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IT Sourcing and Development?

Published on
27 Oct 2014

Last week I attended an insightful workshop “IT sourcing and development: New Drivers, Models and Impacts” at the University of Manchester. The idea of this workshop was to revisit IT outsourcing which has become a significant industry and employer in some countries. This particularly comes in the context of growing interest in ‘impact outsourcing’, the idea that IT outsourcing can be designed to include substantial social as well as economic goals.

Here I wanted to summarise what I saw as some of the key discussions, and what it implies for our future work on outsourcing and micro-work in sub-Saharan Africa.

New models?

???????????????There was a number of different models around impact sourcing presented. For firms such as Digital Divide Data and Datamation, models, recruitment and activities are noticeably different from conventional outsourcing industries, linked to their goals in achieving social impact amongst staff. In other cases, impact related to firms locating in demanding or rural areas as outsourcing destinations, as outlined in a number of presentations on the struggles to build an outsourcing sector in Palestine (by Paul Tjia & Nick White; Yossi Lichtenstein; and Jerry Marshall).

Clearly, impact is liable to be context sensitive, so it should be no surprise that models vary. However, this also focusses questions on what the key drivers of ‘impact’ are in impact outsourcing, and what the best way for firms to identify themselves as ‘impact firms’.

In this respect Andy Haxby’s work on ‘Fair Trade Software’ was one interesting attempt that could allow firms to embed social goal as a brand. There was also discussion around how other standards bodies might be able to assess and signify socially impactful firms. Finally, leading firms are forming communities of practice, which will likely to be vital in identifying and supporting firms undertaking best practices in this emerging sector.

New impacts?

Of course this still leaves the vexed question as to what are the key ‘impacts’ these new models bring.

As Fareesa Malik and Sandeep MS outlined in rural outsourcing case studies from Pakistan and India respectively, employment and economic gain can be important in rural locations. But, consideration needs also be made into how firms integrate within local cultural norms and activities. For example, where firms are not incompatible with family requirements this can limit their viability. Modern IT firms in rural settings can also lead to suspicion and integrating into rural activities and practices is also crucial.

There were also questions as to what the ultimate goal of working in IT outsourcing should be. This was emphasised for example by Michael Chertok discussing Digital Divide Data’s structure for employees. Working in this firm is seen as part of a long-term training program, where staff will eventually graduate to continue their careers elsewhere.

As Nobuhiro Takahashi’s presentation on Japanese firms outsourcing IT work to China showed, there are also macro-level implications to IT Sourcing. When working well, technology use and learning in outsourcing can transform practices, not just of the individuals trained but also the outlook of a sector. Such elements of ‘impact’ are currently less considered which look at supporting technology diffusion and best practice.

New directions?

This work has implications on our upcoming research on outsourcing in sub-Saharan Africa (which Mark has outlined in a previous post).

It should be noted that case studies from the workshop were strongly skewed towards the Asian context, with less analysis of cases in sub-Saharan Africa, so it is important to examine the potentials and limitations around such regions more closely. (For instance our research examining the BPO policies in Rwanda and Kenya suggests that it has been a struggle for firms to even establish outsourcing partnerships in these lesser known BPO destinations).

The workshop particularly highlighted the importance to maintain a critical perspective on IT outsourcing activities that claim to be impactful, and to remember that there are many dimensions by which one might consider impact – not only in terms of economics, but also micro-level social and macro-level sector outcomes.

The workshop also pointed towards emerging research areas which we think will be particularly relevant for our work in sub-Saharan Africa. Niels Beerepoot interesting research on online microwork platforms and their use in the Philippines opens up questions around new forms of outsourcing. Online platforms have potential in less established outsourcing destinations through the ability to offer online work more flexibly and based on individual skills and reputation. Yet, as Niels showed they also suggest a potential individualisation of outsourcing and a ‘race to the bottom’ as many people complete for increasingly low value work.

There are also policy elements that could further be examined, given that several African nations have spent much time promoting BPO with less sucessful outcomes than anticipated. Camilla Bellini’s presentation empirically analysing one of ATKearney’s reports on best practices for attracting outsourcing, highlights that there are still research to be done on understanding how countries best encourage growth of their IT outsourcing sectors.