Framework For Offshore Systems Development And Deployment In Kenyan Organizations

Abstract

Offshoring refers to the movement of service-sector jobs from developed economies to offshore locations that are cheaper. Most companies opt to offshore systems development and deployment with the aim of reaping benefits such as reduced costs, but fail to consider the risks and challenges associated with such arrangements. The main objective of this research was to develop a framework for offshore systems development and deployment in Kenyan organizations. A survey study of companies in Kenya was taken. The study was conducted through a descriptive survey design. The target populations were all the decision makers and implementers of offshore systems development and deployment in companies trading at the Nairobi stock exchange totaling 60 in number. Samples of 52 firms were used in the research. The research used primary data that was collected through a self-administered questionnaire. The research yielded quantitative data from the questionnaires, which were analyzed using descriptive statistics and factor analysis. Correlation Analysis was also used to establish the relationship between various factors and organization performance/value. The data was analyzed and presented using tables, pie chart and graphs. Results and conclusions indicated that there are several benefits and risks and challenges of offshore systems development and deployment. These benefits include cost savings, quality, human capital (Solution to the IT skills shortage), and simplicity and remain focused on core competencies. The risks and challenges include operational problems, loss of competencies, threat of opportunism, detailed specifications required and unexpected costs/hidden costs. The factors influencing offshoring include cost, legal, cultural, IS security, human resource and infrastructural, specialization, and cost reduction and quality factors. The research recommended that companies entering into offshore systems development and deployment should consider the benefits and the risks/challenges associated with such arrangements.