| Title | Software industry in okinawa: Is 'domestic offshore outsourcing' scheme feasible? |
|---|---|
| ID_Doc | 66473 |
| Authors | Kato, A |
| Title | Software industry in okinawa: Is 'domestic offshore outsourcing' scheme feasible? |
| Year | 2014 |
| Published | Computer Systems Science And Engineering, 29, 1 |
| Abstract | In Japanese software industry, one critical question evoking much debate these days is how the local IT firms can promote sustainable business models through domestic outsourcing. In Japan, the major enterprise software customers are concentrated in and around Tokyo Metropolitan Area, and most local Japanese software firms dispatch engineers to their onsite development base. However, this Dispatch Model is vulnerable to cost reduction requests and is not conducive to fostering manpower in the form of skilled engineers in local IT industrial clusters. This paper undertakes a case study of Okinawa prefecture, where vigorous measures have been taken to promote IT services industry. It examines factors critical to further development of the IT services industry in terms of Porter's Diamond Framework. The results reveal that most of these factors are related to domestic offshore outsourcing, which is indispensable for human resource (HR) enhancement, collaboration with high-end customers, and creation of a synergy effect with related and supporting industries in the IT sector. However, it is important to assess how far it is feasible. The paper uses a cash flow model and evaluates the profitability of domestic offshore outsourcing through Monte Carlo simulations and, based on the conference discussion, clarifies the regional as well as general factors in Japanese IT industry. |
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