A Survey on the Business Relationship between Chinese Outsourcing Software Suppliers and Their Outsourcers

Abstract

The business relationship between a software outsourcer and its suppliers is gradually moving from contract relationship to partnership. The partnership type between the outsourcer and the supplier is considered as a key predictor of outsourcing success. Although several studies have investigated the practices and benefits of building partnership from an outsourcer's perspective, few of them have studied these issues from the supplier's viewpoint, especially in the context of offshore software outsourcing. Since more and more Chinese software companies are getting outsourcing subcontracts from abroad, it is important to investigate the effect of business relationship on their performance, and to identify possible enhancements. Our study has collected data by a questionnaire-based survey from 53 finished projects in 41 Chinese software suppliers. Twenty-six of our investigated suppliers claim to have contract relationship with their outsourcers and the remaining 27 think they have partnership with outsourcers. Results from our study show, however, that 1) processes and methods used by suppliers to solve conflicts with outsourcers do not follow their self-claimed contract relationships or partnership; 2) there is no significant correlations between the type of relationship and the success of outsourced projects; 3) more personnel with proper language and communication skills need to be educated in order to facilitate Chinese companies to build and maintain a proper partnership with their outsourcers.