Cultural Challenges on Information Technology Outsourcing

Abstract

Outsourcing in information technology (IT) industry is growing exponentially. Numerous articles have covered the reasons why companies choose to outsource. In this research, the authors have looked into the challenges that may arise from IT outsourcing with a specific focus on the cultural concepts of this booming business. This paper can serve as a brief guideline on how cultural differences can influence IT outsourced projects and what practical management can be applied to address those challenges in order to facilitate the process of outsourcing. In doing that, this paper has adopted a qualitative approach to find the answers with the use grounded theory. The research is based on literature review by studying recent relevant articles and published sources which provide a comparative basis of analysis. The result has shown that cultural factors not only directly play a vital role in the success of IT outsourcing projects, but also have great impacts on critical domains across the cooperation between outsourcer (client) and supplier (vendor) including perception, communication and relationship. Thus, prior to any IT outsourcing collaboration with foreign cultures, it is imperative to enhance the cultural awareness of both participants of client and vendor to prevent any probable challenges that may lead to a project failure.