The Role of Coordinators in Software Off-Shoring: A Knowledge Management Perspective

The Role of Coordinators in Software Off-Shoring: A Knowledge Management Perspective

Nguyen Thu Huong (Japan Advanced Institute of Science and Technology, Nomi, Japan), Umemoto Katsuhiro (Japan Advanced Institute of Science and Technology, Nomi, Japan), Dam Hieu Chi (Japan Advanced Institute of Science and Technology, Nomi, Japan) and Dang Thi Viet Duc (Posts and Telecommunications Institute of Technology, Ha Noi, Vietnam)
Copyright: © 2014 |Pages: 18
DOI: 10.4018/ijkss.2014040101
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Abstract

This paper explains the roles of coordinators in software offshoring, and explores the collaboration of coordinators, the client and the vendor to co-create new knowledge for the both organizations. The focus is a case of software offshore outsourcing from Japan to Vietnam. Our analysis shows that the coordinators fill the communication, cultural, business and technical gaps by being involved in the process as both outsiders (as coordinators, arbitrators) and insiders (by joining directly in the production process). The implication of this study is that the coordinators could involve with strong power in the international partnership; such as in high-tech sector by the collaboration with two partners through sharing, creating, and utilizing bridging-knowledge to create extra value and increase the service quality and user satisfaction.
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Introduction

The globalization tendency and high tech era has led to the emergence of business partnering in high tech industries such as Pharmaceutical Biotechnology, Aerospace Technology, and IT. In particular since 1990s, high-tech industries have become dominant in R&D partnering, comparing with medium-tech industries1 or low-tech industries2. The high-tech partnerships enable organizations to learn from a variety of sources (partners), in a flexible setting of (temporary) alliances for various organization activities across the value chain3.

Offshoring refers to the process by which companies undertake some activities at offshore locations instead of in their countries of origin. Offshore outsourcing is one of the international business trends that have changed the way international businesses is being done in the world is in the areas of Multi Nation Cooperation (MNC), International joint ventures (IJVs), acquisition, mergers. Client companies can reduce development cost by sending part of work to an external party,.4 In addition, they can secure human resources, i.e., utilize highly skilled overseas human resource while concentrating on their core business. A service provider company can create jobs for labor, upgrade labor skills and approach advanced technology through many offshore project with clients in developed countries, which the provider company cannot obtain if they only focus on domestic development of software.

Figure 1.

Revenue of the top offshore destinations in 20105

However, by transferring some work to an external party in a foreign country, software offshoring faces up with different challenges that are synthesized in the below table.

Table 1.
Challenges of software off-shoring
        Levels        Challenges
        Inter-national level        Different languages
        Different time zones
        Geographic (multiple global locations)
        Different social backgrounds
        National cultural differences
        Different political systems
        Inter-organizational level        Different organizational cultures
        The nature of software development work
        Different business process model
        High security and Intellectual Properties Rights
        Absorptive capacity
        Inter-sectional level        Different technical level
        Ambiguity of specialized knowledge
        Absorptive capacity
        Inter-personal level        Different motivations
        Absorptive capacity
        Trust

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