Intercultural Challenges in Offshore Software Development ...

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Abstract — Offshore software development outsourcing. (OSDO) is an emerging business approach adopted by many software development organizations in ...
2011 5th Malaysian Conference in Software Engineering (MySEC)

Intercultural Challenges in Offshore Software Development Outsourcing Relationships: A Systematic Literature Review Protocol Muhammad Ilyas Azeem

Siffat Ullah Khan

Software Engineering Research Group (SERG_UOM) Department of Computer Science and IT, University of Malakand, Khyber Pakhtunkhwa Pakistan [email protected]

Department of Software Engineering, Department of Computer Science and IT, University of Malakand Pakistan [email protected]

Abstract — Offshore software development outsourcing (OSDO) is an emerging business approach adopted by many software development organizations in developed countries. Developing software at offshore locations has many benefits including access to large labor pool, low development cost and round-the-clock development. However, inspite of these benefits OSDO presents a variety of challenges to the software development organizations including temporal, geographical and intercultural differences. Intercultural differences cause many problems to vendors in OSDO relationships. This research seeks to identify the potential intercultural challenges faced by vendors in OSDO relationships by reviewing the literature in a systematic way. We have developed a systematic literature review (SLR) protocol, and are in the process of implementing the protocol. SLR is based on a structured protocol, and is therefore, different from ordinary literature review. SLR provides in-depth and more thorough results than ordinary literature review. The expected outcomes of this review will be the identification of intercultural challenges or barriers faced by vendor organisations in the establishment and maintenance of OSDO relationships. Keywords- Intercultural challenges; systematic literature review; SLR protocol; outsourcing relationships;

States and United Kingdom are outsourcing their software development projects to offshore countries from the last two decades. The developed countries are outsourcing their projects to developing countries in order to take advantage from the reduced labor cost and economies of scale. An increasing proportion of European and Japanese firms and more than 50% of the American Fortune 500 firms are users of offshore software outsourcing [6].There are many factors that attract companies towards OSDO, including access to large labor pool, better use of inadequate resources, reduction in time-to-market, and business advantages from proximity to customers [7-10]. The main reasons of switching to OSDO are reduction in development costs and reduction in development time especially via the use of follow-the-sun strategy [11, 12].

I.

INTRODUCTION

Global software development (GSD) is increasing in popularity in today’s Information Technology (IT) industry [1, 2].There are different types of GSD. e.g. outsourcing, joint venture, partnership and freelancing. Due to the high adoption of offshore outsourcing (international outsourcing) we are interested in highlighting the intercultural challenges faced by vendors in offshore software development outsourcing relationships. Offshore software development outsourcing (OSDO) is a form of GSD which is established on contract-based relationship between client and vendor organizations and primarily used by client organizations for reducing software development cost [3, 4]. “Software development outsourcing is a contract-based relationship between client and vendor organizations in which a client(s) contracts out all or part of its software development activities to a vendor(s) who provides agreed services in return for remuneration” [5]. Many client organizations in the United

However, inspite of these benefits OSDO faces many challenges like complex communication and coordination problems in conditions of time, cultural separation, geographical dispersion and telecommunication requirements [13-17]. Different studies show culture as a critical success factor in software development outsourcing relationships [18, 19]. For example Herbsleb et al, [20] in their study have identified that cultural differences among distributed team members have a negative effect on project’s performance and may cause misunderstanding. Understanding different factors in software development outsourcing relationships can help to ensure the successful outcomes of outsourcing projects and long lasting relationships between clients and vendors [21, 22]. The objective of this research is to identify the intercultural challenges/problems faced by vendors in OSDO relationships via Systematic Literature Review (SLR). The paper reports our study plan in the form of SLR protocol. The protocol presented in this paper is first of its kind in intercultural challenges in OSDO relationships. To understand intercultural challenges in OSDO relationships from vendor’s perspective, the following two questions were formulated. RQ1: What intercultural challenges or problems, as identified in the literature, are faced by vendors in offshore software development outsourcing relationships?

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RQ2: What intercultural challenges or problems, as identified in the real practice, are faced by vendors in offshore software development outsourcing relationships?1 II.

BACKGROUND

A. Culture and Offshore Software Development Outsourcing It is commonly observed that people of one society strangely perceive the acts of the people of another society. An act may have different meanings in different societies. Generally, from their life experiences people develop a set of rules and procedures for meeting their needs. Such kind of a set of rules and procedures along with a supportive set of ideas and values is called a culture. Culture is a very vast topic, you can find more than 164 definitions for culture alone [7, 23]. A well-known Sociologist and Anthropologist sir Edward Tylor (1871) defines culture as “Culture is that complex whole which includes knowledge, belief, art, morals, law, customs and any other capabilities and habits acquired by man as a member of society.” From the above definition it is clear that culture has a great impact on almost all aspects of our life. Similarly culture affects activities involve in software development outsourcing. In the field of software outsourcing, the vendors need to understand the culture of their target clients and its impact on software development lifecycle and their relationships [5, 24, 25]. Developers must focus on the culture and linguistic requirements of the target countries and local groups including developers, customers, clients, and end-users [26]. B. Relevant published literature Offshore software outsourcing involves people from different geographical locations and cultural backgrounds. This increases the need for research on the impact of national and cross cultural issues [27]. Many researchers have declared culture important for multinational companies [28, 29]. In our previous research we identified culture as a critical factor for vendor organizations in offshore software development outsourcing vendors [5, 19, 25]. The importance of culture in offshore software development cannot be ignored. This is because cultural issues can “make and break an offshore project” [30]. A number of researchers have tried to address the impact of intercultural challenges in OSDO as mentioned below: Abufardeh et al, [26] focused on the impact of cultural and linguistic aspects of global software development. They found that multi-lingual and multi-cultural aspects are very critical to the success of the GSD projects. These aspects affect directly the quality of the software, as well as the GSD process itself. It is argued that cultural influences must be thoroughly studied, fully understood and should be considered throughout the software development lifecycle. Casey [31] worked on multinational organization which outsourced a part of their software development work from Ireland to Malaysia. The research found that cross-cultural issues such as gender resulted in key Malaysian personnel being forced to leave the organization. Religion negatively

1. Note RQ2 is for our future work. It will be used after the implementation of the protocol. 476

affected the cooperation among multi-cultural team members. Similarly difference in power and control resulted in delay of the outsourced projects. Another research on the impact of culture was conducted by Casey [32]. The research aimed to educate Graduate and Post Graduate students about importance of culture and its impact on the GSD projects. The results of interviews, conducted from different experienced students, revealed that many students recognized the importance of culture in GSD. According to Holmstrom et al, [33] GSD involves stakeholders from different national and organizational cultures which presents a variety of challenges to the development team. The empirical study conducted at three US based companies, operating at Ireland, identified that socio-cultural issues such as political and religious values, cause misunderstanding and conflicts within projects. MacGregor et al, [13] found, in their research, that many problems faced by GSD projects are associated with human issues rather than technical issues. These include communication and collaboration among developers with distinct cultural backgrounds which are essential the elements in GSD projects. Intercultural factors affect the working relationships of software engineers. It has been argued, in the stated research that cross cultural problems can lead to miscommunication, misunderstanding, frustration, and underutilization of talents, presenting significant risks to the software development process. Mohapatra et al, [34] identified that cultural differences have a negative effect on the co-ordination effectiveness in GSD projects. Nicholson and Sahay [27] in their study examined some political and cultural issues in Globalization of software development. In another research conducted at UK and India, Sahay et al, [6] describes different problems related to transfer of UK culture to India. They also described the role of power and control during the outsourcing business. Oza [18] in his research on Indian software outsourcing companies, identified that cultural differences in offshore outsourcing relationships is one of the major difficulties for vendors to be managed. Vendors face various kinds of cultural issues in outsourcing relationships. The research reports the opinion of one vendor as follow: “What you say and mean in India and in another country could be entirely different. We need to overcome those challenges. I think it requires a lot of work, both by the outsourcing client and the vendor to ensure the matching of minds. We invest a lot to make it happen”. Setamanit et al, [35] identified that culture plays an important role in trust building among teams. People from the same culture develop trust more quickly than people from different cultures.

III. SYSTEMATIC LITERATURE REVIEW PROTOCOL FOR INTERCULTURAL CHALLENGES IN OSDO RELATIOSHIPS Kitchenham defines three main steps in a systematic review process: planning the review, conducting the review, and reporting the review [36]. In this paper we describe the first step of a systematic review (i.e. planning the review). The output from this step is a systematic literature review protocol that defines the purpose and procedures for the review. Kitchenham notes that a pre-defined protocol is necessary to reduce the possibility of researcher bias [36]. A. Construction of search terms The following details will help in designing a search term relevant to our research questions. Population: offshore software outsourcing vendors and clients Intervention: intercultural challenges, or characteristics, or factors, or problems Outcomes of relevance: Offshore software outsourcing Relationships Experimental Design: Empirical studies, theoretical studies, case studies, experts̓ opinions, SLRs. An example of the Research Question containing the above details is: RQ1: [What intercultural challenges/problems] INTERVENTION are faced by [Software outsourcing vendors] POPULATION in [Offshore software development outsourcing relationships] OUTCOMES OF RELEVANCE B. Search strategy 1) Trail search: A trial search was conducted using the following search string in CiteSeer digital library. ("Offshore software outsourcing" OR “IT outsourcing" OR “IS/IT outsourcing”) AND (“intercultural challenges” OR “cultural risks”) AND (relationships OR contract OR co-ordination OR partnerships). The papers retrieved through this search string will be used as a guide for the development and validation of the major search terms. 2) Identifying search terms: The following search strategy is used for the construction of search terms. a) Use the Research Questions for the derivation of major terms, by identifying population, intervention and outcome; b) For these major terms, find the alternative spellings and synonyms; c)

Verify the key words in any relevant paper;

d) Use of Boolean Operators for conjunction if the database allows, in such a way, to use “OR” operator for the concatenation of alternative spellings and synonyms whereas “AND” for the concatenation of major terms; e) Integrate the search string into a summarized form, if required. Results for a) RQ1: offshore software outsourcing, relationships, intercultural challenges or problems, outsourcing vendors Result for b) Offshore software outsourcing: (“offshore software outsourcing” OR “information systems outsourcing” OR “information technology outsourcing” OR “IS outsourcing” OR “IT outsourcing” OR “CBIS outsourcing” OR “computer-based information systems outsourcing” OR “software contracting-out” OR “distributed software development” OR “multi-site software development” OR “global software development” OR “GSD” OR “offshore software development outsourcing” OR OSDO) Relationships: (Relationships OR “teamwork” OR collaboration OR co-ordination OR alliance OR associations OR partnerships OR dealings OR contract OR interaction OR relations OR affairs) Intercultural challenges: (“intercultural problems” OR “intercultural disputes” OR “culture problems” OR “customs problems” OR “customs troubles” OR “intercultural harms” OR “cultural norms” OR “cultural barriers” OR “cultural risks”) Negative impact: (“negative impact” OR “worse results” OR “bad effect” OR “terrible outcome” OR unpleasant OR “communication problems” OR failures) Vendor(s): (vendor OR vendors OR service-provider OR dealer OR trader OR marketer OR seller OR developer OR salesperson OR retailer OR stakeholders) Results for c) IS/IT outsourcing relationships, cultural barriers in software outsourcing relationship, cultural risks, outsourcing alliance, software outsourcing co-ordination. Results for d) (“offshore software outsourcing” OR “information systems outsourcing” OR “information technology outsourcing” OR “IS outsourcing” OR “IT outsourcing” OR “CBIS outsourcing” OR “computer-based information systems outsourcing” OR “software contracting-out” OR “distributed software development” OR “multi-site software development” OR “global software development” OR “GSD” OR “offshore software development outsourcing” OR OSDO) AND (Relationships OR “teamwork” OR collaboration OR co-ordination OR alliance OR associations OR partnerships OR dealings OR contract OR interaction OR relations OR affairs) AND (“Intercultural problems” OR “intercultural disputes” OR “cultural problems” OR “customs problems” OR “customs troubles” OR “intercultural harms” OR “cultural norms” OR “cultural

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barriers” OR “cultural risks”) AND (“negative impact” OR “worse results” OR “bad effect” OR “terrible outcome” OR unpleasant OR “communication problems” OR failures) AND (Vendor OR vendors OR service-provider OR dealer OR trader OR marketer OR seller OR developer OR salesperson OR retailer OR stakeholders) Result for e) The above search strategy was used to search the relevant literature in IEEEXplore and ACM digital libraries. However no results were displayed and that is the reason that we integrated the search string by excluding the minor terms from our search strategy. The integrated search strategy, we used which worked successfully, is given below. (“offshore software outsourcing” OR “information systems outsourcing” OR “information technology outsourcing” OR “IS outsourcing” OR “IT outsourcing” OR “CBIS outsourcing” OR “computer-based information systems outsourcing” OR “software contracting-out” OR “distributed software development” OR “multi-site software development” OR “global software development” OR “GSD” OR “offshore software development outsourcing” OR OSDO) AND (Relationships OR “teamwork” OR collaboration OR co-ordination OR alliance OR associations OR partnerships OR dealings OR contract OR interaction OR relations OR affairs) AND (“Intercultural problems” OR “intercultural disputes” OR “cultural problems” OR “customs problems” OR “customs troubles” OR “intercultural harms” OR “cultural norms” OR “cultural barriers” OR “cultural risks”) 3) Search term breakup: The above search string will be used as our search term. However, there are some databases/libraries that do not allow lengthy search strings, therefore we will split the above search term into smaller substrings and will do separate search for each of these search strings. Finally we will summarize the search results by removing the redundancy. It should be noted that while using IEEEXplore digital library, the aforementioned search string will be used with a technique that it should be put in the pane, large rectangular box, instead of the small sized text-boxes provided in the advanced search of the library. The substrings for the stated research question RQ1 is given below. Each search term in research question is divided into two sub search terms. a) Search string 1 (“Offshore software outsourcing” OR “information systems outsourcing” OR “information technology outsourcing” OR “IS outsourcing” OR “IT outsourcing” OR “CBIS outsourcing”) AND (Relationships OR “teamwork” OR collaboration OR co-ordination OR alliance OR “team work”) AND (“Intercultural problems” OR “intercultural disputes” OR “culture problems”) b) Search string 2

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(“Computer-based information systems outsourcing” OR “software contracting-out” OR “distributed software development” OR “multi-site software development” OR “global software development” OR “GSD” OR “offshore software development outsourcing” OR OSDO) AND (Associations OR partnerships OR dealings OR contract OR interaction OR relations OR affairs) AND (“Customs problems” OR “customs troubles” OR “intercultural harms” OR “cultural norms” OR “cultural risks”) 4) Resources to be searched: IEEEXplore, ACM Portal, ScienceDirect, SpringerLink, CiteSeer digital library and Google scholar. 5) Search constraints and validation We are searching for all published papers related to our research question and hence do not put any date boundaries. A prior search was conducted using a set of major search terms ("Offshore software outsourcing" OR “IT outsourcing" OR “IS/IT outsourcing”) AND (“intercultural challenges” OR “cultural risks”) AND (relationships OR contract OR co-ordination OR partnerships). and we found certain relevant papers in IEEEXplore and ACM digital libraries. Prior to undertake the review process, these relevant papers will be used for the validation of our search strings. 6) Search documentation Search results will be documented properly, and the following data will be recorded properly: Name of the database, Search strategy, Search Phase, Date of search, Years covered (ALL), No. of publications found, Initial selection decision, Final selection decision Primary source references will be stored electronically in a separate directory. C. Primary selection 1) Inclusion criteria The inclusion criteria we used to determine which piece of literature (papers, technical reports, or grey literature etc.) found by the search term will be used for the data extraction. We will only consider papers related to offshore software outsourcing and written in English language. The criteria are listed below: x Studies that describe intercultural challenges/issues in offshore software development outsourcing relationships x

Studies that describe intercultural factors causing problems in offshore software outsourcing relationships

x

Studies that describe intercultural factors affecting the continuation/termination of the outsourcing relationships

2) Exclusion criteria This section describes the exclusion criteria in order to decide which piece of literature found by the search term will be excluded/ignored. The criteria are listed below:

x

Studies that is not relevant to the research question.

x

Studies that don’t describe intercultural challenges/problems in offshore software outsourcing relationships

x

Studies that don’t describe the factors that cause the intercultural problems in offshore software outsourcing relationships

x

Studies other than offshore outsourcing

3) Primary selection: Initial selection of the primary sources will be performed by reviewing the title, keywords and abstract. The purpose is to exclude/ignore only those results which have no relevance to the problem/research questions. The primary sources chosen in the initial selection process will be checked against the aforesaid inclusion/exclusion criteria by reviewing carefully through full text of the studies. The source will be sent to the secondary reviewer, for review in case of any uncertainty regarding the inclusion or exclusion decision. D. Publication quality assessment The measurement of quality is performed after final selection of publications. The quality of publications will be assessed in parallel at the time of data extraction. The quality checklist contains the following questions: x

Is it clear how intercultural challenges were measured/evaluated in offshore software outsourcing relationships?

x

Is it clear how intercultural factors causing problems between clients and vendors were identified in offshore software outsourcing relationships?

Each of the above factors will be marked as “YES͉ or “NO͉ or “Partial͉ or “N.A͉. A secondary reviewer will score a small subset for validation. E. Data extraction strategy: The review will be undertaken by a single researcher, who will be responsible for the data extraction. A secondary reviewer will be approached for guidance in case of an issue regarding the data extraction. The inter-rater reliability test will be performed once the data is extracted by the primary reviewer. The secondary reviewer will select few publications randomly from the list of publication already chosen by the primary reviewer. The secondary reviewer will independently extract data from the randomly selected publications. The results will then be compared with the results produced by the primary reviewer. F. Data synthises: The data will be synthesized by creating one summary table having the columns (S.No, Intercultural challenges, Frequency, Percentages) showing the list of all the

Intercultural challenges along with their frequencies and percentages. IV.

CONCLUSION AND FUTURE WORK

Various studies have shed light on the impact of intercultural challenges in outsourcing relationships. However, so far, no systematic literature review process has been conducted for the identification of intercultural challenges in OSDO relationships. In this paper we discussed our study plan in the form of a SLR protocol. We have developed the SLR protocol and currently we are in the process of its implementation. Our expected outcomes will be the identification of intercultural challenges faced by vendors in OSDO relationships. We will conduct an empirical study in outsourcing industry for the validation of our SLR outcomes and to find the practices for addressing these challenges. ACKNOWLEDGMENT We are grateful to Software Engineering Research Group at University of Malakand (SERG_UOM) for the review and their valuable comments in validation process of the protocol. SERG_UOM was established by Dr Siffat Ullah Khan in January, 2011. REFERENCES [1]

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