Abstract for: High-Value Outsourcing: Impact of Team Structure and Capabilities on Complex and Uncertain Offshoring 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 an offshore outsourcing approach based on distinct strategic complementarities is better at addressing sophisticated higher-end work, given the characteristics of its team structure and capability composition. The results bear implications for traditional notions of firm boundaries and organizational forms.