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Tandem of GlobShop and ISS - Globalization of Software Development - Case Study Example

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This paper “Tandem of GlobShop and ISS - Globalization of Software Development” analyzes prospects of cooperation of the US and Indian software companies, its possible benefits, taking into account cultural differences, personal or remote communication between employees and customers…
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Tandem of GlobShop and ISS - Globalization of Software Development
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Download file to see previous pages The untoward event of September 11, 2001, had an adverse impact on the performance of the GlobShop company. Hence, in order to prevent any further undesirable impact of the event, the company engaged in devising a set of measures directed towards cost-reduction, including outsourcing a substantial portion of its IT function.
Notably, GlobShop has offshored many of activities to a developing country namely India. It has been outsourcing IT functions to an Indian partner Indo-Systems Solutions (ISS) and has outsourced many of its functions such as application development and other related support for the company’s IT infrastructure and maintenance of merchandising and retail system. GlobShop is near the end of its 3 years contract with ISS which has created a greater requirement for Chief Information Officer (CIO) to make vibrant decisions about ‘continuing offshore outsourcing’ and ‘extending the contract.’ In the backdrop of this, the essay intends to critically evaluate GlobShop’s management of outsourcing to date using appropriate concepts from the outsourcing literature. Based on these evaluations, recommendations for GlobShop's management actions along with the rationale to the recommended management action(s) for GlobShop will be duly provided.
Prior to the selection of vendor namely ISS in India, the GlobShop team responsible for selecting the ideal location and vendor mainly assessed China, India, Eastern Europe, and Canada in order to determine the viable option for it to outsource its IT function. During the process of assessing, the potential destination and vendors the team assigned for assessing the alternative choice visited some Indian firms providing outsourcing services encompassing tier 1 vendors such as Wipro, Infosys, and other small vendors. Finally, the company decided to outsource its IT function to ISS. During the period, ISS was a medium-sized company but was growing rapidly (Kern & et. al., 2002; Ranganathan & et. al., 2007). 
GlobShop after assessing the different alternatives chose to outsource its IT function to Indian venture i.e. ISS portraying the most viable ground for its development. The rationale behind the decision to work with ISS was the presence of the company in the United States (USA) as well as in India. Besides, GlobShop decided not to outsource to tier1 vendors due to the reason that these companies might not place adequate attention to its needs due to their increased operation and association with other large companies. At the initial stage, the company outsourced only a small portion to the vendor firm in order to minimize any possible risks and evaluate the benefit from outsourcing. Later on, satisfied with the performance of ISS, the company extended its agreement with ISS. An aggressive offshore strategy executed by GlobShop was associated with a significant portion of reductions is its IT workforce. The decision of the company to lay off employees had a considerable emotional impact. It was quite hard for the company to determine the number of employees to be retrenched. Besides, employee downsizing was challenging for the company as it had to transfer knowledge borne by the laid-off workers to other staff and the outsourcing partner. The company was significantly worried about the views held by employees, stakeholders and the community in which it operated. The radical disagreement was witnessed between the stakeholders regarding the decision of lay-off. In this regard, some managers proposed lay-off to be executed in phases while others opposed this idea stating that it will create uncertainties amid the existing employees. In order to deal with the challenges of downsizing, the company decided to frame package for the employees affected with its decision to lay-off. Moreover, the severance pay structure was initiated. ...Download file to see next pagesRead More
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