Offshoring IT Services: Influencing Factors

Abstract

A growing number of American companies have embraced offshore outsourcing (offshoring) of services. More recently, offshoring has expanded to include more sophisticated and advanced activities like research, design, engineering, and product development. Few empirical studies have been conducted on the forces driving offshoring in the Information Technology (IT) sector. The theoretical frameworks explaining the increase in globalization have often neglected the service sector – now accounting for a significant proportion of global trade volume. In this study, the authors partially address this gap by investigating factors that influence offshoring decisions made by IT managers in the United States.