Friedrich-Alexander-Universität Erlangen-Nürnberg

CRITICAL SUCCESS FACTORS OF OFFSHORE SOFTWARE DEVELOPMENT PROJECTS

Lehrstuhl für BWL, insb. Wirtschaftsinformatik III, Prof. Dr. Michael Amberg
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Relevance

First, the CSF are analyzed in regard to their general relevance. Here, we asked the participants of the online survey to assess the degree of relevance of each individual CSF. The assessment of the CSF was carried out by means of a Likert scale with values from 1 to 5, whereas 1 was equivalent to “not relevant” and 5 equivalent to “significantly relevant”.

The Table "CSF relevance" ranks the 29 CSF by the arithmetic mean (AM) and the standard deviation (SD) of their relevance ratings in descending order. In line with our two-dimensional CSF model, the table also indicates for each CSF, if this factor represents an internal suitability (ISF), an internal management (IMF), an external suitability (ESF), or an external management factor (EMF).

In addition, the Table compares the relevance ratings of all participants with the respective ratings of those participants who possess a high experience with OSD projects. Through this, we aimed to find out, if it makes sense to focus on the answers of more experienced participants within the data analysis process.

Table: CSF relevance

 

All participants

Participants with high experience

Rank/
ID

CSF

CSF
Group

AM

SD

AM

SD

1

Definition of clear project goals

IMF

4.75

0.537

4.73

0.564

2

Continuous controlling of project results

EMF

4.73

0.509

4.75

0.437

3

Ensuring of a continuous communication flow

EMF

4.69

0.524

4.71

0.457

4

High quality of offshore employees

ESF

4.67

0.493

4.65

0.520

5

Good language abilities of the offshore employees in German and English

ESF

4.55

0.763

4.56

0.639

6

Composition of an appropriate project team

EMF

4.54

0.623

4.52

0.577

7

Preparation of a detailed project specification

IMF

4.52

0.654

4.54

0.609

8

Creation of a partnership-like relationship

EMF

4.30

0.802

4.44

0.669

9

Sustained management support

ISF

4.29

0.859

4.40

0.846

10

Establishment of an efficient IT infrastructure

EMF

4.25

0.737

4.27

0.795

11

Ensuring of a bilateral know-how transfer

EMF

4.24

0.720

4.40

0.664

12

Definition of project standards

IMF

4.22

0.740

4.27

0.770

13

Financial stability of the offshore provider

ESF

4.21

0.695

4.21

0.667

14

Early internal change management

IMF

4.21

0.882

4.19

0.817

15

Standardized and documented processes

ISF

4.16

0.916

4.15

0.916

16

Standardized and documented processes on provider side

ESF

4.09

0.830

4.12

0.922

17

Definition of an accurate contract

EMF

4.06

0.927

4.00

0.840

18

Legal and political stability in the offshore country

ESF

3.95

0.922

3.98

0.939

19

Face-to-face meetings with the offshore provider on a regular basis

EMF

3.95

1.115

3.92

1.064

20

Selection of a suitable software component

IMF

3.93

1.182

3.90

1.241

21

Efficient internal organizational structure

ISF

3.83

0.864

3.81

0.817

22

Creation of a cultural sensibility among employees

IMF

3.67

1.033

3.69

1.001

23

Comprehensive industry knowledge of the offshore provider

ESF

3.59

1.004

3.65

1.046

24

Appropriate internal technical knowledge

ISF

3.59

1.175

3.46

1.128

25

Development of a comprehensive business case

IMF

3.42

1.133

3.58

1.177

26

Suitable company size of the offshore provider

ESF

3.28

1.033

3.15

1.036

27

Comprehensive experience with IT outsourcing projects

ISF

3.28

1.088

3.00

1.048

28

International corporate culture

ISF

3.22

1.093

2.92

0.987

29

Geographical closeness of the offshore provider

ESF

2.62

1.351

2.60

1.361

 

Average

-

4.03

0.869

4.02

0.847

According to the results of our online survey, the „Definition of clear project goals” represents the most relevant CSF. With 4.75, the arithmetic mean of this CSF almost reaches the maximal relevance rating of 5.0. In addition, with 0.537, the CSF exhibits a low standard deviation, which makes clear that the high relevance of this CSF was confirmed by the great majority of the participants. Other CSF, which were rated as significantly relevant for the success of an OSD project, are the “Continuous controlling of project results“, the “Ensuring of a continuous communication flow“, the “High quality of offshore employees“, the “Good language abilities of the offshore employees in German and English“, the “Composition of an appropriate project team“, and the “Preparation of a detailed project specification“. All of these CSF dispose of an arithmetic mean of higher than 4.5.

The Table further clarifies that, apart from the lowest ranked CSF “Geographical closeness of the offshore provider“, the arithmetic means of all CSF are above the median (3.0). This finding empirically confirms that these CSF can be regarded as relevant for the successful implementation of an OSD project. With regard to the relevance rating of the lowest ranked CSF, it is noticeable that this value possesses a relatively low significance, due to a high standard deviation of 1.351. Therefore, we decided to not remove this factor from our CSF list.

In addition, the Table points out that the assessment differences between all participants and those participants with a high OSD project experience are rather marginal. In this context, the difference of the average relevance ratings, granted by the corresponding participant groups, only amounts to 0.01. For this reason, we decided to incorporate the information provided by all of the participants within the data analysis process.

Table "CSF relevance (classified by CSF dimensions)" ranks the 29 CSF by relevance within the four CSF groups of our CSF model.

Table: CSF relevance (classified by CSF dimensions)

 

Static

Dynamic

Internal

ID

Internal suitability factors (AM)

ID

Internal management factors (AM)

9

Sustained management support (4.29)

1

Definition of clear project goals (4.75)

15

Standardized and documented processes (4.16)

7

Preparation of a detailed project
specification (4.52)

21

Efficient internal organizational structure (3.83)

12

Definition of project standards (4.22)

23

Appropriate internal technical knowledge (3.59)

14

Early internal change management (4.21)

26

Comprehensive experience with IT
outsourcing projects (3.28)

20

Selection of a suitable software component (3.93)

28

International corporate culture (3.22)

22

Creation of a cultural sensibility among employees (3.67)

 

 

25

Development of a comprehensive business case (3.42)

External

ID

External suitability factors (AM)

ID

External management factors (AM)

4

High quality of offshore employees (4.67)

2

Continuous controlling of project results (4.73)

5

Good language abilities of the offshore employees in German and English (4.55)

3

Ensuring of a continuous communication flow (4.69)

13

Financial stability of the offshore provider (4.21)

6

Composition of an appropriate project team (4.54)

16

Standardized and documented processes on provider side (4.09)

8

Creation of a partnership-like relationship (4.30)

19

Legal and political stability in the offshore country (3.95)

10

Establishment of an efficient
IT infrastructure (4.25)

24

Comprehensive industry knowledge of the offshore provider (3.59)

11

Ensuring of a bilateral know-how transfer (4.24)

27

Suitable company size of the offshore
provider (3.28)

17

Definition of an accurate contract (4.06)

29

Geographical closeness of the offshore provider (2.62)

18

Face-to-face meetings with the offshore provider on a regular basis (3.95)

When calculating the average arithmetic means for each CSF group, it becomes apparent that the external management factors represent the most relevant CSF group (average arithmetic mean of 4.35), followed by the internal management factors (average arithmetic mean of 4.10). This finding makes clear that these CSF groups are particular important for the success of an OSD project. In contrast, the participants of the online survey assessed the internal suitability factors (average arithmetic mean of 3.73) and the external suitability factors (average arithmetic mean of 3.87) as less relevant for the successful implementation of such a project.

References


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