7341826

Offshore Outsourcing: Software Development Employee’s Perspective
of Outsourcing
Anil V. Mathias
University College University of Denver
MOTM 4901 Capstone
Aug 18, 2006
___________________________
Prof. Marshall Costantino
Capstone Advisor
___________________________
Jason Wyrick
Academic Director of Masters of Technology Management
Upon the recommendation of the Department
___________________________
James R. Davis
Dean
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Abstract
The boom of the Information Technology started in the 1990’s,
and it went all the way until the year 2000. Once the recession hit in
the year 2001, all IT companies began to cut costs to reduce
expenses. As a cost cutting measure, offshore outsourcing was a
effective alternative for tapping into the low cost labor market of other
countries. As a result, jobs were lost both to recession and offshore
outsourcing. Different people have different perspectives on offshore
outsourcing.
This paper studies the perspectives of software development
employee’s (non-Oracle employees) on offshore outsourcing by using
an anonymous survey. The survey focuses on the areas of job, quality,
economy, and risk. The result was divided into different groups by
country of origin, level experience, education level (graduate, under
graduate etc), and major in school to find out which questions are
important for each group and how they rank it.

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TABLE OF CONTENTS
INTRODUCTION ............................................................................................. 1
PROBLEM STATEMENT AND RESEARCH QUESTION.............................................. 8
REVIEW OF LITERATURE ................................................................................. 9
RESEARCH DESIGN .......................................................................................14
QUESTIONNAIRE DESIGN ..............................................................................16
QUESTIONNAIRE ADMINISTRATION/IMPLEMENTATION ......................................19
RESULT .......................................................................................................24
CONCLUSION ...............................................................................................58
FUTURE RESEARCH .......................................................................................61
BIBLIOGRAPHY .............................................................................................64
APPENDIX 1: QUESTIONNAIRE .......................................................................67
APPENDIX 2: RANK .......................................................................................69
APPENDIX 3: ALL RESPONDENT ......................................................................75
APPENDIX 4: ASIAN INDIAN RESPONDENT .......................................................76
APPENDIX 5: NON-ASIAN INDIAN RESPONDENT................................................77
APPENDIX 6: LESS EXPERIENCE RESPONDENT..................................................78
APPENDIX 7: MORE EXPERIENCE RESPONDENT.................................................79
APPENDIX 8: UNDER-GRADUATE RESPONDENT .................................................80
APPENDIX 9: GRADUATE RESPONDENT ............................................................82
APPENDIX 10: COMPUTER RESPONDENT ..........................................................83
APPENDIX 11: TECHNICAL OR NON-TECHNICAL RESPONDENT ............................84

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Introduction
This author has worked in the software industry for almost 13 years,
and he has seen the boom in the Information Technology industry in the
1990’s, and then in the early 2000 saw offshore outsourcing as the way to
do business. To reduce cost, everything from customer service to software
development seemed to be outsourced. As a cost cutting measure, many
employees belonging to different companies saw their job being shipped
offshore. This brought many hardships to employees in the United States. In
addition to losing jobs, valuable knowledge was lost resulting in brain drain.
To add insult to the injury, U.S. employees were not only losing their jobs,
they were losing their jobs after they trained their offshore counterparts.
(Dobbs 2004). This study focuses on the software development employee’s
perspective of offshore outsourcing.
Outsourcing was seen as a threat during the manufacturing
outsourcing era, but nothing stopped it. This was part of globalization of the
economy and of free trade. Companies manufactured goods cheaply so that
they could be competitive and be able to provide less expensive products to
customers. Companies focused on importing goods from cheap labor market,
which causes the trade deficit to grow year after year. (Bardhan et al.
2004). Hayes et al. (2005) assert that America which was once the leader in
manufacturing, lost market share to foreign imports, causing the US trade

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deficit to soar. Within a few years the Unites States went from being the
world’s biggest creditor nation to being its biggest debtor.
The Internet age has made software development outsourcing to
offshore locations easier, and countries such as India are benefiting from it.
India’s software export has increased five folds since 1996 to $7.8 billion out
of which 62% is exported to United States. This exports accounts to almost
80% of the growth. (Bardhan et al. 2004).
Everybody likes a good deal, for example buy one get one free. What
about buy one get five free? This is what is happens with offshore
outsourcing. Labor cost in India is a fifth of the cost of the labor market in
the United States. (Hira and Hira 2005). This cost savings has attracted so
much foreign investment in India that it is not only the IT companies that
are making use of this but also other companies such as business and
financial, legal, medical, et cetera. (Hira and Hira 2005). Table 1 below,
gives more of those numbers and some projections.
Profession 2003 By 2005 By 2010 By 2015

Art, Design 2,500 8,000 15,000 30,000
Architecture 14,000 46,000 93,000 191,000
Business 30,000 91,000 176,000 356,000
Computer 102,000 181,000 322,000 542,000
Legal 6,000 20,000 39,000 79,000
Life Science 300 4,000 16,000 39,000
Management 3,500 34,000 106,000 259,000
Office 146,000 410,000 815,000 1,600,000
Sales 11,000 38,000 97,000 218,000
Total 315,300 832,000 1,679,000 3,314,000
Table 1: Projected number of U.S. jobs to be moved offshore, by

profession. (Hira and Hira 2005)
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Large U.S. companies often lobby for offshore outsourcing, and they
use good statistics to prove their point, whereas there is no representation
for the employees who have lost their jobs. (Dobbs 2004). Kobayashi
(2005) finds that NASSCOM – the Indian National Association of Software
and Service Companies represents 95% of the outsourcing vendors in India.
McKinsey Company has a good relationship with NASSCOM, and McKinsey
publishes a report on which companies and politicians around the world
heavily rely. This report portrays how outsourcing is a win-win game.
Buchholz (2004) blames legal, tax, education, and immigration policies as
the reasons for offshore outsourcing, and Buchholz thinks that those issues
need to be reworked in order to attract the jobs back home. Dobbs (2004)
finds that the healthcare industry is getting so expensive that some
radiology work is also shipped to India to be done overnight (United States)
which is daytime in India for almost tenth of the cost. This makes
outsourcing more efficient and work is being done 24 hours a day. Consider
a hypothetical situation where efficiency can soon be a problem. For
example, US counterparts assign’s a job to offshore development to be done
during the night so that it is available when the US counterpart comes in the
next day, (since its day time in India). Offshore development ignores the job
or does not realize the urgency of the job and the job is not available the
next day. This causes delay in performing the job. So, instead of becoming
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more efficient, it causes delay. If this trend continues then this may cause
reverse Outsourcing or so called In-sourcing.
Gold (2005) shows a list of 20 India based and 10 US based offshore
firms dated July 2002. This is after the 9/11 terrorist attack that took place
in the United States. One would assume that if there was a reduction in
offshore outsourcing, this was the time, but it didn’t change anything.
Top 20 India based Vendors Top 10 US based firms exporting

software to U.S.
1 TCS IBM (prior to merger with PWC)
2 Infosys Cognizant
3 Wipro Oracle
4 Satyam Hughes
5 HCL Technologies Hewlett Packard
6 Patni Computer Systems Digital Globalsoft
7 Silverline Syntel
8 Mehindra British Telecom Covansys
9 Pentasoft PWC (prior to merger with IBM)
10 HCL Perot Systems Orbitech
11 Mascot
12 NIIT
13 iFlex
14 Mphasis
15 Mascon
16 Mastek
17 Birlasoft
18 Polaris
19 LTIT
20 Hexaware
Table 2: Top 20 India based and 10 US based Offshore firms, July 2002.
(Gold 2005)
Hira and Hira (2005) find that IT professionals are denied government
assistance of job training and extended unemployment assistance because
the US Labor department does not consider software a product. Some IT

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professionals try to identify jobs that are safe and then specialize in them,
others try to retrain into a different profession.
It is not just the United States that is taking advantage of offshore
outsourcing, even Europe wants to be part of it. Companies definitely need
to take advantage of the low labor cost in order to survive and be profitable.
If companies do not make use of the cheap labor cost, then they will end up
spending more money thus reducing profit. GE’s former CEO Jack Welch had
introduced a 70-70-70 rule for GE, which is 70% of GE’s work should be
Outsourced, out of which 70% would be done by Offshore development and
out of which 70% would be done in India, which ends up India with 30% of
GE’s work. (Gold 2005).
Dobbs (2004) argues that quality is at risk by indulging in offshore
outsourcing which resulted in Dell’s recent moving back corporate support to
United States. Patel and Aran (2005) support this finding saying that quality
is at risk, and they also claim that India is developing its level 5 Capability
Maturity Model (CMM) for software development. Dobbs (2004) predicts that
in the future the United States will no longer be the source of innovation in
the world economy because of lost talent to offshore outsourcing.
Due to booming outsourcing, the software industry is attracting more
talent in India. Not only are the people educated in software industry
working in the software industry but also people from different career paths
are joining the workforce. Kobayashi (2005) finds that people are changing
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professions in India to be in the software industry. This is similar to the
boom in the 1990’s in the United States where most professionals from
industry other than software industry quit their profession and joined the
software industry.
In general if the unemployment rate is low, this means that people
who want to work are working and people who do not want to work are also
working. This means quality will suffer since part of the workforce is working
who do not want to work. It is the same case in India, everybody finds a
jobs in the software sector very easily because of the booming IT market
which causes the quality to suffer.
Some political pressure forced the State of Indiana to cancel its $23
million offshore contract with Tata Consulting Services (TCS) in November
2003. (Patel and Aran 2005). There was too much media attention to this as
the tax payer’s dollars were used to employ non US workers by offshore
outsourcing rather than using US workers.
When the Japanese invaded the American market with its cheap
automobiles by developing products in their own country, the big three
American auto makers quickly lobbied against it and President Reagan’s
administration quickly took decisive action on trade. But when US multi-
nationals use cheap labor from other countries to sell products in the United
States, then the government supports it saying it benefits the country in the
long run. (Dobbs 2004).

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Outsourcing has existed for a long time. When companies want to buy
something, they usually think whether it is easy and cheap to make or
whether it is easy and cheap to buy. Consider a hypothetical situation where
an individual wants to clean his/her house. The individual can either clean
the house himself/herself or have someone do it for him/her. Will it be wise
to take time off from work and clean the house himself/herself or have
someone else do it? The individual should have the expertise to clean the
house and should also find out whether cleaning the house himself/herself
will be cheaper. (Hira and Hira 2005)
This make or buy concept has gone so far that the whole world seems
to be a small city by itself. Globalization of the economy has brought the
world together. Companies now think of themselves as a whole world by
establishing offices in almost every part of the world. So, it is not just
outsourcing to different firms in the same country, but outsourcing to
different firms in different part of the world.
After the recession hit the United States in the year 2001, companies
started to do offshore outsourcing of computer related jobs, especially to
India. This is not necessarily because the resources in the United States
cannot do the job or they lack the expertise, but because of cheap labor.
Companies from every scale (big and small) want to make use of the cheap
labor by offshore outsourcing.

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Offshore outsourcing has many effects. Such as, employees in the
United States losing their job, training of offshore counterpart with job
responsibilities, possibility of brain drain in the United States because of job
loss. Productivity and quality can be an issue. Graduating students may find
it difficult to find jobs in the software industry in the United States. Jobs in
the United States may become more specialized in software industry.
Outsourcing definitely has an effect on the economy of the country.
Problem Statement and Research Question
To understand what software development employees think about
offshore outsourcing was more of an interest to this author. This author used
a survey as an instrument to determine the perspective of software
development employees with regard to offshore outsourcing. This study will
explore what IT employees think in general about outsourcing:
1. How has outsourcing of software development affected their jobs?
2. What do software development employees think about productivity
and quality as a result of outsourcing?
3. Do software development employees think outsourcing helps
companies that are outsourcing or whether it’s a risk?
4. Do software development employees think outsourcing help the
economy of the United States?
5. Do software development employees think outsourcing helps create
new jobs in the United States?

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6. Do software development employees think new graduating students
will find jobs in the software development area after graduation?
7. Do software development employees think customers who buy the
software product are affected by outsourcing?
Review of Literature
Offshore outsourcing started in the year 2000 immediately after the
tech market bust, and offshore outsourcing is going strong and almost every
industry want to make use of offshore outsourcing. This has created an
economic boom in the country such as India. Most of the middle class
population of India is taking advantage of outsourcing and this causes the
American middle class to suffer. Offshore outsourcing helps multi-nationals
become more competitive by reducing cost and use the savings for other
innovative projects back home.
It is believed that companies should do what they do best and
outsource the rest. This helps company free its resources to work in their
main area of business. Companies can save cost, have increased flexibility,
better access to technology, more time for business issues, and have better
competence (Butler 2000). Is this true anymore? Not necessarily, for
example, a software development company’s business is software
development so the company should offshore its administration, office
management, HR, etc and keep its core business which is software
development back home. But, in reality software development companies do

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outsource software development offshore, which is their core business. This
is to make use of the cheap resources available in countries like India.
Williams (1998) suggests outsourcing jobs related to telecommunication,
data center operations, applications development, help desk, training,
hardware support, and software support. Hillmer and Quinn (1995)
recommends to concentrate the firms own resources on a set of core
competencies and strategically outsource other activities, including many
traditionally considered integral to any company. Wexler (2005) suggests
having a good balance of in-house and outsourced IT expertise.
Companies use BPO (Business Process Outsourcing) as a tool to save
cost and increase profits. Now they consider what to outsource rather than
whether to outsource or not. (Patel and Aran 2005).
There are different types of outsourcing as shown by Kobayshi (2005).
Tactical Outsourcing – This is done when in-house services cannot
immediately deliver the services needed causing in Outsourcing. This is a
blend of in-house and outsources working together.
Strategic Outsourcing – This is one step ahead of Tactical Outsourcing. Here
the management decides on the overall big picture on whether to outsource
or not and to consider what it does best and how.
Transformational Outsourcing – This goes beyond Strategic Outsourcing.
Transformational Outsourcing is done when a company might want to start

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all over again. If a company is spun off or a new product is introduced then
transformational outsourcing is a good alternative.
Business Process Outsourcing – This is the most used Outsourcing model
right now. Here an entire function, including computer systems, corporate
assets and employees, are transferred to a business service provider where
a service does not require physical presence.
A decade ago, companies were lobbying to increase the limit of H1B
visas, which can get cheap resources back home and have them work here
in United States. But as the Visa limit on H1B started to decrease after the
recession in 2001 and companies still had the need for such resources, they
decided to go where the resources were. The 9/11 terrorist attack has also
contributed to this as the government had put more restriction on
immigration procedures.
As more and more companies indulge in offshore outsourcing they
create virtual workplaces for the employees offshore. Cooper and Burke
(2002) finds that virtual workplaces have some disadvantages such as setup
and maintenance cost, loss of cost efficiencies, cultural issues, feelings of
isolation, and lack of trust.
When outsourcing offshore, companies should consider different
aspects such as: cost consideration, quantity and quality, education and
language skills, cultural compatibility, infrastructure, and political stability.

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(Patel and Aran 2005). Patel and Aran (2005) finds offshore outsourcing
countries in different continents.
Asia – India, China, Malaysia, Philippines, Singapore, Thailand, Vietnam,
Australia, and New Zealand.
Europe – Ireland, Poland, Russia, Czech Republic, Portugal, and Spain.
Americas – Canada, Brazil, Argentina, Costa Rica, and Chile.
Countries like India produce more Engineers every year compared to
the United States. This helps find the talent needed to do the required job.
Table 3 shows the number of graduates getting graduated every year in
different countries. The percentage of under graduates that graduate from
United States is among the last two places. This is significantly less as
United States is the most developed country in the world and world’s richest
country.
Total Percentage of
Country No of Graduates Population Graduate
China 195,354 1,300 Mil(2005) 0.02
India 129,000 1,100 Mil(2005) 0.01
Japan 103,440 127 Mil(2005) 0.08
Russia 82,409 141 Mil(2005) 0.06
US 60,914 298 Mil(2006) 0.02
South Korea 45,145 48 Mil(2005) 0.09
Table 3: Undergraduate degree in engineering awarded annually

Hira(2005)
Total Population BBC(2006)
Although the percentage of under graduate that graduates in India is
the lowest still it is a big number compare to the number of under

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graduates. With over 100,000 graduates every year, there are a lot of
people ready to work at a fifth of the cost of an American counterpart. Does
that mean that every company that is outsourcing gets the resources they
need? May be, may be not.
Kobayahsi (2005) finds that there are more than 250 Universities and
over 900 colleges in India which creates more knowledgeable workforce.
Every year 2.1 million graduates and 0.3 million postgraduates from college
are ready to work. Almost 8% of this population in India is estimated to
leave the country, which still leaves a lot of people for work. This shows that
the human resources are abundant.
US companies are taxed heavily and so are the employees, and this
result in the income to be higher than other nations (Buchholz 2004). There
are a lot of people dependent on the free services like social services and
Medicare provided by the government which increases the cost even more.
Cooper and Burke (2002) discovers some negative effects of
outsourcing such as decreased internal networking, decreased probability of
obtaining a return on knowledge, lower investments in training and
development, and perception of untrustworthiness. They also find some
positive effects such as increased efficiency and employee productivity,
better use of human resources, increased company flexibility, adaptation to
technological changes and access to new skills, concentration on core

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competencies, faster development of new products and services and new
ventures.
Some might think that outsourcing increases performance while other
will think the opposite. Gilley and Rasheed’s (2000) article finds that there is
no direct effect of outsourcing on firm’s performance. Drezner (2004) finds
that there has been moderate growth and astonishing productivity gains due
to outsourcing.
Research Design
This author wanted to find what software development employees
think about offshore outsourcing. The questionnaire was designed to
understand different perspective about outsourcing. The questionnaire is
qualitative in nature, but used quantitative analysis to analyze the data. This
is not a study of one process or one person’s approach to the issue. This
survey involves use of Likert scale and multiple choice questions and some
open ended questions.
The respondent was divided into different groups based on country of
origin, experience, level of education and major in school. This was done to
understand what questions are important to different sub-groups. The data
used here is nominal, ordinal, and interval. Kendall’s coefficient of
concordance was used in the analysis to find the rank of importance of
question for different sub-groups as well as for the overall respondents.
Cross count that provides histograms and distribution was used to compare
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the data. Each sub-group was compared with its counterpart to find out
which questions are common among them and how much they agree to the
questions.
All Respondents – This group represents the overall pooled sample of
respondents. This group represents the overall result of the survey.
Asian Indian versus Non-Asian Indian – This sub-group represents
respondents belonging to India and country other than Indian. This sub-
groups objective was to find out how Asian Indians responded to the survey
compared to Non-Asian Indian.
Less than equal to 10 years in the industry versus greater than 10 years in
the industry - This sub-group represents respondents with experience level.
This sub-groups objective was to find out how respondents with less than
equal to 10 years of experience in the industry responded to the survey
compared to respondents with greater than 10 years experience in the
industry.
High School + Baccalaureate versus Graduate + PhD - This sub-group
represents respondents based on education level. This sub-groups objective
was to find out how respondents with high school + baccalaureate
responded to the survey compared to respondents with graduate + PhD.
Computer versus Technical/Non-Technical Major – This sub-group represents
respondents based on major in school. This sub-groups objective was to find
out how respondents with computer as a major in school responded to the

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survey compared to respondents with technical/non-technical as a major in
school.
Questionnaire Design
This author prepared a questionnaire for the survey during his
capstone proposal class in spring of 2006. The survey focuses on jobs,
quality, economy, and risk. The survey is qualitative in nature. This author
used the Likert scale to rank the response where 5 – Strongly Agree, 4 –
Agree, 3 – No opinion, 2- Disagree, and 1 – Strongly Disagree. Likert scale
will help in the analysis of the responses. The questions were divided into
two sections, one was about offshore outsourcing and the other was
personal question about the respondent. This author personally tried filling
out the responses to find out how much time it takes to fill out the survey.
This author filled the survey three times and came with an average of 4.5
minutes. What this author didn’t do was give the survey to colleagues to see
how much time it took them. Since the author was familiar with the survey,
he was faster than the person filling the survey for the first time was. In the
survey the author noted that the survey might take somewhere between 5-
10 minutes of their time.
The survey had a total of 18 questions for offshore outsourcing and 5
personal questions about the participant’s profession and background. The
survey included questions based on job, quality, economy, and perceived
risk. Please refer to Appendix 1 for the questionnaire.

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Questions 1 to 5 concentrated on job focusing on job loss, on new
jobs, on training for employees, on career path for employees, and on
learning new skills for employees to protect their future.
Question 6, 7, and 8 concentrates on productivity, on quality, and on
cost. This is to find out whether there is a perceived productivity gain due to
outsourcing or is it just a perceived cost savings measure. Question 7 will
help find whether quality is improving or whether it is getting bad due to
outsourcing.
Question 9 and 10 focuses on the customer perception. This is to find
out whether companies are better able to serve customer due to outsourcing
and whether companies produce new products or are able to keep the
innovation going due to outsourcing.
Question 11 is to find out whether graduating students find job after
graduating in the software industry. With this question the author will be
able to find out what the respondent’s think about job opportunities for new
graduating students in the software industry.
Question 12 is to analyze if the perception is that the economy of the
country improves due to outsourcing. Question 13 is meant to see if offshore
outsourcing hurts the economy of the country, then should the Government
act as protectionist and pass laws that will prevent outsourcing. Question 14
is meant to see if the government is turning a blind eye to this whole
offshore outsourcing and using outsourcing for their own advantage.

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Question 15 is meant to find whether Outsourcing reduces cost of the
product and customers are able to find software products cheaper. Question
16 is meant to find out whether companies take risk by outsourcing.
Question 17 and 18 are meant to find out whether the perception is that
companies whose business is not software development uses offshore
outsourcing, e.g. manufacturing company which has a large IT department
uses offshore outsourcing for their software development department or
whether companies whose business is software development uses offshore
outsourcing.
Next set of question targets the respondent’s personal information.
This will help to find out some background information about the
participants, like, how long they have worked in the software industry, what
is their major and their age.
While working towards the capstone proposal class this author made a
list of participants and divided them into two groups, Asian Indian and Non-
Asian Indian. This was to find out the responses of Asian Indian since India
is the country where most of the offshore outsourcing is taking place. These
Asian Indians have come to the United States either to go to college or to
work using the H1B visa and are still working here in the United States. The
author had 37 Asian Indians and 35 Non-Asian Indians listed which made
the total participants to be about 72. These participants were the people the
author knew through acquaintance. The minimum needed for a valid survey
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response was 25 – 30 participants. Age was asked as an indirect question by
letting the respondent answer the age question as a range, in this way the
respondent would be comfortable giving the answer. The participants had
multiple choice questions that divided the age as six different choices. First
choice was from 20 – 25 years of age, then 26 – 30, then 31 – 35, then 36 –
40, then 41 - 45 and last choice was greater than 45 years of age. The next
personal question was years worked in the software industry. This was to
find out the opinion of different people having different years of experience.
The next personal question was their level of education to find out who
works in the software industry and what is their opinion? The final personal
question was their major in the school. This was to find out the respondent’s
background in education, whether they had done major in computer or any
other field and what is their opinion?
The sample participants that were used may be biased as the author
had acquaintances with the participants. Although the author had asked the
participants to forward this questionnaire to anybody working in the software
development industry (Non-Oracle Employee), the majority of the
respondents had acquaintance with the author. The survey result cannot be
generalized because of this bias.
Questionnaire Administration/Implementation
This author thought of using email as medium to send the survey out
to the participants. The author had collected a list of email addresses of the
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people he knew in his personal email account. But this does not necessarily
mean that all the emails that the author had were most current and the
survey would reach them.
US postal mail was out of question as the author was doing his
capstone project in the summer quarter immediately after the proposal
quarter was over. Response time frame would have been too long to
complete this project during the quarter.
Due to the time crunch and the hassles of US mailing service, the
author decided to go with email as a means of sending the survey out. The
author sent out the survey one week before the summer quarter 2006
started and asked the participants to respond within a week. The author also
requested the participants to forward the email to any software professionals
they know, which will add to the participant’s list and will make the survey
more realistic.
After a week the author received about 20 responses from non-Asian
Indians and 10 responses from Asian Indians. The author then started to
make phone calls to Asian Indians as he had their personal information and
they were people he knew over the years. The author was hoping to have an
equal number of Asian Indians as well as non- Asian Indians. The author
started getting more responses after the phone call and email reminder. The
author got 10 more late responses for the survey, which totaled the tally of
Indians to 17 and non-Indians to 23 with a total of 40 responses. Out of

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these 40 responses there were 10 participants whom the author did not
know and they volunteered to participate.
This author rang up only Asian Indians and no non-Asian Indians and
this may have caused a bias in the response. The author rang up 8 Asian
Indians and only half of them responded to the call.
Letter “R” was used to identify the responses that were received
without the reminder and the late responses were identified with the letter
“L”. So, the non-late respondents were from R1 to R30 (30) and late
respondents were from L31 to L40 (10). All the responses were entered into
a Microsoft Excel spreadsheet for analysis. Since the late respondent’s size
was only 10, there was no late respondent versus early responded
comparison made.
The responses to questions related to outsourcing were entered as is
based on the Likert scale. Coding was used to mark responses for the
demographic personal question. Appendix 1, Figure 2 show how the coding
is used. The responses for question of country of origin are coded as 1 for
Asian Indian and 2 for Non-Asian Indian. The responses for question of age
in years are coded as 1 for 20 – 25 years, 2 for 26 – 30 years, 3 for 31 – 35
years, 4 for 36 – 40 years, 5 for 41 – 45 years, and 6 for ages greater than
45 years. The responses for question of experience are coded as 1 for 1 – 10
years and 2 for greater than 10 years. The responses for questions of level
of education are coded as 1 for high school and undergraduate and 2 for
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graduate and PhD. The responses for questions of major in school are coded
as 1 for computer related field and 2 for technical and non-technical.
The responses were analyzed all pooled together, and then sub-groups
were compared. The questions were ranked using Kendall’s Coefficient of
Concordance from the Statistica software. The questions were ranked for all
the three splits to find out which questions were the most important to the
participant sub-groups. For overall result see Appendix 2, Figure 1.
The first sub-group comparison was Asian-Indian versus Non-Asian
Indian sub-groups. This was to determine if respondents of different national
origin had different perspective. See Appendix 2, Figure 2 for more
information.
The second sub-group comparison was for the responses based on
years worked in the software industry. One category was years worked from
1 to 10 years and the other was greater than equal to 11 years. The
questions were ranked for these two categories to find out which questions
were the most important to the participants based on years of experience.
See Appendix 2, Figure 3 for more information.
The third sub-group comparison was for the responses based on
education level. One category was for respondents who had done High
school and Under Graduate and the other was for Graduate and PhD. The
Mathias - 23
were the most important to the participants based on education level. See
Appendix 2, Figure 4 for more information.
The fourth sub-group comparison was for the responses based on
major in school. One category was for respondents who had computer
related major and the other was for technical and non technical major. The
were the most important to the participants based on school major. See
Appendix 2, Figure 5 for more information.
Appendix 2, Figure 6 shows a summary of the top 10 rank of questions
based on different groups such as overall pooled, Asian Indian, Non-Asian
Indian, less than equal to 10 years of experience, greater than 10 years of
experience, high school + undergraduate, graduate + PhD, computer major,
and technical and non-technical major.

Mathias - 24
Results
This author used Kendall’s Coefficient of Concordance to determine the
extent of agreement in the participant response patterns and the importance
rank of the different questions based on different groups. Table 4 below
gives the importance rank of questions for different groups.
Technical
<= 10 High + Non-
Non- Years > 10 Years School + Graduate Computer Tech
Pooled Indian Indian Experience Experience UnderGrad + PhD Major Major
Rank Rank Rank Rank Rank Rank Rank Rank Rank
QUES18 1 2 4 1 2 6 1 1 1
QUES1 2 5 3 4 2 4 2
QUES17 3 6 1 4 3 4 3
QUES16 4 3 2 3 6 4
QUES5 5 3 4 5 5 2
QUES4 3 2 3
QUES7 1 1
QUES8 1
QUES14 7
QUES6 2
Table 4: Top rank based on different group
The pooled rank or all respondents rank is the rank for all respondents
which in this case were forty respondents. The pooled rank was divided into
different sub-groups based on country of origin, experience, education level,
and major in school. The group with country of origin was Asian Indian and
Non-Asian Indian. Asian Indian sample size was 17 and Non-Asian Indian
sample size was 23 (See Appendix 2, Figure 2). The group with experience
level was one with less than or equal to ten years of experience and the
other with more than ten years of experience. The number of respondents
with less than equal to ten years of experience was 22 where as respondents
Mathias - 25
with more than ten years of experience was 18 (See Appendix 2, Figure 3).
The group with education level was one with high school or undergraduate
and the other with graduate or PhD. The number of respondents with high
school or undergraduate degree was 16 where as graduate or PhD was 24
(See Appendix 2, Figure 4). The last group was based on major in school.
One group was with computer related major and other was technical and
non technical major. The number of respondents with computer related
major was 24 and the other with technical or non technical major was 16
including one blank response (See Appendix 2, Figure 5).
All Respondents Group
Based on Kendall’s Coefficient of Concordance output there is big
difference between question 18 and question 1 with respect to rank sum.
After that another big difference is between question 5 and question 4.
Outsourcing Questions Rank
18. Companies whose business is Software Development uses 1

Outsourcing
1. There is job loss due to outsourcing 2
17. Companies whose business is not software development uses 3

Outsourcing
16. Companies take risk by outsourcing 4
5. Employees learn new skills to protect their future 5
Table 5: All respondents question rank

Mathias - 26
For all respondents the top 5 questions are ranked as question 18,
question 1, question 17, question 16, and question 5 as shown in table 5.
The percentage of agreement for this rank is 12.8% based on Kendall’s
coefficient of Concordance. That is, the response pattern matched exactly on
12.8% of the respondents, a small minority.
First most important question to all respondents is question 18.
Appendix 3, Figure 1 shows all respondents response to question 18. 40% of
the respondents agree that companies whose business is software
development uses outsourcing and 38% strongly agree. So, a total of 78%
of the respondents agree to question 18. There is however 5% of the
respondents who strongly do not agree that companies whose business is
software development uses outsourcing and 8% disagree, leaving 10% of
the respondents who have no opinion.
Second most important question to all respondents is question 1.
the respondents agree that there is job loss due to outsourcing and 28%
strongly agree. So, a total of 73% of the respondents agree to question 1.
There is however 13% of the respondents who strongly do not agree that
there is job loss due to outsourcing and 5% disagree, leaving 10% of the
respondents who have no opinion.
Third most important question to all respondents is question 17.

Mathias - 27
the respondents agree that companies whose business is not software
of the respondents agree to question 17. There is however 10% of the
respondents who disagree, leaving 18% of the respondents who have no
opinion.
Fourth most important question to all respondents is question 16.
the respondents agree that companies take risk by outsourcing and 25%
strongly agree. So, a total of 70% of the respondents agree to question 17.
There is however 8% of the respondents who strongly do not agree that
companies take risk by outsourcing and 13% disagree, leaving 10% of the
respondents who have no opinion.
Fifth most important question to all respondents is question 5.
the respondents agree that employees learn new skills to protect their future
and 18% strongly agree. So, a total of 73% of the respondents agree to
question 5. There is however 3% of the respondents who strongly do not
agree that employees learn new skills to protect their future and 13%
disagree, leaving 13% of the respondents who have no opinion.
Asian Indian Respondents
Appendix 2, Figure 2 shows respondents based on country of origin.
There were 17 respondents with India as country of origin. For Asian Indian
Mathias - 28
respondents using Kendall’s Coefficient of Concordance output there is big
After that another big difference is between question 5 and question 1. For
Asian Indian respondents the top 3 questions are ranked as question 8,
question 18, and question 5 as shown in table 6. The percentage of
agreement for this rank is 18.6% based on Kendall’s coefficient of
Concordance. That is, the response pattern matched exactly on 18.6% of the
respondents, a small minority.
Outsourcing Questions Rank for Asian Indian Respondents Rank
8. Companies save cost due to outsourcing 1

Outsourcing
Table 6: Asian Indian respondents question rank
First most important question to Asian Indian respondents is question
8. Appendix 4, Figure 1 shows Asian Indian respondents response to
question 8. 47% of the respondents agree that companies save cost due to
outsourcing and 35% strongly agree. So, a total of 82% of the respondents
agree to question 8. There is however 6% of the Asian Indian respondents
who do not agree that companies save cost, leaving 12% of the respondents
who have no opinion.
Second most important question to Asian Indian respondents is
question 18. Appendix 4, Figure 2 shows Asian Indian respondents response

Mathias - 29
to question 18. 53% of the respondents agree that companies whose
business is software development uses outsourcing and 29% strongly agree.
So, a total of 82% of the respondents agree to question 18. There is
however 6% of the Asian Indian respondents who do not agree that
companies whose business is software development use outsourcing, leaving
12% of the Asian Indian respondents who have no opinion.
Third most important question to Asian Indian respondents is question
5. Appendix 4, Figure 3 shows Asian Indian respondents response to
question 5. 59% of the respondents agree that employees learn new skills to
protect their future and 24% strongly agree. So, a total of 83% of the
respondents agree to question 5. There is however no Indian respondents
who do not agree that employee learn new skills to protect their future,
leaving 18% of the respondents who have no opinion.
Non-Asian Indian Respondents
Appendix 2, Figure 2 shows respondents based on country of origin.
There were 23 Non-Asian Indian respondents. For Non-Asian Indian
respondents using Kendall’s Coefficient of Concordance output there is big
After that another big difference is between question 17 and question 4. For
Non-Asian Indian respondents the top 6 questions are ranked as question 7,
question 6, question 16, question 18, question 1, and question 17 as shown

Mathias - 30
in table 7. The percentage of agreement for this rank is 27.2% based on
Kendall’s coefficient of Concordance.
Outsourcing Questions Rank for Non-Asian Indian Rank

Respondents
7. Quality decreases due to outsourcing 1
6. Productivity decreases due to outsourcing 2
Outsourcing
Outsourcing
Table 7: Non-Asian Indian respondents question rank
That is, the response pattern matched exactly on 27.2% of the respondents.
First most important question to Non-Asian Indian respondents is
question 7. Appendix 5, Figure 1 shows Non-Asian Indian respondents
response to question 7. 52% of the Non-Asian Indian respondents agree that
quality decreases due to outsourcing and 39% strongly agree. So, a total of
91% of the Non-Asian Indian respondents agree to question 7. There is
however 8% of the Non-Asian Indian respondents who do not agree that
quality decrease due to outsourcing.
Second most important question to Non-Asian Indian respondents is
productivity decreases due to outsourcing and 30% strongly agree. So, a

Mathias - 31
total of 82% of the Non-Asian Indian respondents agree to question 6. There
is however 13% of the Non-Asian Indian respondents who do not agree that
productivity decrease due to outsourcing, leaving 4% of the respondents
with no opinion.
Third most important question to Non-Asian Indian respondents is
response to question 16. 43% of the Non-Asian Indian respondents agree
that companies take risk by outsourcing and 35% strongly agree. So, a total
of 78% of the Non-Asian Indian respondents agree to question 16. There is
companies take risk by outsourcing, leaving 9% of the respondents with no
opinion.
Fourth most important question to Non-Asian Indian respondents is
that companies whose business is software development use outsourcing
and 43% strongly agree. So, a total of 73% of the Non-Asian Indian
respondents agree to question 18. There is however 18% of the Non-Asian
Indian respondents who do not agree that companies take risk by
outsourcing, leaving 9% of the respondents with no opinion.
Fifth most important question to Non-Asian Indian respondents is

Mathias - 32
there is job loss due to outsourcing and 39% strongly agree. So, a total of
78% of the Non-Asian Indian respondents agree to question 1. There is
there is job loss due to outsourcing, leaving 4% of the respondents with no
opinion.
Sixth most important question to Non-Asian Indian respondents is
that companies whose business is not software development use outsourcing
and 26% strongly agree. So, a total of 69% of the Non-Asian Indian
respondents agree to question 17. There is however 9% of the Non-Asian
Indian respondents who do not agree that companies whose business is not
software development use outsourcing, leaving 22% of the respondents with
no opinion.
Comparing the top rank of question of Asian Indian respondents to
Non-Asian Indian respondents, there is question 18 which both groups
consider are important to them. Asian Indian consider saving cost and
learning new skills as important where as Non-Asian Indians consider quality
productivity, risk, and job loss as an issue.
Asian Indian Versus Non-Asian Indian Comparison

Mathias - 33
Table 8 shows question common to both Asian Indian and Non-Asian
Indian.
Common Outsourcing Questions Rank Rank

Asian Indian Non-Asian
Indian
18. Companies whose business is 2 4
Software Development uses Outsourcing
Table 8: Asian Indian & Non-Asian Indian respondents common

question rank
Question 18 is the common question for Asian-Indian and Non-Asian
Indian. Question 18 which is companies whose business is software
development uses outsourcing, ranks second for Asian Indian and fourth for
Non-Asian Indian.
Fig 1: Companies whose business is Software

Development uses Outsourcing
60
50
40
Percentage
Asian-Indians
30
Non-Asian Indians
20
10
0
e e on e e
re re ni re re
ag g pi Ag Ag
D
i s isa O gl
y
y D o n
gl N ro
r on St
St
Response
Figure 1 compares how Asian Indian and Non-Asian Indian responded
to question 18. 82% of Asian Indian agreed to question 18 where as 73% of

Mathias - 34
Non-Asian Indian agree to question 18. There is only 6% of Asian Indian
who disagree to question 18 and there are none who strongly disagree. 9%
of Non-Asian Indian disagree to question 18 and another 9% who strongly
disagree. There is however 12% of Asian Indian who have no opinion and
9% of Non-Asian Indian who have no opinion.
Less Experience Respondents
Appendix 2, Figure 3 shows all respondents based on experience. There
were 22 respondents with less than equal to 10 years of experience. For less
experience respondents using Kendall’s Coefficient of Concordance there is
big difference between question 18 and question 16 with respect to rank
sum. After that another big difference is between question 5 and question
17. For less experienced respondents the top 4 questions are ranked as
question 18, question 16, question 1, and question 5 as shown in Table 9.
The percentage of agreement for this rank of importance is 16.9% based on
Kendall’s coefficient of Concordance. That is, the response pattern matched
exactly on 16.9% of the respondents, a small minority.
Outsourcing Questions Rank for Less Experience Rank

Respondents
Outsourcing
Table 9: Less experience respondents question rank

Mathias - 35
First most important question to less experience respondents is
question 18. Appendix 6, Figure 1 shows all less experienced respondents
response to question 18. 41% of the less experience respondents agree that
companies whose business is software development uses outsourcing and
41% strongly agree. So, a total of 82% of the less experience respondents
agree to question 18. There is however 5% of the less experience
respondents who do not agree that companies whose business is software
development uses outsourcing, leaving 14% with no opinion.
Second most important question to less experience respondents is
companies take risk by outsourcing and 27% strongly agree. So, a total of
77% of the less experience respondents agree to question 16. There is
however 9% of the less experience respondents who do not agree that
companies take risk by outsourcing, leaving 14% with no opinion.
Third most important question to less experience respondents is
78% of the less experience respondents agree to question 1. There is
however 14% of the less experience respondents who do not agree that
there is job loss due to outsourcing, leaving 9% with no opinion.

Mathias - 36
Fourth most important question to less experience respondents is
employees learn new skills to protect their future and 23% strongly agree.
So, a total of 78% of the less experience respondents agree to question 5.
There is however 14% of the less experience respondents who do not agree
that employees learn new skills to protect their future, leaving 9% with no
opinion.
More Experience Respondents
Appendix 2, Figure 3 shows all more experienced respondents based on
experience. There were 18 respondents with more than 10 years of
experience. For more experience respondents using Kendall’s Coefficient of
Concordance output, there is big difference between question 1 and question
5 with respect to rank sum. For more experience respondents the top 4
questions are ranked as question 17, question 18, question 4, and question
1 as shown in table 10.
Outsourcing Questions Rank for More Experience Rank

Respondents
Outsourcing
Outsourcing
4. Employees choose a new career path due to outsourcing 3
Table 10: More experience respondents question rank

Mathias - 37
The percentage of agreement for this rank is 11.1% based on Kendall’s
coefficient of Concordance. That is, the response pattern matched exactly on
11.1% of the respondents, a small minority.
First most important question to more experience respondents is
question 17. Appendix 7, Figure 1 shows all more experienced respondents
response to question 17. 56% of the more experience respondents agree
that companies whose business is not software development uses
outsourcing and 22% strongly agree. So, a total of 78% of the more
experience respondents agree to question 17. There is however 11% of the
more experience respondents who do not agree that companies whose
business is not software development uses outsourcing, leaving 11% with no
opinion.
Second most important question to more experience respondents is
response to question 18. 39% of the more experience respondents agree
that companies whose business is software development uses outsourcing
and 33% strongly agree. So, a total of 72% of the more experience
respondents agree to question 18. There is however 22% of the more
experience respondents who do not agree that companies whose business is
software development uses outsourcing, leaving 6% with no opinion.
Third most important question to more experience respondents is

Mathias - 38
response to question 4. 61% of the more experience respondents agree that
employees choose a new career path due to outsourcing and 11% strongly
agree. So, a total of 72% of the more experience respondents agree to
question 4. There is however 6% of the more experience respondents who
do not agree that employees choose a new career path due to outsourcing,
leaving 22% with no opinion.
Fourth most important question to more experience respondents is
response to question 1. 33% of the more experience respondents agree that
66% of the more experience respondents agree to question 1. There is
however 23% of the more experience respondents who do not agree that
there is job loss due to outsourcing, leaving 11% with no opinion.
Less Experience Versus More Experience Comparison
Table 11 shows questions common to both less experience and more
experience respondents.

Less More
Experience Experience
1. There is job loss due to outsourcing 3 4
Table 11: Less experience and more experience respondents

common question rank
Mathias - 39
Question 18 is the first common question for less experience and more
experience respondents. Question 18 which is companies whose business is
software development use outsourcing, ranks first for less experience and
second for more experience respondents. Figure 2 compares how less
experience and more experience respondents responded to question 18.
82% of less experience agreed to question 18 where as 72% of more
experience agree to question 18. There is only 5% of less experience who
disagree to question 18 and there are none who strongly disagree. 11% of
more experience disagree to question 18 and another 11% who strongly
disagree. There is however 14% of less experience who have no opinion and
6% of more experience who have no opinion.
Fig 2: Companies whose business is Software Fig 3: There is job loss due to outsourcing
60
45
50
40
35 40
Percentage
Less Experience
30
Percentage
Less Experience
respondents
25 respondents 30
More Experience
20 More Experience
20 respondents
15 respondents
10
10
5
0 0
ee ee on ee re
e ee ee on re
e
re
e
gr gr ni gr gr gr ni
isa sa pi A Ag sa pi Ag Ag
Di O y isa Di O ly
D o gl D o g
ly N on ly N
ro
n
ng St
r ng St
S tr o tr o
S
Response Response
Figure 3 compares how less experience and more experience
respondents responded to question 1. Question 1 is the second common
question for less experience and more experience respondents. Question 1
which is that there is job loss due to outsourcing, ranks third for less
experienced and fourth for more experienced respondents. Figure 3

Mathias - 40
compares how less experienced and more experienced respondents
responded to question 18. 78% of less experience agreed to question 1
where as 66% of more experience agree to question 1. There is only 5% of
less experience who disagree to question 1 and there 9% who strongly
disagree. 6% of more experience disagree to question 1 and another 17%
who strongly disagree. There is however 9% of less experience who have no
opinion and 11% of more experience who have no opinion.
Undergraduate Respondents
Appendix 2, Figure 4 shows all respondents based on education level.
There were 16 respondents with High School or undergraduate degree. Both
these sample respondents were summed up to give a better sample size. In
Kendall’s Coefficient of Concordance output for this sample, there was a big
Second big difference was between question 14 and question 6.
Outsourcing Questions Rank for Under Graduate and below Rank

Respondents
7. Quality decreases due to outsourcing 1
Outsourcing
Outsourcing
14. Politicians use outsourcing for their own advantage. 7
Table 12: Under Graduate & below respondents question rank

Mathias - 41
For undergraduate or less education level respondents the top 7 questions
are ranked as question 7, question 1, question 16, question 17, question 5,
question 18 and question 14 as shown in table 12. The percentage of
agreement for this rank is 16.1% based on Kendall’s coefficient of
Concordance. That is the response pattern matched perfectly 16.1 % of the
time.
First most important question to undergraduate or less education level
respondents was question 7. Appendix 8, Figure 1 shows all undergraduate
or less education level respondents response to question 7. 56% of the
undergraduate or less education level respondents agree that quality
decreases due to outsourcing and 25% strongly agree. So, a total of 81% of
the undergraduate or less education level respondents agree to question 7.
There is however 6% of the undergraduate or less education level
respondents who do not agree that quality decreases due to outsourcing,
Second most important question to undergraduate or less education
level respondents was question 1. Appendix 8, Figure 2 shows all
undergraduate or less education level respondents response to question 1.
31% of the undergraduate or less education level respondents agree that
75% of the undergraduate or less education level respondents agree to
question 1. There is however 19% of the Under-Graduate or less education

Mathias - 42
level respondents who do not agree that there is job loss due to outsourcing,
Third most important question to undergraduate or less education
companies take risk by outsourcing and 38% strongly agree. So, a total of
question 16. There is however 25% of the undergraduate or less education
level respondents who do not agree that companies take risk by outsourcing,
Fourth most important question to undergraduate or less education
companies whose business is not software development uses outsourcing
and 25% strongly agree. So, a total of 69% of the undergraduate or less
education level respondents agree to question 17. There is however 13% of
the undergraduate or less education level respondents who do not agree
that companies whose business is not software development uses
outsourcing, leaving 19% with no opinion.

Mathias - 43
Fifth most important question to undergraduate or less education level
respondents was question 5. Appendix 8, Figure 5 shows all undergraduate
or less education level respondents response to question 5. 50% of the
undergraduate or less education level respondents agree that employees
learn new skills to protect their future and 19% strongly agree. So, a total of
question 5. There is however 19% of the undergraduate or less education
level respondents who do not agree that employees learn new skills to
protect their future, leaving 13% with no opinion.
Sixth most important question to undergraduate or less education
companies whose business is software development uses outsourcing and
31% strongly agree. So, a total of 69% of the undergraduate or less
education level respondents agree to question 18. There is however 26% of
the undergraduate or less education level respondents who do not agree
that companies whose business is software development uses outsourcing,
Seventh most important question to undergraduate or less education

Mathias - 44
politicians use outsourcing for their own advantage and 25% strongly agree.
So, a total of 50% of the Under-Graduate or less education level
respondents agree to question 14. There is however 6% of the
undergraduate or less education level respondents who do not politicians use
outsourcing for their own advantage, leaving 44% with no opinion.
Graduate Respondents
Appendix 2, Figure 4 shows all graduate respondents based on
education level. There were 24 respondents with Graduate or PhD degree. In
Second big difference was between question 16 and question 8.
Outsourcing Questions Rank for Graduate and above Rank

Respondents
Outsourcing
Outsourcing
Table 13: Graduate and above respondents question rank
For Graduate or more education level respondents the top 6 questions are
ranked as question 18, question 4, question 17, question 1, question 5, and

Mathias - 45
question 16 as shown in table 13. The percentage of agreement for this rank
is 13.1% based on Kendall’s coefficient of Concordance. That is, the
response pattern matched perfectly 13.1% of the time.
First most important question to graduate or more education level
respondents was question 18. Appendix 9, Figure 1 shows all graduate or
more education level respondents response to question 18. 42% of the
graduate or more education level respondents agree that companies whose
business is software development uses outsourcing and 42% strongly agree.
So, a total of 84% of the graduate or more education level respondents
agree to question 18. There is however 4% of the graduate or more
education level respondents who do not agree that companies whose
business is software development uses outsourcing, leaving 13% with no
opinion.
Second most important question to graduate or more education level
graduate or more education level respondents agree that employees choose
a new career path due to outsourcing and 17% strongly agree. So, a total of
75% of the graduate or more education level respondents agree to question
4. There is however 4% of the graduate or more education level respondents
who do not agree that employees choose a new career path due to

Mathias - 46
Third most important question to graduate or more education level
respondents was question 17. Appendix 9, Figure 3 shows all respondents
response to question 17. 58% of the Graduate or more education level
respondents agree that companies whose business is not software
of the Graduate or more education level respondents agree to question 17.
There is however 8% of the Graduate or more education level respondents
who do not agree that companies whose business is not software
development uses outsourcing, leaving 17% with no opinion.
Fourth most important question to Graduate or more education level
graduate or more education level respondents agree that there is job loss
due to outsourcing and 17% strongly agree. So, a total of 71% of the
graduate or more education level respondents agree to question 1. There is
however 16% of the graduate or more education level respondents who do
not agree that there is job loss due to outsourcing, leaving 13% with no
opinion.
Fifth most important question to graduate or more education level
graduate or more education level respondents agree that employees learn

Mathias - 47
new skills to protect their future and 17% strongly agree. So, a total of 75%
of the graduate or more education level respondents agree to question 5.
There is however 13% of the graduate or more education level respondents
who do not agree that employees learn new skills to protect their future,
Sixth most important question to graduate or more education level
respondents was question 16. Appendix 9 Fig 6 shows all graduate or more
education level respondents response to question 16. 54% of the graduate
or more education level respondents agree that companies take risk by
outsourcing and 17% strongly agree. So, a total of 71% of the graduate or
more education level respondents agree to question 16. There is however
16% of the graduate or more education level respondents who do not agree
that companies take risk by outsourcing, leaving 13% with no opinion.
Undergraduate Versus Graduate Comparison
Table 14 shows the common questions to both Undergraduate or High
School and Graduate or PhD. First common question for undergraduate and
graduate is question 1. Question 1 ranks second for undergraduate and
fourth for graduate respondents. Figure 4 compares how undergraduate and
graduate respondents responded to question 1. 75% of undergraduate
agreed to question 1 where as 71% of graduate agree to question 1. There
is none from undergraduate who disagree to question 1 but there is 19%

Mathias - 48

Under Graduate
Graduate
16. Companies take risk by outsourcing 3 6
17. Companies whose business is not 4 3
software development uses Outsourcing
5. Employees learn new skills to protect their 5 5
future
18. Companies whose business is Software 6 1
Table 14: Under Graduate & below and Graduate and above
respondents common question rank
who strongly disagree. 8% of graduate disagree to question 1 and another
8% who strongly disagree. There is however 6% of undergraduate who have
no opinion and 13% of graduate who have no opinion.
Fig 4: There is job loss due to outsourcing Fig 5: Companies take risk by outsourcing
60 60
50 50
40 40
Percentage
Percentage
Under-Graduate or Under-Graduate or
Less respondents Less respondents
30 30
Graduate or PhD Graduate or PhD
20 respondents 20 respondents
10 10
0 0
ee ee on re
e
re
e ee ee on re
e
re
e
gr gr ni gr gr ni
isa sa pi Ag Ag isa sa pi Ag Ag
D Di o
O
gl
y D Di o
O
gly
ly N on ly N
ro
n
ng St
r ng St
S tr o S tr o
Response Response
Second common question for undergraduate and graduate is question
16. Figure 5 compares how undergraduate and graduate respondents
responded to question 16. Question 16 ranks third for undergraduate and
sixth for graduate respondents. Figure 5 compares how undergraduate and
graduate respondents responded to question 16. 69% of undergraduate
agreed to question 16 where as 71% of graduate agree to question 16. 19%

Mathias - 49
of undergraduate disagree to question 16 and another 6% who strongly
disagree. 8% of graduate disagree to question 16 and another 8% who
strongly disagree. There is however 6% of undergraduate who have no
opinion and 13% of graduate who have no opinion.
Third common question for undergraduate and graduate is question
responded to question 17. Question 17 ranks fourth for undergraduate and
third for graduate respondents. Figure below compares how undergraduate
and graduate respondents responded to question 17. 69% of undergraduate
agreed to question 17 where as 75% of graduate agree to question 17.
There is 13% of undergraduate who disagree to question 17 but none who
strongly disagree. There are none from graduate who disagree to question
17 but there are 8% who strongly disagree. There is however 19% of
undergraduate who have no opinion and 17% of graduate who have no
opinion.
Fig 6: Companies whose business is not software Fig 7: Employees learn new skills to protect their
development uses Outsourcing future
70 70
60 60
50 50
Percentage
Under-Graduate or
Percentage
Under-Graduate or
40 Less respondents 40 Less respondents
30 Graduate or PhD 30 Graduate or PhD
respondents respondents
20 20
10 10
0 0
ee re
e on re
e
re
e ee ee on re
e
re
e
gr ni gr gr ni
isa
ag pi Ag Ag sa pi Ag Ag
D Dis O ly isa Di O l y
No ng D
l y l y No ng
ng tr o ng ro
ro S ro St
St St
Response Response
Mathias - 50
Fourth common question for undergraduate and graduate is question
responded to question 5. Question 5 ranks fifth for undergraduate and
graduate respondents. Figure 7 compares how undergraduate and graduate
respondents responded to question 5. 69% of undergraduate agreed to
question 5 where as 75% of graduate agree to question 5. 13% of
undergraduate disagree to question 5 and another 6% who strongly
disagree. 13% of graduate disagree to question 5 but there are none who
Fifth common question for undergraduate and graduate is question 18.
Question 18 ranks sixth for under graduate and first for graduate
respondents. Figure 8 compares how undergraduate and graduate
respondents responded to question 18. 69% of undergraduate agreed to
question 18 where as 84% of graduate agree to question 18. 13% of
undergraduate disagree to question 18 and another 13% who strongly
disagree. 4% of graduate disagree to question 18 but there are none who

Mathias - 51
Fig 8: Companies whose business is Software

45
40
35
30
Percentage
Under-Graduate or
25 Less respondents
20 Graduate or PhD
15 respondents
10
5
0
ee e n e e
re io re re
gr ag in Ag Ag
isa Di
s O
p
l y
D
ly No ng
ng ro
tro St
S
Response
Computer Major Respondents
Appendix 2, Figure 5 shows all computer related major respondents
based on major in school. There were 24 respondents with computer related
major. In Kendall’s Coefficient of Concordance output for this sample, there
was a big difference between question 18, question 5, and question 4 with
respect to rank sum. The next big difference was between question 17 and
question 1.
Outsourcing Questions Rank for Computer related major Rank

Respondents
Outsourcing
Outsourcing
Table 15: Computer related major respondents question rank
For computer related major respondents the top 4 questions are ranked as
question 18, question 5, question 4, and question 17 as shown in table 15.

Mathias - 52
The percentage of agreement for this rank of importance is 14.6% based on
exactly 14.6% of the time.
First most important question to computer related major respondents
was question 18. Appendix 10, Figure 1 shows all computer related major
respondents response to question 18. 50% of the computer related major
respondents agree that companies whose business is software development
uses outsourcing and 38% strongly agree. So, a total of 88% of the
computer related major respondents agree to question 18. There is however
13% of the computer related major respondents who do not agree that
companies whose business is software development uses outsourcing,
leaving none without opinion.
Second most important question to computer related major
respondents were question 5. Appendix 10, Figure 2 shows all computer
related major respondents response to question 5. 58% of the computer
related major respondents agree that employees learn new skills to protect
their future and 25% strongly agree. So, a total of 83% of the computer
related major respondents agree to question 5. There is however 4% of the
computer related major respondents who do not agree that employees learn
new skills to protect their future, leaving 13% with no opinion.
Third most important question to computer related major respondents
were question 4. Appendix 10, Figure 3 shows all computer related major
Mathias - 53
respondents response to question 4. 54% of the computer related major
respondents agree that employees choose a new career path due to
outsourcing and 21% strongly agree. So, a total of 75% of the computer
related major respondents agree to question 4. There is however 8% of the
computer related major respondents who do not agree that employees
choose a new career path due to outsourcing, leaving 17% with no opinion.
Fourth most important question to computer related major
respondents were question 17. Appendix 10, Figure 4 shows all computer
related major respondents response to question 17. 63% of the computer
related major respondents agree that companies whose business is not
software development uses outsourcing and 17% strongly agree. So, a total
of 80% of the computer related major respondents agree to question 17.
There is however 12% of the computer related major respondents who do
not agree that companies whose business is not software development uses
Technical or Non-Technical Major Respondents
Appendix 2, Figure 5 shows all technical or non-technical major
respondents based on major in school. There were 16 respondents with
technical or non-technical related major and one blank response. In
difference between question 16 and question 6 with respect to rank sum. For
technical or non-technical related major respondents the top 4 questions are

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ranked as question 18, question 1, question 17, and question 16 as shown in
table 16. The percentage of agreement for this rank is 11.1% based on
exactly 11.1% of the time.
Outsourcing Questions Rank for Technical and Non- Rank

Technical Respondents
Outsourcing
Outsourcing
Table 16: Technical and Non-Technical major respondents question rank
First most important question to technical or non-technical related
major respondents was question 18. Appendix 11, Figure 1 shows all
technical or non-technical related major respondents response to question
18. 25% of the computer related major respondents agree that companies
whose business is software development uses outsourcing and 38% strongly
agree. So, a total of 63% of the technical or non-technical related major
respondents agree to question 18. There is however 13% of the technical or
non-technical related major respondents who do not agree that companies
whose business is software development use outsourcing, leaving 25%
without opinion.
Second most important question to technical or non-technical related
major respondents was question 1. Appendix 11, Figure 2 shows all technical
Mathias - 55
or non-technical related major respondents response to question 1. 44% of
the computer related major respondents agree that there is job loss due to
outsourcing and 31% strongly agree. So, a total of 75% of the technical or
non-technical related major respondents agree to question 1. There is
however 26% of the technical or non-technical related major respondents
who do not agree that there is job loss due to outsourcing, leaving none
without opinion.
Third most important question to technical or non-technical related
whose business is not software development uses outsourcing and 25%
strongly agree. So, a total of 63% of the technical or non-technical related
major respondents agree to question 17. There is however 6% of the
technical or non-technical related major respondents who do not agree that
companies whose business is not software development use outsourcing,
leaving 31% without opinion.
Fourth most important question to technical or non-technical related
take risk by outsourcing and 19% strongly agree. So, a total of 75% of the
Mathias - 56
technical or non-technical related major respondents agree to question 16.
There is however 19% of the technical or non-technical related major
respondents who do not agree that companies take risk by outsourcing,
leaving 6% without opinion.
Computer Versus Technical and Non-Technical Comparison
Table 17 shows the common question to both computer and technical
plus non-technical respondents.

Computer Technical or
Non-Technical
17. Companies whose business is not 4 3
software development uses Outsourcing
Table 17: Computer related major and Technical and Non-

Technical major respondents common question rank
First common question for computer and technical or non-technical
respondents is question 18. Question 18 which is companies whose business
is software development uses outsourcing, ranks first for both computer and
technical or non-technical respondents. Figure 9 compares how computer
and technical or non-technical respondents responded to question 18. 88%
of computer major agreed to question 18 where as 63% of technical or non-
technical major agreed to question 18. There is only 13% of computer major
who disagree to question 18 and there are none who strongly disagree.
There are none from technical or non-technical major who disagree to
question 18, but there are 13% who strongly disagree. There is none from
Mathias - 57
computer major who have no opinion and 25% of technical or non-technical
major who have no opinion.
Second common question for computer and technical or non-technical
respondents is question 17. Figure 10 compares how computer and technical
or non-technical respondents responded to question 17. Question 17 which
is companies whose business is not software development uses outsourcing,
ranks fourth for computer and third for technical or non-technical
respondents. Figure below compares how computer and technical or non-
technical respondents responded to question 17. 80% of computer major
agreed to question 17 where as 63% of technical or
Fig 9: Companies whose business is Software Fig 10: Companies whose business is not software
Development uses Outsourcing development uses Outsourcing
60 70
50 60
Computer major Computer major
50
40
Percentage
respondents
Percentage
respondents
40
30
Technical and Non- 30 Technical and Non-
20 Technical major Technical major
respondents 20
respondents
10 10
0 0
ee ee on re
e
re
e ee ee on re
e
re
e
gr gr ni gr gr ni
isa sa pi Ag Ag sa pi Ag Ag
i O y isa Di O ly
D D
No gl D o g
gl
y
r on ly N
ro
n
on St ng St
St
r
S tr o
Response Response
non-technical major agreed to question 17. There is only 8% of computer
major who disagree to question 17 and there are 4% who strongly disagree.
There are none from technical or non-technical major who disagree to
question 17, but there are 6% who strongly disagree. There are 8% from
Mathias - 58
computer major who have no opinion and 31% of technical or non-technical
major who have no opinion.
Conclusion
Table 18 shows the top 5 ranking questions for pooled respondents. It
also shows how many different sub-groups rank these questions important
to them. Question 18 is important to all 8 sub-groups. 6 sub-groups share
the importance to Question 1 and 17 and 5 sub-groups share the importance
to question 16 and 5.
Outsourcing Questions Pooled Important to # of Groups

Rank
18. Companies whose business is Software 1 8
17. Companies whose business is not software 3 6
development uses Outsourcing
16. Companies take risk by outsourcing 4 5
5. Employees learn new skills to protect their future 5 5
Table 18: Top 5 questions in pooled and among 8 sub-groups.
Question 18 is the most important for all eight sub-groups. This
demonstrates that the respondents agree that all software development
companies do offshore outsourcing. This may be due to various reasons.
Software companies find cheaper resources in India. Salary compensation
for American workers may be a burden since employers have to pay higher
hourly wages and payroll taxes, which increases the salary compensation for
American workers. (Buchholz 2004). Software companies may find more

Mathias - 59
young graduates ready to work cheaper since countries like India produces
almost double the number of graduates than America produces. (Hira and
Hira 2005).
Second top ranking question for pooled respondents is question 1, that
is, there is job loss due to offshore outsourcing. Six sub-groups find this
question important to them. Two sub-groups Asian Indians and computer
related major respondents didn’t find this question to be important to them.
This may be because Asian Indians think there may be new opportunities
because of outsourcing and they can move to a different role in the company
and computer related major may think they have a computer technical
background and may not lose their job. But other 6 sub-groups do rank this
question to be important as they see lot of displaced American workers.
Dobbs (2004) and Hira and Hira (2005) both agree to jobs being lost to
offshore workers.
Third top ranking question for pooled respondents is question 17, that
is, non-software development companies also do software or IT outsourcing.
Again six sub-groups find this question important to them just like question
1. Here Asian Indians and less than equal to 10 years experienced sub-group
don’t agree to question 17 to be most important to them. But it is important
question for the other 6 sub-groups. This shows that not only software
companies go for offshore outsourcing, but also non software companies
whose core business is not software development. This is what Butler (2000)
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suggests companies should do. Concentrate on its core business and
outsource the rest.
Fourth top ranking question for pooled respondents is question 16,
that is, companies take risk by offshore outsourcing. Five sub-groups find
this question important to them. Here Indians, greater than 10 years
experienced, and computer related major don’t agree question 16 to be
important to them. But it is important question for other 5 sub-groups.
Companies take big risk by indulging in offshore outsourcing. They have to
do a lot of investment in the beginning for long term gain. They have to deal
with cultural issues, feeling of isolation, lack of trust, quality, infrastructure,
and political stability as suggested by Cooper and Burke (2002) and Patel
and Aran (2005).
Fifth top ranking question for pooled respondents is question 5, that is,
employees learn new skills to protect their future. Five sub-groups find this
question important to them. Here Non-Asian Indians, greater than 10 years
experienced, and technical or non-technical related major don’t agree
question 5 to be important to them. Technical or non-technical related major
employees having their major in other industry may think that they were
able to find jobs in computer industry when the computer industry was
booming, may similarly think that they will be able to find jobs in other
industry when there are no jobs in computer related industry. Greater than
10 years experienced employees may think that they are experienced and
Mathias - 61
may be able to find jobs in other industry. Non-Asian Indians may think that
they will be able to find jobs in other industry as they have been working in
different industry since they have started working. Other 5 sub-groups may
think that they have to protect their own future and considers learning new
skill important to them.
Future Research
This study used a survey questionnaire as an instrument to find out
what software professionals think about offshore outsourcing. Forty
participants responded to the survey, but with a higher number of
respondents the result may have been more generalizeable.
The survey questionnaire respondent pool was biased since most of
the respondents had acquaintance with the author. This study should have
had more randomness in its sample by submitting an online survey to
different universities or different companies and also the general population.
More questions should have been asked regarding daily work of employees,
their experience when interacting with offshore counterparts. More about
how management is structured for both offshore and on shore employees
would have been useful also.
No interviews were conducted as part of this study other than the
questionnaire. Interviews would have helped to find out the hidden
perspectives. The respondents were not identified as managers or
employees, if the respondents were identified it would have given the

Mathias - 62
perspective of the management as well as employees too. There was no
input from companies involved in offshore outsourcing. Their input in terms
of productivity, cost savings, quality, risk etc. would have given a better
understanding of what really is happening in those areas.
The Survey didn’t concentrate on the future of the software industry.
Nobody knows how it will be 5 years or 10 years down the road. Some
authors do predict that offshore outsourcing is going to increase year after
year. This survey didn’t concentrate on respondents’ own outsourcing
experience. Respondent’s experience regarding outsourcing would have
helped to understand how work is done daily where outsourcing is taking
place.
This survey didn’t use respondents from India who are not in the
United States. Their perspective would have given a look on the other side of
outsourcing. How do they feel working with the American counterpart and
vice versa? Does management think of them as another sweatshop or do
they think of them with talent and probably India as a house of innovation?
Are they comfortable working with their American counterpart? Do they feel
isolated as the headquarters is located somewhere else?
More personal questions should have been introduced such as whether
they work for a software development company or a non-software
development company. Does their company indulge in outsourcing offshore?

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Does their company have an equal number of employees onshore and
offshore or do they follow Jack Welch’s 70-70-70 rule?
More quality related questions such as the number of bugs in the
software after outsourcing and before outsourcing. How many lines of codes
are developed onshore compared to offshore. Is there new development
onshore or offshore?
Some questions to companies in the survey would have given this
study more meaning. For example, does more experience employees gets
laid off first or less experience? Does employees with masters degree get
laid off first or with under graduate degree? Who works for Software
Development Company or non-Software Development Company (having IT
as department to support its business)? Is it graduates or under graduates,
more experienced or less experienced, computer related major or
technical/non-technical major?
With all these questions, the study would have been more complete
and the project would have had more in depthful information about offshore
outsourcing.
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Bibliography
Bardhan, Ashok D., Dwight M. Jaffee, and Cynthia A. Kroll. 2004.
Globalization and a High-Tech Economy: California, the United States
and Beyond. Norwell, Massachusetts: Kluwer Academic Publishers.
BBC, “Country Profile”, August 2006. http://news.bbc.co.uk (accessed
August 3 2006)
Buchholz, Todd G. 2004. Bringing the Jobs Home: How the left Created the
Outsourcing Crisis and How We Can Fix it. New York: The Penguin
Group.
Butler, Janet, editor. 2000. Winning the Outsourcing Game: Making the Best
Deals and Making them Work. Florida: Copyright Clearance Center CRC
Press LLC.
Cooper, Cary, L. and Ronald J. Burke, editor. 2002. The New World of Work:
Challenges and Opportunities. Malden, Massachusetts: Blackwell
Publishers Inc.
Dobbs, Lou. 2004. Exporting America: Why Corporate Greed Is Shipping
American Jobs Overseas. New York: The Warner Book Group.
Drezner, Daniel W. 2004. The Outsourcing Bogeyman. Foreign affairs
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http://www.foreignaffairs.org/20040501faessay83301/daniel-w-
drezner/the-outsourcing-bogeyman.html (accessed April 22, 2006)

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Gilley, Matthew K. and Abdul Rasheed. 2000 Making More by Doing Less: An
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Wexler, Joanie 2005. Succeeding at Outsourcing. ComputerWorld Dec 12,
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(accessed April 22, 2006)
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Appendix 1: Questionnaire
This survey question will help understand what IT employees think about outsourcing of IT
jobs. This survey question’s is targeted to the country (USA) where outsourcing is taking
place. Time estimated to take this survey is approximately 5 - 10 minutes.
I am using likert scale question from 1 to 5 to help in the analysis.

5- Strongly Agree
4- Agree
3- No Opinion
2- Disagree
1- Strongly Disagree
Outsourcing Questions Scale

1 2 3 4 5
1. There is job loss due to outsourcing
2. New jobs are created due to outsourcing
3. Company provides employees training on new jobs.
4. Employees choose a new career path due to
outsourcing
5. Employees learn new skills to protect their future
6. Productivity decreases due to outsourcing
7. Quality decreases due to outsourcing
8. Companies save cost due to outsourcing
9. Companies are better able to serve customer due to
outsourcing
10.Companies produce new products due to outsourcing
11.Graduating students are able to find jobs after
graduation
12.Outsourcing helps the economy of the country
13.Government should put restrictions on outsourcing
14.Politicians use outsourcing for their own advantage.
15.Customers buy software products cheaper due to
outsourcing
16.Companies take risk by outsourcing
17.Companies whose business is not software
18.Companies whose business is Software Development
uses Outsourcing
Mathias - 68
Personal Question
1. Your Country of Origin _____________

A – Indian (Not Native American)
B – Non-Indian
2. Your age __________

A – 20 to 25
B – 26 to 30
C – 31 to 35
D – 36 to 40
E – 41 to 45
F – Greater than 45
3. Years worked in Software industry __________
4. Highest Level of Education ____________

A – High School
B – Under Graduate
C – Graduate
D – PhD
5. Major field of study in college ____________
Demographic/Code 1 2 3 4 5 6
Origin Asian Indian Non-Asian Indian

Age in years 20 - 25 26 - 30 31 - 35 36 - 40 41 - 45 > 45
Experience 1 - 10 > 11
High School +
Level of Education Undergraduate Graduate + PhD
Technical + Non-
Major in School Computer Technical
Fig 2: Coding based on demographics

Mathias - 69
Appendix 2: Rank
ALL RESPONDENTS POOLED

Kendall's W=12.8% Concordance
Chi^2 = 86.76; p(Chi^2)=.000
N=40 with 17 Degrees of Freedom
Importance Average Rank

Rank Rank Sum Average StDev
QUES18 1 12.288 491.500 3.975 1.121
QUES1 2 11.488 459.500 3.700 1.285
QUES17 3 11.313 452.500 3.775 1.000
QUES16 4 11.213 448.500 3.675 1.207
QUES5 5 11.113 444.500 3.725 0.987
QUES4 6 10.788 431.500 3.700 0.853
QUES7 7 10.563 422.500 3.600 1.215
QUES8 8 10.200 408.000 3.425 1.238
QUES14 9 10.113 404.500 3.550 1.131
QUES6 10 9.850 394.000 3.450 1.239
QUES10 11 9.400 376.000 3.350 1.001
QUES15 12 8.500 340.000 3.150 1.099
QUES11 13 8.313 332.500 3.175 0.903
QUES13 14 7.350 294.000 2.900 1.277
QUES9 15 7.338 293.500 2.800 1.224
QUES2 16 7.213 288.500 2.800 1.224
QUES12 17 7.188 287.500 2.800 1.203
QUES3 18 6.775 271.000 2.775 1.025
Fig 1: Rank of question for all the respondents

Mathias - 70
INDIAN RESPONDENTS NON-INDIAN RESPONDENTS

Kendall's W=18.6% Concordance Kendall's W=27.2% Concordance
Chi^2 = 53.72; p(Chi^2)=.000 Chi^2 = 106.36; p(Chi^2)=.000
N=17 with 17 Degrees of Freedom N=23 with 17 Degrees of Freedom
Import Import
ance Average Rank ance Average Rank
Rank Rank Sum Average StDev Rank Rank Sum Average StDev
QUES8 1 13.000 221.000 4.118 0.857 QUES7 1 13.435 309.000 4.174 0.984
QUES18 2 12.294 209.000 4.059 0.827 QUES6 2 12.435 286.000 4.000 0.953
QUES5 3 11.912 202.500 4.059 0.659 QUES16 3 12.370 284.500 4.000 1.000
QUES1 4 10.588 180.000 3.529 1.068 QUES18 4 12.283 282.500 3.913 1.311
QUES4 5 10.588 180.000 3.765 0.562 QUES1 5 12.152 279.500 3.826 1.435
QUES17 6 10.559 179.500 3.647 1.115 QUES17 6 11.870 273.000 3.870 0.920
QUES15 7 10.471 178.000 3.706 0.849 QUES4 7 10.935 251.500 3.652 1.027
QUES10 8 10.324 175.500 3.588 1.004 QUES5 8 10.522 242.000 3.478 1.123
QUES12 9 10.000 170.000 3.588 1.121 QUES14 9 10.304 237.000 3.565 1.080
QUES14 10 9.853 167.500 3.529 1.231 QUES13 10 8.761 201.500 3.174 1.302
QUES9 11 9.794 166.500 3.471 1.125 QUES10 11 8.717 200.500 3.174 0.984
QUES16 12 9.647 164.000 3.235 1.348 QUES8 12 8.130 187.000 2.913 1.240
QUES11 13 8.618 146.500 3.353 0.862 QUES11 13 8.087 186.000 3.043 0.928
QUES2 14 7.882 134.000 3.118 1.269 QUES15 14 7.043 162.000 2.739 1.096
QUES3 15 7.000 119.000 3.118 0.781 QUES2 15 6.717 154.500 2.565 1.161
QUES7 16 6.676 113.500 2.824 1.074 QUES3 16 6.609 152.000 2.522 1.123
QUES6 17 6.353 108.000 2.706 1.213 QUES9 17 5.522 127.000 2.304 1.063
QUES13 18 5.441 92.500 2.529 1.179 QUES12 18 5.109 117.500 2.217 0.902
Fig 2: Rank of question for Indian and Non-Indian respondents

Mathias - 71
Years of Software Experience <=10 Years of Software Experience >=11

Chi^2 = 63.18; p(Chi^2)=.000 Chi^2 = 34.03; p(Chi^2)=.008
Import Import
ance Average Rank ance Average Rank
QUES18 1 12.909 284.000 4.182 0.853 QUES17 1 11.833 213.000 3.889 0.900
QUES16 2 12.023 264.500 3.955 0.899 QUES18 2 11.528 207.500 3.722 1.364
QUES1 3 11.773 259.000 3.773 1.152 QUES4 3 11.278 203.000 3.778 0.732
QUES5 4 11.727 258.000 3.818 1.053 QUES1 4 11.139 200.500 3.611 1.461
QUES17 5 10.886 239.500 3.682 1.086 QUES5 5 10.361 186.500 3.611 0.916
QUES7 6 10.727 236.000 3.727 1.120 QUES7 6 10.361 186.500 3.444 1.338
QUES8 7 10.409 229.000 3.455 1.224 QUES16 7 10.222 184.000 3.333 1.455
QUES4 8 10.386 228.500 3.636 0.953 QUES6 8 10.056 181.000 3.444 1.423
QUES14 9 10.227 225.000 3.636 1.136 QUES14 9 9.972 179.500 3.444 1.149
QUES6 10 9.682 213.000 3.455 1.101 QUES8 10 9.944 179.000 3.389 1.290
QUES10 11 9.205 202.500 3.364 0.902 QUES11 11 9.750 175.500 3.389 0.916
QUES13 12 8.364 184.000 3.136 1.246 QUES10 12 9.639 173.500 3.333 1.138
QUES15 13 8.318 183.000 3.136 1.037 QUES15 13 8.722 157.000 3.167 1.200
QUES2 14 7.227 159.000 2.864 1.207 QUES12 14 8.222 148.000 2.944 1.392
QUES11 15 7.136 157.000 3.000 0.873 QUES9 15 7.833 141.000 2.889 1.410
QUES9 16 6.932 152.500 2.727 1.077 QUES2 16 7.194 129.500 2.722 1.274
QUES3 17 6.727 148.000 2.727 1.032 QUES3 17 6.833 123.000 2.833 1.043
QUES12 18 6.341 139.500 2.682 1.041 QUES13 18 6.111 110.000 2.611 1.290
Fig 3: Rank of question for <= 10 years and >= 11 years of experience
Mathias - 72
HIGH SCHOOL+UNDERGRAD GRADUATE+PhD

Chi^2 = 43.70; p(Chi^2)=.000 Chi^2 = 53.32; p(Chi^2)=.000
Importa Import
nce Average Rank ance Average Rank
QUES7 1 12.094 193.500 3.938 0.998 QUES18 1 13.167 316.000 4.208 0.833
QUES1 2 11.938 191.000 3.813 1.515 QUES4 2 11.333 272.000 3.875 0.741
QUES16 3 11.500 184.000 3.750 1.342 QUES17 3 11.250 270.000 3.750 1.032
QUES17 4 11.406 182.500 3.813 0.981 QUES1 4 11.188 268.500 3.625 1.135
QUES5 5 11.156 178.500 3.625 1.147 QUES5 5 11.083 266.000 3.792 0.884
QUES18 6 10.969 175.500 3.625 1.408 QUES16 6 11.021 264.500 3.625 1.135
QUES14 7 10.938 175.000 3.688 0.946 QUES8 7 10.583 254.000 3.583 1.176
QUES6 8 10.188 163.000 3.563 1.153 QUES6 8 9.625 231.000 3.375 1.313
QUES10 9 10.000 160.000 3.500 0.816 QUES14 9 9.563 229.500 3.458 1.250
QUES4 10 9.969 159.500 3.438 0.964 QUES7 10 9.542 229.000 3.375 1.313
QUES8 11 9.625 154.000 3.188 1.328 QUES10 11 9.000 216.000 3.250 1.113
QUES11 12 9.188 147.000 3.313 1.014 QUES15 12 8.750 210.000 3.292 0.955
QUES15 13 8.125 130.000 2.938 1.289 QUES9 13 8.000 192.000 3.000 1.216
QUES13 14 7.969 127.500 3.000 1.366 QUES11 14 7.729 185.500 3.083 0.830
QUES12 15 6.875 110.000 2.625 1.204 QUES2 15 7.625 183.000 2.958 1.334
QUES2 16 6.594 105.500 2.563 1.031 QUES12 16 7.396 177.500 2.917 1.213
QUES9 17 6.344 101.500 2.500 1.211 QUES3 17 7.208 173.000 3.000 0.933
QUES3 18 6.125 98.000 2.438 1.094 QUES13 18 6.938 166.500 2.833 1.239
Fig 4: Rank of question for High School + UnderGrad and Graduate + PhD
Mathias - 73
COMPUTER TECHNICAL+NON-TECHNICAL
Chi^2 = 59.65; p(Chi^2)=.000 Chi^2 = 34.88; p(Chi^2)=.006
N=24 with 17 Degrees of Freedom N=15 (1 blank) with 17 Degrees of Freedom
Import Impor
ance Average Rank tance Average Rank
QUES18 1 12.729 305.500 4.125 0.947 QUES18 1 11.900 178.500 3.800 1.373
QUES5 2 12.125 291.000 4.042 0.751 QUES1 2 11.800 177.000 3.600 1.404
QUES4 3 11.396 273.500 3.833 0.963 QUES17 3 11.533 173.000 3.800 1.082
QUES17 4 11.333 272.000 3.792 0.977 QUES16 4 11.467 172.000 3.600 1.298
QUES1 5 11.063 265.500 3.708 1.233 QUES6 5 11.033 165.500 3.533 1.407
QUES16 6 10.958 263.000 3.708 1.197 QUES7 6 11.033 165.500 3.533 1.407
QUES8 7 10.771 258.500 3.583 1.100 QUES10 7 10.433 156.500 3.533 0.915
QUES14 8 10.167 244.000 3.583 1.248 QUES14 8 10.200 153.000 3.533 0.990
QUES7 9 10.000 240.000 3.583 1.100 QUES4 9 10.033 150.500 3.533 0.640
QUES6 10 8.813 211.500 3.333 1.129 QUES5 10 9.733 146.000 3.267 1.163
QUES15 11 8.667 208.000 3.208 1.062 QUES8 11 9.067 136.000 3.133 1.457
QUES10 12 8.583 206.000 3.208 1.062 QUES11 12 8.833 132.500 3.267 0.704
QUES11 13 8.250 198.000 3.167 1.007 QUES12 13 8.467 127.000 3.067 1.223
QUES2 14 7.938 190.500 3.000 1.216 QUES15 14 8.300 124.500 3.067 1.223
QUES9 15 7.375 177.000 2.833 1.204 QUES9 15 7.267 109.000 2.733 1.335
QUES13 16 7.313 175.500 3.000 1.180 QUES13 16 7.000 105.000 2.667 1.447
QUES3 17 6.917 166.000 2.875 1.116 QUES3 17 6.500 97.500 2.600 0.910
QUES12 18 6.604 158.500 2.667 1.204 QUES2 18 6.400 96.000 2.533 1.246
Fig 5: Rank of question for Computer and Technical + Non-Technical Major

Mathias - 74
Pooled Indian Non-Indian <= 10 Years > 10 Years High School Graduate + Computer Technical +
+ Non-Tech
Experience Experience UnderGrad PhD Major Major

Rank Rank Rank Rank Rank Rank Rank Rank Rank
QUES18 1 2 4 1 2 6 1 1 1
QUES1 2 5 3 4 2 4 2
QUES17 3 6 1 4 3 4 3
QUES16 4 3 2 3 6 4
QUES5 5 3 4 5 5 2
QUES4 3 2 3
QUES7 1 1
QUES8 1
QUES14 7
QUES6 2
QUES10
QUES15
QUES11
QUES13
QUES9
QUES2
QUES12
QUES3
Fig 6: Top rank based on different group

Mathias - 75
Appendix 3: All Respondent
Fig 1: Companies whose business is Software Fig 2: There is Job Loss due to Outsourcing
50
45 45
40 40
35 35
Percentage
30 30
Percentage
25 25 All respondents
All respondents
20 20
15 15
10 10
5 5
0 0
e ee on ee re
e e e
re gr ini gr ee
gr
ee ion re re
sa
g
sa Op
A Ag sa
gr
sa pin Ag Ag
Di Di ly i i O ly
ly No ng D D
No ng
ng tr o gly ro
ro S ro
n St
S t St
Response Response
Fig 3: Companies whose business is not software Fig 4: Companies take risk by outsourcing
50
60 45
40
50
35
Percentage
40 30
Percentage
25 All respondents
30 All respondents
20
20 15
10
10
5
0 0
ee on e ee on e e
ee ni re re
e ee ni re re
gr gr pi Ag gr gr pi Ag Ag
isa i sa O Ag isa i sa O y
D l y D D l
ly
D
No ng ly No ng
ng ro ng ro
St tr o St
S tr o S
Response Response
Fig 5: Employees learn new skills to protect their

future
60
50
40
Percentage
30 All respondents
20
10
0
e e
ee gr
ee ion re re
gr in Ag Ag
isa sa Op
Di ng
ly
l yD No ro
ng St
ro
St
Response
Mathias - 76
Appendix 4: Asian Indian Respondent
Fig 1: Companies save cost due to outsourcing Fig 2: Companies whose business is Software
50
45 60
40
50
35
Percentage
30 40
Percentage
25 Indians
30 Indians
20
15 20
10
10
5
0 0
e ee e
ee re
e ion re r ee ee ion re re
e
gr g in Ag Ag gr gr in Ag Ag
sa sa Op sa sa Op
Di Di ng
ly Di Di ly
ly No ro ly No ng
ng St ng ro
ro ro St
St St
Response Response
Fig 3: Employees learn new skills to protect their

future.
70
60
50
P e rc e nta ge
40
Indians
30
20
10
0
e
ee ee on re ee
gr gr in i Ag gr
isa sa Op A
Di gl y
ly
D No ro
n
ng St
ro
St
Response
Mathias - 77
Appendix 5: Non-Asian Indian Respondent
Fig 1: Quality decreases due to outsourcing Fig 2: Productivity decreases due to outsourcing
60 60
50 50
40 40
Percentage
Percentage
30 Non-Indians 30 Non-Indians
20 20
10 10
0 0
ee re
e ion ee re
e
ee re
e ion re
e
re
e
gr in gr gr in Ag
sa
g A Ag sa
g Ag
i isa Op ly i isa Op ly
l yD D
No ng l yD D
No ng
ng ro ng ro
ro St ro St
St St
Response Response
Fig 3: Companies take risk by outsourcing Fig 4: Companies whose business is software
development uses outsourcing
50
45 50
40 45
35 40
Percentage
30 35
Percentage
25 30
Non-Indians
25 Non-Indians
20
20
15
15
10 10
5 5
0 0
on e e e e
ee ee re re ee ee ion re re
gr gr ini Ag Ag gr gr in Ag Ag
Di
sa
Di
sa Op ly sa sa Op
No ng Di Di ng
ly
gly ro ly No ro
n St ng St
ro ro
St St
Response Response
Fig 5: There is job loss due to outsourcing Fig 6: Companies whose business is not software
development uses outsourcing
45
40 50
35 45
40
30
Percentage
35
Percentage
25
Non-Indians 30
20 25 Non-Indians
15 20
15
10
10
5
5
0 0
e e
ee ee on re re ee ee on re
e e
gr gr in i Ag Ag gr gr in i Ag
re
sa sa Op sa sa Op Ag
i Di ng
ly
Di Di ly
l yD No ro ly No ng
ng St ng ro
ro ro St
St St
Response Response
Mathias - 78
Appendix 6: Less Experience Respondent
Fig 1: Companies whose business is Software Fig 2: Companies take risk by outsourcing
60
45
50
40
35 40
Percentage
30
Percentage
Less Experience
25 Less Experience 30
respondents
20 respondents
15 20
10
10
5
0 0
e re
e i on ee ee ee ee n
re
e e
re g in gr gr gr gr ni o Ag gr
e
sa
g sa Op
A A sa sa pi A
Di Di gl y Di Di O
g ly
ly No on ly No n
ng r ng ro
ro St ro St
St St
Response Response
Fig 3: There is job loss due to outsourcing Fig 4: Employees learn new skills to protect their
future
60
60
50
50
40
Percentage
40
Percentage
Less Experience
30 Less Experience
respondents 30
respondents
20 20
10 10
0 0
e ee on e e
ee ee on re re
e ee gr ni re re
gr gr ni gr pi Ag
sa pi Ag Ag isa sa Ag
isa Di O ly D Di O ly
y
D N o ng ly No ng
gl ro ng ro
r on St rt o St
St S
Response Response
Mathias - 79
Appendix 7: More Experience Respondent
Fig 1: Companies whose business is not software Fig 2: Companies whose business is Software
development uses outsourcing Development uses Outsourcing
60 45
40
50
35
40 30
Percentage
Percentage
More Experience 25 More Experience
30
respondents 20 respondents
20 15
10
10
5
0 0
ee n e n e
ee nio re re
e e ee nio re re
e
gr gr pi Ag re gr Ag
i sa i sa O Ag sa
g
i sa O pi Ag
D ly Di D g ly
D No ng No on
gly ro ng
ly r
r on St ro St
St St
Response Response
Fig 3: Employees choose a new career path due to Fig 4: There is job loss due to outsourcing
outsourcing
35
70
30
60
25
50
Percentage
Percentage
20 More Experience
40 More Experience
15 respondents
30 respondents
20 10
10 5
0 0
re
e ee nio
n ee re
e ee re
e on re
e
re
e
gr pi gr gr ni
isa
g
sa A Ag ag pi Ag Ag
Di O ly isa Dis O l y
l yD No ng y
D
No ng
ng tr o gl ro
ro S r on St
St St
Response Response
Mathias - 80
Appendix 8: Under-Graduate Respondent
Fig 1: Quality decreases due to outsourcing Fig 2: There is job loss due to outsourcing
60 50
45
50
40
40 35
Percentage
Percentage
30
30 25
20
20
15
10 10
5
0 0
ee on e e
ee gr ni re re ee ee on re
e
re
e
gr pi Ag Ag gr gr ni
Ag
isa sa sa pi Ag
D Di O l y isa Di O ly
ly No ng ly
D
No ng
ng ro ro
tr o St ng St
S S tr o
Response Response
Fig 3: Companies take risk by outsourcing Fig 4: Companies whose business is not software
40
35 50
45
30
40
Percentage
25 35
Percentage
Under-Graduate or 30
20 Under-Graduate or
Less respondents 25
15 Less respondents
20
10 15
10
5 5
0 0
ee gr e
e on gre e re
e ee gr e
e on gre e re
e
gr i ni gr i ni
i sa Dis
a
Op
A
y Ag i sa Dis
a
Op
A
y Ag
l l
ly
D No ng ly
D No ng
ng ro ng ro
ro St ro St
St St
Response Response
Mathias - 81
Fig 5: Employees learn new skills to protect their Fig 6: Companies whose business is Software
future Development uses Outsourcing
60 40
35
50
30
40
Percentage
Percentage
25
30 20
15
20
10
10
5
0 0
ee on e e n e
ee ni re re ee ee nio re re
e
gr gr pi Ag gr gr Ag
isa sa Ag sa is a pi Ag
D Di o
O ly i D O l y
N ng yD No ng
gly tr o ng
l ro
r on S ro St
St St
Response Response
Fig 7: Politicians use outsourcing for their own

advantage
50
45
40
35
P ercentage
30
Under-Graduate or
25
Less respondents
20
15
10
5
0
e ee on e e
re gr ini re re
g sa Ag Ag
isa Di Op
D No n gl y
ly ro
ng St
ro
St
Response
Mathias - 82
Appendix 9: Graduate Respondent
Fig 1: Companies whose business is Software Fig 2: Employees choose a new career path due to
Development uses Outsourcing outsourcing
45 70
40 60
35
50
30
Percentage
Percentage
25 Graduate or More 40 Graduate or More
20 respondents 30 respondents
15
20
10
5 10
0 0
ee ee n ee e
ee ee n ee ee
gr gr nio A gr re
gr gr nio A gr gr
sa pi Ag sa pi
isa Di O sa i O A
D No n gly D i D
No ng
ly
gly ro ng
ly ro
tr o
n St rt o St
S S
Response Response
Fig 3: Companies whose business is not software Fig 4: There is job loss due to outsourcing
60
70
50
60
40
Percentage
50
Percentage
40 Graduate or More
Graduate or More 30
respondents
30 respondents
20
20
10 10
0 0
re
e ee nio
n ee re
e
ee ee on re
e
re
e
gr gr gr gr ni
sa
g
sa pi A Ag sa pi Ag Ag
Di Di O ly isa Di O l y
ly No ng yD No ng
ng tr o gl ro
tro S r on St
S St
Response Response
Fig 5: Employees learn new skills to protect their Fig 6: Companies take risk by outsourcing
future
60
70
50
60
40
Percentage
50
Percentage
40 Graduate or More
Graduate or More 30
respondents
30 respondents
20
20
10
10
0 0
ee on e on e
ee re re
e
ee ee re e
gr gr ini Ag gr gr ini Ag
re
isa sa Op Ag sa is a Op Ag
D Di o ly i D ly
ly N ng ly
D No ng
ng ro ng tr o
tr o St ro S
S St
Response Response
Mathias - 83
Appendix 10: Computer Respondent
Fig 1: Companies whose business is Software Fig 2: Employees learn new skills to protect their
Development uses Outsourcing future
60 70
50 60
50
40
Percentage
Percentage
Computer major 40 Computer major
30
20
20
10 10
0 0
ee n e n e
ee nio re re
e
ee ee n io re ee
gr gr pi Ag gr gr pi Ag gr
i sa i sa O Ag sa i sa O A
D D
No n gly D i D
No gl y
ly ro ly on
ng St ng St
r
ro ro
St St
Response Response
Fig 3: Employees choose a new career path due to Fig 4: Companies whose business is not software
outsourcing development uses Outsourcing
60 70
50 60
50
40
Percentage
Percentage
Computer major 40 Computer major

30
20
20
10 10
0 0
ee n e n e
ee nio re ee ee ee nio re ee
gr gr pi Ag gr gr gr pi Ag gr
i sa i sa O A sa i sa O A
D D
No gly D i D
No gly
ly on ly on
ng St
r ng St
r
S tr o tr o
S
Response Response
Mathias - 84
Appendix 11: Technical or Non-Technical Respondent
Fig 1: Companies whose business is Software Fig 2: There is job loss due to outsourcing
50
40 45
35 40
30 35
Percentage
30
Percentage
25 Technical + Non-
Technical + Non- 25 Technical major
20 Technical major respondents
20
15 respondents
15
10 10
5 5
0 0
ee n e ee n e
ee gr nio re ee ee gr nio re ee
gr pi Ag gr gr pi Ag gr
i sa i sa O A i sa i sa O A
D D
No gly D D
No gly
ly on ly ro
n
ng St
r ng St
ro ro
St St
Response Response
Fig 3: Companies whose business is not software Fig 4: Companies take risk by outsourcing
60
40
50
35
30 40
Percentage
Percentage
25 Technical + Non-
Technical + Non- 30 Technical major
20 Technical major respondents
15 respondents 20
10
10
5
0 0
ee n e e n e
ee nio re re ee ee nio re re
e
gr gr pi Ag gr gr Ag
isa i sa O Ag isa sa pi Ag
D D ly Di O ly
ly No ng ly
D N o ng
ng ro ng ro
rt o St St
S S tr o
Response Response

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Offshore Outsourcing: Software Development Employee’s Perspective

University College University of Denver

MOTM 4901 Capstone

Aug 18, 2006

Upon the recommendation of the Department

The boom of the Information Technology started in the 1990’s,

the year 2001, all IT companies began to cut costs to reduce

expenses. As a cost cutting measure, offshore outsourcing was a

countries. As a result, jobs were lost both to recession and offshore

outsourcing. Different people have different perspectives on offshore

This paper studies the perspectives of software development

employee’s (non-Oracle employees) on offshore outsourcing by using

an anonymous survey. The survey focuses on the areas of job, quality,

country of origin, level experience, education level (graduate, under

important for each group and how they rank it.

PROBLEM STATEMENT AND RESEARCH QUESTION.............................................. 8

REVIEW OF LITERATURE ................................................................................. 9

RESEARCH DESIGN .......................................................................................14

QUESTIONNAIRE DESIGN ..............................................................................16

QUESTIONNAIRE ADMINISTRATION/IMPLEMENTATION ......................................19

FUTURE RESEARCH .......................................................................................61

APPENDIX 1: QUESTIONNAIRE .......................................................................67

APPENDIX 2: RANK .......................................................................................69

APPENDIX 3: ALL RESPONDENT ......................................................................75

APPENDIX 4: ASIAN INDIAN RESPONDENT .......................................................76

APPENDIX 5: NON-ASIAN INDIAN RESPONDENT................................................77

APPENDIX 6: LESS EXPERIENCE RESPONDENT..................................................78

APPENDIX 7: MORE EXPERIENCE RESPONDENT.................................................79

APPENDIX 8: UNDER-GRADUATE RESPONDENT .................................................80

APPENDIX 9: GRADUATE RESPONDENT ............................................................82

APPENDIX 10: COMPUTER RESPONDENT ..........................................................83

APPENDIX 11: TECHNICAL OR NON-TECHNICAL RESPONDENT ............................84

do business. To reduce cost, everything from customer service to software

development seemed to be outsourced. As a cost cutting measure, many

employees belonging to different companies saw their job being shipped

offshore. This brought many hardships to employees in the United States. In

(Dobbs 2004). This study focuses on the software development employee’s

perspective of offshore outsourcing.

Outsourcing was seen as a threat during the manufacturing

economy and of free trade. Companies manufactured goods cheaply so that

they could be competitive and be able to provide less expensive products to

customers. Companies focused on importing goods from cheap labor market,

manufacturing, lost market share to foreign imports, causing the US trade

world’s biggest creditor nation to being its biggest debtor.

The Internet age has made software development outsourcing to

of which 62% is exported to United States. This exports accounts to almost

80% of the growth. (Bardhan et al. 2004).

gives more of those numbers and some projections.

Profession 2003 By 2005 By 2010 By 2015

Table 1: Projected number of U.S. jobs to be moved offshore, by

use good statistics to prove their point, whereas there is no representation

(2005) finds that NASSCOM – the Indian National Association of Software

and Service Companies represents 95% of the outsourcing vendors in India.

McKinsey Company has a good relationship with NASSCOM, and McKinsey

publishes a report on which companies and politicians around the world

heavily rely. This report portrays how outsourcing is a win-win game.

Buchholz (2004) blames legal, tax, education, and immigration policies as

finds that the healthcare industry is getting so expensive that some

radiology work is also shipped to India to be done overnight (United States)

a hypothetical situation where efficiency can soon be a problem. For

example, US counterparts assign’s a job to offshore development to be done

reverse Outsourcing or so called In-sourcing.

Gold (2005) shows a list of 20 India based and 10 US based offshore