Vendor capability for offshore IT projects: Analysing a case in Indonesian context

Offshore IT outsourcing has been very popular in the last 20 years as the companies want to concentrate more on its core business processes. According to A.T. Kearney Global Position Index for the year 2011, Indonesia ranks fifth in terms of attractiveness as an offshore IT outsourcing service provider. To enhance the competitiveness of the IT companies in Indonesia, a good understanding of the capabilities that need to be developed by the Indonesian IT vendors in supporting the success of IT outsourcing projects is needed. This study aims at evaluating the capability level of Indonesian IT vendors in supporting an offshore IT project, in different aspects of capabilities. Based on models developed in the earlier studies, an evaluation framework to measure the capability of Indonesian IT vendors was further developed, by adding one new capability which is associated with the vendor´s ability to adapt to market conditions. A survey method is used to collect empirical data. Until the moment this paper was submitted, data collection is still being executed. From the results of empirical research involving 8 Indonesian IT vendors which had worked on offshore projects, a descriptive analysis of different aspects of vendor capabilities is presented. From the empirical study it was found that Process capability is the capability which is considered very well managed and get the highest score among all the capabilities. Domain Knowledge and Service Delivery capabilities are capabilities that are necessary to be paid attention among the other capabilities.