A preliminary structure of software outsourcing vendors’ readiness model Siffat Ullah Khan (author), Mahmood Niazi (supervisor) School of Computing and Mathematics, Keele University, ST5 5BG, UK s.khan@epsam.keele.ac.uk {siffat7@yahoo.com} , mkniazi@cs.keele.ac.uk ABSTRACT CONTEXT – Offshore software development outsourcing is a contractual business of high quality software production at offshore destinations with significant cost-saving. Vendor’s readiness plays an important role in the successful outcomes of outsourcing projects. OBJECTIVE – The objective of this paper is to describe the preliminary structure of software outsourcing vendors’ readiness model (SOVRM). METHOD – In order to develop SOVRM, we have performed systematic literature review (SLR) to identify critical success factors (CSFs) and critical barriers (CBs). To validate SLR findings and to find practices for the identified CSFs and CBs a questionnaire survey was conducted in the outsourcing industry. Case study approach was used for the evaluation of SOVRM. RESULTS – The SOVRM has been developed to assist software development outsourcing organisations in measuring and improving their outsourcing readiness prior to start outsourcing activities. CONCLUSIONS – SOVRM is a useful tool for offshore software development outsourcing vendors in assessing their readiness for offshore outsourcing activities. Vendors should address each CSFs and CBs in order to achieve a certain SOVRM level. Categories and Subject Descriptors D.2.9 [Software Engineering]: Offshore Software Outsourcing General Terms Outsourcing, Readiness Keywords Offshore Software Outsourcing, Vendors’ Readiness 1. MOTIVATION Software development outsourcing is simply defined as the transfer of software development work outside the client organisation. Software development outsourcing is a contractual business between client and vendor organisations in which a client(s) contracts out all or part of its software development activities to a vendor(s), who provides agreed services for remuneration [1]. Offshore software outsourcing is dramatically changing the business economics in the overall outsourcing industry due to the availability of skilled human resource and provision of high quality software at low cost [2]. Due to the growth in free markets of globalization and advancements in information and communication technologies, organisations have to consider taking advantage of outsourcing strategies, not only to utilize the cost advantages but also to benefit from the improved quality that offshore vendors provide [3]. Client organisations are outsourcing more software development activities than ever before [4]. Many firms in the US have outsourced their software development projects to offshore countries for gaining better quality IT services at comparatively cheaper rate and in a shorter time period [5]. India was the first outsourcing destination and is still leading the outsoaring industry [2]. Many Indian vendor organisations are creating global reach (overseas offices) in Northern Ireland in order to offer services to those European clients who desire onshore or nearshore presence [2]. However, new outsourcing destinations are emerging which may offer a better deal to clients [2]. India, Philippines, China, Ireland and Brazil are ranked as the top 5 mature outsourcing destinations where as the report predicts Canada, Russia, Mexico, Vietnam and Poland as the next 5 emerging offshore destinations [6]. In addition, more than half of all CMM level 5 companies in the world are located in India [7]. These trends show that a software quality standards and models certification is used as one of the criteria in the selection of software development outsourcing vendors. This trend has led to a realisation that the organisations (vendor) readiness for software development outsourcing plays a vital role in the selection of software development outsourcing vendors. This research focuses on the need to gain an in-depth understanding of the range of criteria used by the software development outsourcing clients for the selection of software development outsourcing vendors. Understanding the selection criteria will help software development outsourcing vendors in addressing those criteria in order to be fully ready for software development outsourcing initiatives. This may also help to ensure the desired outcomes of offshore outsourcing projects and durable relationships between client and vendor organisations. This paper is organised as follows. In Section 2 aims and objectives are described. Section 3 describes the research methodology. In Section 4 the preliminary structure of SOVRM is described with some discussion. 2. AIMS AND OBJECTIVES The objective of this research project is to empirically explore the viewpoints and experiences of outsourcing experts regarding software development outsourcing and to develop a model in order to assist outsourcing vendor organisations in measuring