This study discusses information technology outsourcing to offshore locations; it focuses on the case of Morocco as an IT services provider for an increasing number of European organizations. The study was motivated by the importance that took the phenomenon of offshoring over the last years and how its significant increase has influenced the organizational models of businesses in both vendor and client countries.
While places such as India and China has became classic destinations for most outsourced software projects from the West, new countries are positioning themselves to multinationals with some success. Morocco is now home to back-office processing centres that perform work for a number of major French and Spanish companies requiring fluent speakers of their home languages. And according to a research by the McKinsey Global Institute, from 2003 to 2018, business process offshoring in Morocco could add 0.3 percent annually to its GDP growth, reduce its international trade deficit by around 35 percent, and create a total of some 100,000 new jobs (Taoufiki et al., 2005).
This research investigates the practice of offshore outsourcing in IT services and tries to identify the main drivers that persuade organisations in developed countries to adopt it. It also aims at understanding the factors that influence the choice of the offshoring locations. The research employs a series of interviews, backed by discussion of the literature. The organisations selected for the study have been involved in IT projects offshored to Morocco in the last few years and my questions were aimed at identifying the motivation behind their initial outsourcing decision and understanding the process of selecting and evaluating the opportunities they had at different stages of the decision making. My questions were also intending to examine whether these companies achievements match with their initial expectations.
Through outsourcing clients reduce costs, eliminate backlogs and improve production quality and document availability. This allows the enterprise to focus on its core business, to grow without hiring additional personnel, leasing additional office space and to confront the rapidly changing technology and the evolution of costly hardware and software. The information technology has enabled the growth of this practice and its use at an international level. And while the offshoring is not a new phenomenon, the reasons for it have changed over the years from an emphasis on cost reduction to more strategic goals. My findings are that while standardized jobs were the initial focus of offshoring, global competition in higher-end skills, such as research, is increasing. I also found that many companies consider nearshoring, which consists on switching work to foreign sites that are costlier but closer, as a better option as it is easier to integrate with current operations for supply-chain security and rapid customer response. And the final study finding is that, to stay competitive in a global IT environment and industry, a developed country, like Morocco, must adopt policies that foster innovation. To this end, policies that improve a country’s ability to attract, educate, and retain the best IT talent are critical.