Abstract for: Managing Complexity and Uncertainty in Offshore Outsourced New Product Development Projects
Extant research on offshore outsourcing has largely studied non-core, fairly routinized tasks, such as IT services and BPO. However, companies have recently begun outsourcing higher-end work entailing greater complexity and uncertainty, including knowledge-based services like new product development. We hence investigate to what extent the offshore outsourcing approach can effectively transfer to such projects, by developing a simulation model based on field research of a sample of global software development projects conducted by a leading Indian outsourcing vendor with its customers. We contrast the global delivery model with a so-called consulting model and find that each approach is more effective at handling different types of tasks, given the characteristics of its respective team structure and capability composition. The results bear implications for traditional notions of firm boundaries and organizational forms.