A comparative study of important risk factors involved in offshore and domestic outsourcing of software development projects: A two-panel Delphi study

  • Authors:

  • Robbie T. Nakatsu;Charalambos L. Iacovou

  • Affiliations:

  • Loyola Marymount University, College of Business Administration, 1 LMU Dr., Los Angeles, CA 90045, United States;Wake Forest University, Babcock Graduate School of Management, Winston Salem, NC 27109, United States

  • Venue:
  • Information and Management
  • Year:
  • 2009

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Abstract

We investigated the risk factors of outsourced software development. Our first objective was to create empirically generated lists of risk factors for both domestically- and offshore-outsourced projects. Our second objective was to compare these two contexts: how do the risk factors change and which ones are most important in each. To address these objectives, we conducted two Delphi surveys to identify the important risk factors from a client perspective, in domestic and offshore settings. We qualitatively compared the results of the surveys to identify similarities and differences across their risk profiles. We identified three types of risks: those that appeared in both contexts; those that appeared in both but were exacerbated in the offshore context; and those that were unique to the offshore context. Our findings suggested that traditional project management risks were important in both contexts; however, the offshore context seemed to be more vulnerable to some traditional risks as well as factors that were unique to it.