A multifactor model for international plant location and financing under uncertainty
Computers and Operations Research - Special issue: Applications of integer programming
Software Engineering Economics
Software Engineering Economics
Software Cost Estimation with Cocomo II with Cdrom
Software Cost Estimation with Cocomo II with Cdrom
Quatitative IT portolio management
Science of Computer Programming
A Case for Using Real Options Pricing Analysis to Evaluate Information Technology Project Investment
Information Systems Research
Assessing the Risk of IT Outsourcing
HICSS '98 Proceedings of the Thirty-First Annual Hawaii International Conference on System Sciences-Volume 6 - Volume 6
Contracts in Offshore Software Development: An Empirical Analysis
Management Science
Information systems outsourcing: a survey and analysis of the literature
ACM SIGMIS Database
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Global sourcing of Information Technology (IT) work has become a widely accepted practice among transnational corporations. Most of the big IT Services Providers (ITSPs) maintain a portfolio of globally distributed delivery centers and have to decide on the assignment of specific software development projects to their available sites. ITSPs have to consider expected costs, risks, and interdependencies between projects and sites when making value-based sourcing decisions. However, value-based decision approaches that are both well founded in theory and applicable in practice have until now been missing in the Information Systems literature. As decision making with respect to the construction of portfolios of risky financial assets exhibits similar characteristics compared to value-based sourcing decision making, we base our approach on the Modern Portfolio Theory. This paper makes two contributions in this context: (1) It provides a conceptual foundation for the application of Modern Portfolio Theory within the scope of global sourcing of software development projects by ITSPs. Therefore, we adapt the Modern Portfolio Theory to ensure an optimal and full allocation of given software development projects to available sites. Our newly formed model considers site/project combinations as risky assets, assumes discrete portfolio shares, and factors in transaction costs as well as dependencies between both projects and sites. (2) It is the first to actually apply Modern Portfolio Theory using a real world business case. Thereby, we illustrate that using our model leads to considerably different project allocations to the available delivery centers of our case company as well as to substantially lower costs of the sourcing portfolio.