The Phenomenon of Virtual Migration: A Study of Indian and Taiwanese Software & ITES Industries

• Main Authors: Chia-Hung Wu, 吳佳鴻
• Other Authors: 陸大榮
• Format: Others
• Language: en_US
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/10520021895600883249

碩士 === 國立中興大學 === 科技管理研究所 === 97 === When an enterprise seeks assistance from outside the company or redefines its core ability boundary, outsourcing is one of the most often used strategies. There are several types of outsourcing that differ in the following aspects: degree of how much to contract-out, geographic dimensions, or in the extent of supplier interaction. In 2006, Professor Aneesh of Stanford University proposed a term for a new business phenomenon: virtual migration. It is the virtual flow of labor, referring to workers who are physically in branches of U.S offshore companies or in contracted local companies in foreign countries but that work directly on mainframes located in the U.S. This phenomenon is possible in this information era because IT plays an important role as a service-enabler. At present, virtual migration has allowed Indian technological industries, especially the software sector, to fully explore the benefits of outsourcing and exploit their enterprises’ core capabilities. This research discusses how virtual migration is utilized by Indian and Taiwanese software and IT-enabled service (ITES) industries, including their current status and future development. Although Taiwan and India are both favorable strategic places for outsourcing, compared to the ICT industry, the development of Taiwanese software and ITES industries is slower. This study provides suggestions and solutions to these IT industries in India and Taiwan and gives policy recommendations to both governments for their industrial and economic development. The study uses a variety of sources, including interviews with industry leaders and practitioners, research literature and secondary data collection to study the Indian and Taiwanese software and ITES industries. This study suggests that industry upgrading to higher levels of the value chain through appropriate strategies is necessary. As for Indian software industry, offering more value-added services, entering physical product markets, and providing e-commerce service via Internet will help them open new markets as well as enhance existing niches. As for Taiwanese software industry, leveraging the ICT industry, providing more services and enhancing brand equity will assist them to be more successful. This study concludes that if software firms can take advantage of virtual migration, they will be more able to enhance their development capabilities and generate more business and revenue streams. Nevertheless, virtual migration has caused some social problems in India and Taiwan such as brain drain, different reward systems for engineers. Besides a “shadow phenomenon” that ICT industry takes most resources and causes a shortage in software development talents is a serious problem for Taiwanese software industries to develop. These social structure issues are the trade-offs and barrier if the industry is to prosper, and should be taken into account seriously.