Key Governance Factors in Geographically Distributed Delivery

Key Governance Factors in Geographically Distributed Delivery

Ruiter, N.

Moonen, L.J.M.T. (mentor)
Plugge, A.G. (mentor)

Technology, Policy and Management

Management

Engineering & Policy Analysis

2011-06-06

Over the last decade, offshore outsourcing of IT services increased in volume every year. Every year new clients start with outsourcing IT services to lower cost countries like India or China. New suppliers start offering offshore outsourcing IT services on a regular basis. Expected is that this trend will continue, despite the fact that relatively seen a large percentage of offshore projects will fail. Research identifies that about 50% of offshore outsourcing initiatives fail with 46% of the work performed by offshore teams with insufficient quality. Although the realization of cost savings is not always one of the primary reasons to start with offshore outsourcing, 53% of the offshored projects result in equal or more cost compared to projects performed locally in Europe or North America. The base problem that is covered in this thesis is the fact that despite utilizing lower cost resources in the offshore projects, the performance of offshored projects from the perspective of cost are often not as high as should be expected. However, as the total performance of the project is not solely depending on cost, the performance of projects will be considered from the perspective of seven performance criteria, being: scope, cost, time, quality, project management quality, team satisfaction and customer satisfaction. The handles provided in this thesis to solve the performance issue mentioned above are focused on the term governance. Research proves that projects with effective governance may lead to 20% more profits than projects in which governance will be negleted. In other words, a lack of a proper governance structure will hinder achieving generic business and individual project goals. It will also hinder transparency between all stakeholders involved. Hence, governance should help to organize and control a project better and should help to avoid troubled situations. The governance model that is developed in this thesis will consist of several governance factors. In the literature there is limited information available from a functional governance perspective. Functional governance is governance oriented on the level of individual projects. To mitigate the lack of research to governance at the level of individual projects, governance factors have to be identified using a different approach. This approach will be based on identifying risks, success factors and best practices leading to governance factors required to develop the governance model for offshored projects.

governance
governance factor
offshoring
geographically distributed delivery

http://resolver.tudelft.nl/uuid:8ceddd12-b103-4a20-840f-fd0ba1d96210

Campus only

Student theses

master thesis

(c) 2011 Ruiter, N.