Capability Building and Innovation in the Offshore IT Services Industry in India and China
The phenomenon of offshore IT services in India has become a key force in the global market of information technologies. China has entered the same market much later, but is quickly growing in importance, effectively learning on the earlier Indian experiences. IT services firms of India and China face several common challenges, including, among others, very high attrition rates, rising costs, over-reliance on the time & materials (T&M) revenue model, and a general lack of innovation culture along with an inadequate focus on developing their own intellectual property (IP) and IP-based products. However IT service firms of both countries managed to become really successful and powerful in the global IT service industry. IEMS experts assume they became dominant by making serious and continuing efforts to acquire and develop the knowledge, skills, and capabilities needed by their foreign clients. They also adopt innovation approaches to remain at the forefront of their industry.
This research is dedicated to the offshoring of IT services to two emerging markets with a focus on the services provided by third-party vendors there to their foreign clients. In particular, it presents in-depth information on the capability-building and innovation approaches used by third-party providers of offshore IT services in India and China. The study examines the background on the global IT Industry and the offshore IT services industry in these countries, their innovative landscape and possible future.