Volume 20, Number 4 Article by Thillai Rajan B December, 2008
Comparison of Software Service Providers: An Exploratory Study :
Outsourcing of software services has become the norm today and service providers will play an increasingly important role in delivering software services to organisations worldwide. Most research on this subject has focused on information technology IT outsourcing decisions and management of IT outsourcing operations. There has been very little research on software service providers. This study is an attempt to understand the challenges faced by the software service providers and their responses in addressing them. Using a case study approach, this paper provides a comparative study of a representative Indian and a European software services corporation Infosys Technologies and LogicaCMG, respectively, comparable in size and business activities. In addition to secondary sources, data obtained from interviews with the top management were used in the analysis.
The two companies were compared on a variety of parameters such as mission statements, globalisation strategy, customer relationships, cost competitiveness and leadership development. The main challenges faced by the software service providers today are achieving low costs and strengthening customer relationships. The key finding of this study is that to sustain and achieve growth, the European corporation will need to be more cost competitive. On the contrary, an Indian software services corporation will need to focus on investing in customer relationships. Many overseas firms have been building their development centres in countries like India to become more cost competitive. On the other hand, many Indian firms have been acquiring firms that have strong client relationships in an attempt to achieve customer closeness. The current strategy adopted by the software service firms in addressing the challenges are contrary to received wisdom. This study highlights the need for more research to understand the decision making process to address the key challenges faced by software services firms.
Reprint No 08404
