The Value Proposition of Captive Offshore Development Centers: Exploring the Role of IT Capabilities and Antecedent Factors

摘要

Increasingly, organizations establish off shore captive centers to exploit the large IT labor pool and to retain proprietary knowledge. However, a key management issue facing these organizations is one of realizing value beyond economic cost advantages from its captive centers. To address this issue, we adaptedVenkaraman's value center concept and the global subsidiary evolution model to this context. Using the data gathered on the evolution of captive centers of GLOBALIS, a large US financial services firm, we explored the role of IT capabilities and antecedent factors on captive center's value proposition. Our findings indicate that headquarters assignment of responsibilities and captive center's choice of activities lead to the development of distinct human, technological and relationship capabilities that enable a captive center to generate superior value for its parent IT organization. This study extends prior research in IS outsourcing, and has important implications for researchers and practitioners alike.