and citations Interview findings General findings Communication Requirement management Personal issues What makes projects suitable for outsourcing? Control Why some projects fail? Chapter 6 Conclusion Findings summary and key findings Research questions, answer and solutions Conclusion Limitations Chapter 7 References Chapter 8 Appendix

6 Chapter 1 Introduction Table of figures Figure 1 Outsourcing usage Figure 2 Outsourcing, Offshoreing and Offshore outsourcing Figure 3 The hard side vs. the soft side Figure 4 Drivers and Barriers Figure 5 Offshore framework (Braun, 2007) Figure 6 Organisational model (Braun, 2007) Figure 7 Key Success Factors Figure 8 Knowledge Transfer Intensity in ISD Offshore Outsourcing Project Life Circle (Yun, 2009) Figure 9 Corebuilt project life cycle Figure 10 Corebuilt process Figure 11 Research scope Figure 12 Research focuses dependencies Figure 13 Research limitation Figure 14 Research perspecive Figure 15 Interview and research question relations Figure 16 Working hours Figure 17 Requirments workflow Figure 18 Travel cost Figure 19 HTML outsourcing

7 1.1 Thesis introduction Chapter 1 Introduction This chapter acts as the introduction to this thesis elaborating on preliminary information. In this chapter I present the two companies, NNIT A/S and Corebuilt, respectively based in Denmark and Philippines. These companies will be the basis for my empirical case study. The chapter also includes definition and explanation of the terms outsourcing and offshoreing as well as a short history and an introduction to them. 1.1 Thesis introduction Background and reasoning Problem explanation What is outsourcing and what is offshoreing My definition and usage of terms Relevance of research Presentation of case companies Thesis introduction In this thesis I will take a closer look at outsourcing IT projects. Especially I will focus on project management and process guidelines of outsourced IT development projects, also referred to as application development project which will be defined later. This thesis focuses on the outsourcing process of developing IT software, not the development method itself. Neither does it focus at the organisational level but at the individual software project. This thesis contains a literature review, method theory and empirical research from two different companies. These companies coexist by outsourcing from one to the other. It is an important subject since outsourcing is, and in the future will continue to be very important for the IT industry, and the future development of IT projects. In the next section I will elaborate on the topic s relevance and importance to me, NNIT and other parties working with outsourcing of software. Some of the key issues and questions which will be addressed in this thesis are; What makes a project suited for outsourcing? Why do some outsourcing projects go wrong where others succeed? What is the common reason for projects to fail? 7

8 Chapter 1 Introduction To answer these questions and possibly improve the issues I will in this thesis apply relevant theory, both method and problem related theory and conduct a case study of two companies to gather empirical data Thesis content This thesis is about management and coordination of IT software development project along with profiling of project types and suitability in an outsourcing context. This thesis contains six chapters. In this first chapter I will introduce the topic of my thesis, background and problem explanation. This chapter also contains a presentation of two companies which I will involve in my work and from where I will gather my empirical data. Chapter two contains background research, literature review and will look into work processes from both case companies. Finally the chapter will present a problem justification. Chapter three contains my research question and problem statement; in this chapter the research questions and focus areas are presented along with scope and limitations of my research. Chapter four presents my research method, methodological framework and approach. In chapter five my findings will be presented, discussed and related to issues in literature. Finally, in chapter six, a conclusion on this thesis and its findings will be presented and discussed. 1.2 Background and reasoning In my background, as a developer, I have firsthand experience with outsourcing projects. Some experiences are good and some are not so good. In my opinion this is a field with enormous potential and growth, and it is essential in the future of IT development. I find this area very interesting and believe that a study in this field could help organisations develop outsourcing strategies as well as it helps me and my future carrier. Outsourcing and offshoreing are in many ways good and essential part of future businesses and markets. These markets fill need which local markets cannot meet and our society has grown to depend on these. Furthermore, it opens doors for new expertises, travelling and work posted abroad. 1.3 Problem explanation Today a lot of IT development projects are outsourced, for various reasons. I wish to research the area of outsourcing and offshoreing of IT services. During my research I will look at drivers and barriers of outsourcing IT services and apply theory to answer questions which arise. Furthermore I will look at existing process models with an empirical case study of NNIT A/S. NNIT A/S is a Danish IT company developing software primarily for the Danish market. In the past few years they have had an increased focus on outsourcing and 8

9 1.4 What is outsourcing and what is offshoreing offshoreing of development projects. The basic of my case study is NNIT s existing process models for outsourcing. I wish to improve the outcome of projects by applying my research and knowledge from interviews locally and abroad, thus identifying common problems and ways in which improvement can be made. This should lead to a more streamlined and consistent project management in the future. By performing interviews with key persons at home I can identify common problems in a quantitatively way and at the same time get qualitative information on these. By visiting an actual outsourcing destination I will get valuable firsthand information not only from interviews (which could have been conducted online) but also from site impressions and I can observe how they are working, their work culture and develop a personal relationship with interview subjects (outsourcing colleagues) which, as we will see later, is very important. 1.4 What is outsourcing and what is offshoreing Today there exists many forms of outsourcing; from production of goods, to manpower in form of labour or services, everything can be outsourced. Furthermore it also depends on the area of business and destination of new production site. In addition to the confusion there is a tendency to use offshoreing and outsourcing interchangeably. In this section I will briefly define and introduce these terms and present my understanding and definition for future usage through this thesis Definition Ask yourself, what is outsourcing and what is offshoreing? For most people both terms is associated with production of goods, especially IT, in developing countries. But what some people do not know is that outsourcing can just as easily be done within the same country or even within the same city. Likewise offshoreing doesn t necessarily mean that the work is moved a miles away, since some companies has worldwide offices and some offices can be located in neighbouring countries, just a few miles apart. However, companies do outsource for a reason. The common conception is to save money by utilising different advantages offered at outsourcing or offshoreing locations, like lower employee wages or expert knowledge and working skills. Does this mean that a company, Company A, using computers are outsourcing the production of computers to HP or DELL? In theory yes! Company A has assessed that HP or DELL can produce and build computer cheaper, better and more efficient that they would be able to themselves. Just like HP and DELL in terms outsource the production of specific chips and processors to Intel or AMD. Likewise, do we meet outsourcing when a company is using electricity or water? Yes, as they outsource the production of electricity to electricity companies as it is not feasible to produce this by them self. These are even mission critical elements that without a business cannot survive and loos of electricity or water will severely cripple any organisation (McFarlan & Nolan, 1995). 9

10 Chapter 1 Introduction But what is then not outsourcing? As it was just defined that service or products produced or bought from a third party or outside vendor is outsourcing. The above is a very abstract discussion and the outsourcing process could be continued infinite until the production of raw material is reached, but then again do they outsource construction of mining equipment and machinery? Some codes of conduct have to be defined as this is clearly a misunderstanding or misuse of the terms. Of course the above sample is not what we generally define and understand as outsourcing but the basically principle is the same. If a third party can produce a service cheaper and more efficient than you (like electricity) then it is a normal and necessary businesssense to buy the service from that provider instead of producing it. My definition is that when buying a service from a supplier that contributes to your company s normal line of work it is considered outsourcing or offshoreing depending on where the supplier is located. For example, NNIT buys IT developing services which contribute to their development tasks. But electricity, water and paper are tools needed to execute the job, but not parts of the product or task to produce and thus cannot be defined as outsourcing Outsourcing within the IT area As my research is conducted within the field of Information Technology (IT), a more precise explanation of outsourcing with in this area is presented here. First of all, there are several areas in which you can conduct business within IT. Each of these business areas has an equivalent way of outsourcing the business model. Different authors define different categories and types of outsourcing. A simple and general categorisation is presented by Lacity & Hirschheim (1993) with the following three perspectives; Body shopping, Project Management and Total Outsourcing. Respectively they refer to hiring consultants, outside project development and handover of IT assets and personal to a third party. As mentioned, different articles present different types and categorisations, which I will get back to in the literature review section. A more technical and precise division of IT functions as known from my point of view, and terms used today, is listed here along with their respectively relations to Lacity & Hirschheim categorisation. Outsourcing function Application development Application maintenance System operations Infrastructure, network and telecommunication management End user computing support (call centre) Consulting, System planning and management Purchase of application software Lacity & Hirschheim equivalent Project Management Project Management Total Outsourcing Total Outsourcing Total Outsourcing Body shopping Figure 1 Outsourcing usage Total Outsourcing/ Body shopping 10

11 1.4 What is outsourcing and what is offshoreing Application development, also referred to as outsourcing project, is a development project performed by a third party outside the organisation, on shore or offshore. Application maintenance is very closely related to application development and will in this thesis not be differentiated. Specifically application development is the development of a software system, where as maintenance, is as it says, maintaining of a system, bug fixing and new version, which also can be seen as a new project. With a close up view, each system or application can be seen as a onetime isolated project. An individual project, also referred to as a temporary system, is defined by Fenema (2002) as... a set of diversely skilled people working jointly on a task of some complexity over a limited time period. This last mentioned type of outsourcing project, application development, is what this thesis is focusing at, especially the management of the project as well as project characteristics History This section contains a brief history of outsourcing and offshore. Both terms are closely related but explained as separately as possible Outsourcing Outsourcing is traditionally understood as moving jobs and production many thousand miles away to China or other Far East countries. This is out of proportions blown up partly by the media. The topic is debated a lot concerning people losing their jobs or environmental consequences like ship chopping and graveyards in India. However this is not always true. The definition of Outsourcing according to (Babu, 2005) is as follows: The procuring of services or products, such as the parts used in manufacturing a motor vehicle, from an outside supplier or manufacturer in order to cut costs. Outsourcing has been going on for decades. In the late 90 s around 34 percent of companies was utilizing outsourcing. Despite it has never before been such a critical element in business success as it is today. This trend is still increasing fast and it s expected to reach 58 percent in 2010 (Barthélemy, 2003). Initially, it was the manufacturing jobs which were exposed to outsourcing, the so called Blue collar jobs (Reh, Offshoring Outsourcing To Extreme). In US, in the early 90 s these jobs were outsourced to other manufactures across the country, not overseas, where goods could be manufactured cheaper, due to economy of scale, etc. From an economical point of view, this is a good thing, as both parties benefit positively from this. The company, outsourcing its production, saves money on production costs, and the company overtaking the production sells more of its goods. 11

12 Chapter 1 Introduction In Denmark, ISS grew to one of the world s largest cleaning companies working for both private and public sectors and exporting their models to USA and other countries. Today they also act as an outsourcing destination as IIS is hosting huge call centres for not only their own services but also other companies like Cybercity (Telenor) customer support etc Offshoreing Offshoreing, which has been an even hotter topic for many years, is the moving of production to overseas countries, usually Far East. Dictionary.com defines offshoreing as: The practice of moving business processes or services to another country, esp. overseas, to reduce costs. Offshoreing was first introduced, when companies realised they could move manufacturing to eastern countries like China and India with great savings on labour cost. Through an economist eyes this is still a good deal as both parties benefit from the agreement. However, this is often not good for the employees, as it means their jobs can be lost, and thus they will need new ones. History shows entire mills and textile factories closed and moved to these offshoreing countries solely to take advantage of the lower labour rates. At first, it drew little attention when Blue collar jobs where being lost and many simply got new jobs managing the offshoreing processes, keeping an eye on things in the remote areas of business. Countries, which are usually the target for offshoreing, are Third World or development countries due to the lower labour rates and cheaper production costs for various reasons (Reh, Offshoring, Smart Business Or Shortsightedness?). Reh also notes that this helps these countries develop their labour market, and thus less Third World aid is needed to be paid from the US and other western countries to these offshoreing countries. Organisations have found a new way to reduce programming and thus development cost: send some tasks overseas! Outsourcing trends has in the past few years deviated of course, and now also the white collar jobs are being offshored (Krepchin, When Offshore Programming Works, 1993). These are usually IT jobs, where ICTs makes it very profitable due to the low transportation costs and increasing development and education in these countries Hidden costs Worth remembering, and often forgotten are the hidden costs, these apply both to outsourcing and offshoreing. Cost is not directly a part of this thesis but the history aspect and background knowledge plays an important part in understanding the issues encountered in outsourcing. 12

13 1.5 My definition and usage of terms A company might save money on production due to lower labour cost or subcontractors being more efficient, they might gain hidden costs. These are transactions costs in connection with finding a subcontractor, agreeing and negotiating contracts, transportation of goods and so forth. Other non financial hidden costs can be lowered public reputation, reduced moral of remaining staff, and boycott from customers as offshoreing is often done to Third World countries with lower human protection and environmental protection (Reh, Offshoring, Smart Business Or Shortsightedness?). When immigration rules where loosened especially in the US, it introduced body shopping (Babu, 2005). Body shopping is, when labour power is hired from other countries and brought home to the business; an alternative to offshoreing if the switching cost are greater, than what could be saved on production cost in a reasonably amount of years. It can be seen as foreign consultants. An example of this can be seen in Denmark, which has been forced to hiring foreign doctors, as it for obvious reasons is not possible, or at least not feasible, to offshore healthcare to other countries it has been necessary to body shop doctors from India, Pakistan and other countries offering skilled personal. Another example is the huge work force of craftsmen from Eastern Europe, which are working in Denmark, as they work cheaper than the Danish craftsmen. The bottom line is that it is generally considered reasonable to outsource or offshore, as long as it is actually saving you money or helping your organisation to achieve a goal. At least this is the conclusion of Reh s article that offshoreing for a business is profitable, but as it introduces other costs and lost jobs, thus in the long run seen from an entire countries economical point of view the benefit might be rather shortsighted. The economic logic is to reduce costs. The idea is that countries should freely trade the items that cost the least for them to produce My definition and usage of terms As presented above, it is clear that there exists a significant difference between outsourcing and offshoreing. From an economical point of view they are very closely related. Outsourcing is clearly company dependent based on buying and selling, whereas offshoreing is based on utilising geographical location. Thus, a company offshoreing is taking advantage of the drivers and reduced costs, which can be gained offshore, but it is not outsourcing, as it is still production internally in an organisation. The bottom line is that both are done for one or more reasons: Cut costs and reduce expenses 1 This presumption is based on Offshoreing found at Wikipedia, 13

14 Chapter 1 Introduction Acquire man power and competences Returns to scale Strategic goals As mentioned, the thesis is mainly focused on outsourcing which will be its main concern and the source of my case study. However, from time to time in articles and in a comparison context offshoreing can appear and will be included in the discussion. Even though there is a clear difference, the two are related and have several issues in common; the term offshore outsourcing applies when outsourcing is done in an offshore country, i.e. a combination of the two, illustrated in Figure 2. As we will see later on in the literature review, different articles use different terms. Some are focused on outsourcing and some are focused on offshore, still the overall theme and topic is the same and the articles are very much related and comparable. This clearly shows that both terms can be used and coexist, I will however primarily use the term outsourcing referring to business to business relations unless it is actually offshore within one organisation. Offshore outsourcing Outsourcing Offshoreing Figure 2 Outsourcing, Offshoreing and Offshore outsourcing 1.6 Relevance of research IT outsourcing is increasingly being utilised by large organisations which only a few years ago did not consider this an option (Møller Christensen, 2009). Studies conducted in Europe shows that 1 in 3 of all larger organisations are using IToutsourcing one way or another. Yet another third is considering it within the next year, while the last third is not interested. However, there is a growing interest. Statistics shows an increase from last year and until recent times in the first two areas and more than half of the organisations not considering last year are now considering outsourcing, plausible because of the 14

15 1.6 Relevance of research worldwide financial crises in 2009 (Møller Christensen, 2009) as part of adapting to customers and global market trends. Global projects and ICT is a vital tool for achieving economies of scale (Fenema, 2002), which is one of the reasons that organisations turn towards this trend. IT and software compared to other products can be easy to move around and doesn t require special equipment for reproducing. Global projects exemplify the shift towards an international networked economy with virtual workplaces. ICT enables organisations to leverage knowledge and other local resources on a global scale (Fenema, 2002). An article, more than 15 years old addresses the ever growing need and demand for larger more complex and tailored software solutions (Ravichandran & Ahmed, 1993). Maybe due to the fact that cost of hardware is falling and the computation power is rapidly increasing, enabling custom applications to be executed on personal computers, phones and other mobile devices, cost of development is increasing. Now more than 50% of organisations IT cost are used on new software development (Ravichandran & Ahmed, 1993). Due to this high development cost, one can easily see why organisations are interested in outsourcing software development as the cost of development, i.e. developer salaries, takes a big piece of the cake Outsourcing 2.0 A new wave of outsourcing is now taking place, referred to as outsourcing 2.0 (Steno, 2009). Previously both outsourcing and IT outsourcing was done primarily with production and to take advantage of lower wages. Now, as mentioned in 1.4.3, all jobs are in danger of being moved and large organisations are structuring their business to fit in outsourcing which is the reverse aspect then previously. By using outsourcing organisations can develop products and deliver services as it fits the customers. Outsourcing is going from being a practical and tactical solution with low wages and variable economy too outsourcing 2.0 which is going to be the central part of organisations business strategy and structure (Steno, 2009). The same trend is noticed by Møller Christensen (2009) who reports on research show that organisations are now outsourcing to meet customer demands and tailored solutions. Previous outsourcing was done to places with low wages but now outsourcing is done to places with the right competences, again leaning towards global economy (Møller Christensen, 2009). Outsourcing and outsourcing 2.0 has been and will be increasingly popular and as articles show unavoidable and obligatory for organizations in the future. It is thus extremely important for any organization to consider outsourcing and whether it is a good fit for the hole organization or parts of the organisation. This research can help guide decision makers to decide when and when not to outsource within the field of application development. Many of the findings and discussions are also applicable to outsourcing in general which makes this research a valuable asset for organisations working with IT. 15

16 Chapter 1 Introduction 1.7 Presentation of case companies As mentioned in the introduction, I will gather empiric data on the subject from two separate companies, one who is utilising outsourcing and the counterpart offering outsourcing services. These companies have been carefully selected for several reasons. First of all, for my already established relations with NNIT. Secondly, they both have several years of experience with outsourcing. And finally, they have worked together on countless projects and thus aspect and issues from both sides of the same project can be interpret. In the following section both of these companies will be introduced shortly by explaining what they are and what they are doing NNIT A/S The company performing the outsourcing in my research is NNIT A/S (NNIT). NNIT is a Danish IT company founded in It originated from Novo Nordisk A/S, who still is the owners of NNIT today. Novo Nordisk A/S is one of the world s leading pharmaceutical companies, specialising in insulin and other growth hormone products. Before 1994, NNIT was an internal department at Novo Nordisk responsible for IT operations, support and development. As IT projects for Novo Nordisk grew in size and got more and more complex, Novo Nordisk started to outsource some of these solutions and buy them from other suppliers. It was then decided, in order to keep a high level of quality, that the internal IT department should become a separate company and begin to serve other customers than Novo Nordisk, so that they could grow bigger and get expertise from other organisations. As Novo Nordisk A/S is a pharmaceutical company, they are very conservative and restricted when it comes to accepting and trying new technology, limiting NNIT s options for improving and gaining new expertise areas. This is primarily due to the high GxP regulations and requirements with in this industry. This meant that NNIT now could test new technologies with other customers before offering them to Novo Nordisk. Furthermore, as NNIT, has roots in the pharmaceutical industry their own standards and qualities are very high. Thus most of their customers are within this segment as NNIT posses the right certifications and right competencies to best serve their needs. As part of this separation, IT projects at Novo Nordisk would from then on going through a tender biting process opening the doors for other IT suppliers and giving NNIT competition. This ensured that Novo Nordisk would get the best price and quality. 16

17 1.7 Presentation of case companies Today NNIT employs more than 1000 people and have offices in Denmark, Switzerland and China. In 2008 NNIT s turnover reached just above 1 billion DKK 2. Despite the separation Novo Nordisk continues to be NNIT s largest customer responsible for nearly 50% of their turnover. However, as NNIT is growing more rapidly than Novo Nordisk IT needs this percentage is declining year after year Corebuilt Technologies Corebuilt Technologies is a software development company based in Manila, Philippines. They specialise in developing software for the Microsoft Windows and SharePoint platform. Their business model is business to business, and their customers are other software development companies primarily in Western countries. Corebuilt is, as an outsourcer, a software factory specialising and focusing solely on the software and solutions they provide. Thus, they do not take on other activities of IT such as software sales, consulting, requirements gathering etc. Corebuilt combines the best of both worlds as they have cheep highly qualified manpower with a western (Danish) top management which leads them to succeed in being a popular outsourcing partner. The company is a technology provider to system integrators, consulting firms and IT departments of enterprises around the world. 3 Corebuilt employs around 50 employees from which 25 are developers and 5 are project managers working with outsourcing projects and the rest are shared between testers, internal managers and other personal

18 Chapter 1 Introduction 18

19 2.1 What similar works have been done Chapter 2 Background and related work In this chapter I elaborate on my literature review. In this review, I will summarise existing material related to my topic, look for challenges and issues in literature and confront these. This will identify points of interest on which I can focus my attention in my empirical data gathering and discuss in my analysis. 2.1 What similar works have been done Review of similar work Summary of literature review NNIT s experience and process review Corebuilt process model Justification of problem existence What similar works have been done In the past decade quite a lot of research in this area has been done, and even some before. However, research which focus on coordination and control is scarce (Fenema, 2002). Others claim that the qualitative research already done is focused on decision making, performance and cost, and thus not on the process and the project itself (Mahnke, Overby, & Vang, 2003). There is a need to study and research more deeply the relations within the entire outsourcing process, of what we claim to know (theoretically) and what we already know (empirically). Early efforts in research of this area have revealed many issues in outsourcing of application development. Studies from 1995 and 1996 revealed that these projects suffered from problems like delays, difficulty with time zones and quality concerns (Fenema, 2002). It is studies and identified problems like these I wish to elaborate in this chapter. This theory review will lay the foundations required for me to understand the situation and conduct my empirical research. In my problem formulation I stated that I want to research the area of coordination and management of outsourcing projects. To further tighten up my focus and problem definition, I will review and look for points of interest in existing literature and articles. This can give a clarification of the problems magnitude and an area on which to focus. 19

20 Chapter 2 Background and related work 2.2 Review of similar work In this section I wish to review some of the articles related to my research. Several high level categories are apparent, and reoccurring in the majority of literature. These categories are an ideal division of the literature and subjects. The listing below gives a rough division of which authors and respectively texts falls within each group. Definitions (Mahnke, Overby, & Vang, 2003) Frameworks and decision making (market entry) (Clott, 2007) (Braun, 2007)(Ravichandran & Ahmed, 1993)(Smith, Mitra, & Narasimhan, 1996) Reasoning, advantages and disadvantages (Herbsleb & Moitra, 2001) Suitability (Ravichandran & Ahmed, 1993) (Krepchin, When Offshore Programming Works, 1993) (Smith, Mitra, & Narasimhan, 1996) (Braun, 2007) Coordination and control of global distributed software projects (Fenema, 2002) (Meadows, 1996) Organisation management/relationships (McFarlan & Nolan, 1995)(Rajkumar & Mani, 2001)(Barthélemy, 2003) (Smith, Mitra, & Narasimhan, 1996) Knowledge Transfer within outsourcing (Yun, 2009) Definitions In the literature and online I have come across many definitions of outsourcing. In the introduction I, myself, presented my own definition of outsourcing and offshoreing. A general broad definition is defining IT outsourcing as a process undertaken by an organization to contract out or to sell the organization s IT assets, staff and/or activities to a third party supplier who in exchange provides and manages IT assets and service for monetary return over an agreed period of time (Mahnke, Overby, & Vang, 2003). This definition, however, is addressed toward the constant managing and operations of a company s IT infrastructure, support and maintenance. It is not a suitable definition for the process of outsourcing a single project for whatever the reasons might be. This problem of defining the term also leads to a more tight categorisation of outsourcing, Mahnke et al. (2003) speak of an early simple classification of system operations versus software development, but a later more detailed classification classifies outsourcing as embodying system integration, facility management, contract programming, software support, network maintenance, system operations, mini computer maintenance, mainframe maintenance and workstation/pc maintenance. This continues and with a more modern classification of outsourcing contains the following actions: application development, maintenance, system 20

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