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Numminen, Emil
Publications (2 of 2) Show all publications
Smite, D. & Numminen, E. (2019). Fair comparison of developing software in different locations: dynamic decision model. World Review of Intermodal Transportation Research (WRITR), 8(2)
Open this publication in new window or tab >>Fair comparison of developing software in different locations: dynamic decision model
2019 (English)In: World Review of Intermodal Transportation Research (WRITR), ISSN 1749-4729, E-ISSN 1749-4737, Vol. 8, no 2Article in journal (Refereed) Published
Abstract [en]

While offshore software development is frequently looked at in simple economic terms, assumed benefits are not always achieved. This can be attributed to unexpectedly high transition costs and a number of extra costs for maintaining a sourcing strategy. When offshoring fails, companies need to revisit their decision. In this paper, an analytical model is proposed to support evaluation of offshoring strategies and decision options. The model focuses on value comparison, and treats outcomes of offshoring relationships more fairly and realistically than a naïve salary comparison. The model is a development of models with extensions motivated by lessons learned from two empirical cases. The model is designed to consider more decision outcomes than previously suggested. In contrast to current practice focusing on economic profits from the salary differences between onshore and offshore, we focus on the differences between expected and realised outcomes by analysing strategic benefits created by options and measuring the same time-value. Finally, consequent decision situations provide a dynamic view on supporting chains of decisions.

Keywords
offshoring decisions, cost calculation, transaction cost economics, opportunity costs, options, cost/benefits, software development
National Category
Economics and Business
Identifiers
urn:nbn:se:hkr:diva-19249 (URN)10.1504/WRITR.2019.099131 (DOI)
Available from: 2019-04-29 Created: 2019-04-29 Last updated: 2019-04-29Bibliographically approved
Šmite, D., Wohlin, C., Aurum, A., Jabangwe, R. & Numminen, E. (2013). Offshore insourcing in software development: structuring the decision-making process. Journal of Systems and Software, 86(4), 1054-1067
Open this publication in new window or tab >>Offshore insourcing in software development: structuring the decision-making process
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2013 (English)In: Journal of Systems and Software, ISSN 0164-1212, E-ISSN 1873-1228, Vol. 86, no 4, p. 1054-1067Article in journal (Refereed) Published
Abstract [en]

A variety of new forms of business are enabled through globalization and practiced by software organizations today. While companies go global to reduce their development costs, access a larger pool of resources and explore new markets, it is often assumed that the level of delivered services shall remain the same after implementing the sourcing decisions. In contrast, critical studies identified that global software development is associated with unique challenges, and a lot of global projects fail to mitigate the implications of a particular global setting. In this paper we explore offshore insourcing decisions on the basis of empirical research literature and an empirical field study conducted at Ericsson. By analyzing decisions in two different cases we found that each offshore insourcing decision consisted of deciding what, where, when, how and why to insource. Related empirical research and field observations suggest that not all combinations are successful and alignment between different decision points has thus a prominent role. To address these concerns we built an empirically-based insourcing decision structure, which outlines a logical path through the decision options and helps selecting an offshore insourcing strategy that targets creation of the necessary alignment. The key element of the proposed approach is a structured and well-defined decision-making process, which is intended to support managers in their decision-making. The usefulness of the proposed approach is evaluated in an additional empirical case of a new offshore insourcing decision.

Keywords
Global software development, Offshore insourcing, Sourcing, Go-global decisions, Empirical field study
National Category
Business Administration
Identifiers
urn:nbn:se:hkr:diva-9980 (URN)10.1016/j.jss.2012.10.003 (DOI)000316831700013 ()
Funder
The Knowledge Foundation, KK-Hög 2009/0249The Knowledge Foundation, BESQ+ 2010/0311
Available from: 2013-01-03 Created: 2013-01-03 Last updated: 2017-12-06Bibliographically approved
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