Routinizing the offshore choice: Applying diffusion of innovation to the case of EDS

Erran Carmel, Jason Dedrick, Kenneth L. Kraemer

Research output: Contribution to journalArticle

10 Scopus citations

Abstract

Purpose We treat offshoring as a managerial innovation. Should it still be considered an innovation? The purpose of this paper is to use innovation theory, especially, Rogers' diffusion of innovation theory (DOI) to examine this question. Design/methodology/approach The paper examines the case of electronic data systems (EDS), a very large Information Technology Professional Services (ITPS) company, using a case study approach based on interviews, internal documents and secondary sources. Findings At EDS it was found that offshoring has been fully assimilated within just a few years. During the early 2000s, EDS faced the challenge of a largescale shift in the competitive landscape and moved a large share of its global operations to offshore locations. The paper shows how this innovation has been diffused within the firm through the creation of an assessment and migration organization that has institutionalized and routinized the process of offshoring. At EDS, each client project goes through a centralized offshoring assessment process to determine where best to send the work and how to perform the knowledge transfer quickly and effectively. Observations are made about the speed of diffusion: about 710 years in this case, from initial innovation agenda setting to its routinization. Research limitations/implications This paper filled a gap in studying managerial innovation; made some estimates of the speed of diffusion; and applied the hypothesized stages of innovation diffusion to the context of offshore software services. The limitation is that this is a case study and therefore generalization may be qualified. Originality/value This paper is among the first that studies offshoring (as opposed to outsourcing) in terms of DOI theory.

Original languageEnglish (US)
Pages (from-to)223-239
Number of pages17
JournalStrategic Outsourcing
Volume2
Issue number3
DOIs
StatePublished - Nov 20 2009

Keywords

  • Communication technologies
  • Diffusion
  • Globalization
  • Innovation
  • Professional services

ASJC Scopus subject areas

  • Management Science and Operations Research

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