Software industry in Okinawa: the critical success factors for the Japanese Bangalore

  • Authors:
  • Atsushi Kato

  • Affiliations:
  • Doshisha Women's College, Kyotanabe City, Kyoto, Japan

  • Venue:
  • Proceedings of the CUBE International Information Technology Conference
  • Year:
  • 2012

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Abstract

How should Japanese local IT firms promote sustainable business model through outsourcing? As major enterprise software customers are concentrated in Tokyo metropolitan area, most Japanese local software firms dispatch their engineers to the onsite development base. This Onsite dispatch model is vulnerable for cost reduction request and unfavorable to foster skillful engineers in local IT industrial clusters. We consider the advanced case of Okinawa prefecture, where "Domestic Offshore" is promoted most vigorously. The researcher examines the Critical Success Factors for their further development with Porter's Diamond framework. It is found that the most important factor is the promotion of Onsite-Offshore model. This model is indispensable for human resource enhancement, collaboration with high end customers and creation of synergy effect with related and supporting industries. We build a cash-flow model and evaluate the profitability of Onsite-Offshore through Monte-Carlo simulations.