1. ¹Department of Informatics, Copenhagen Business School, Frederiksberg, Denmark
2. ²Department of Information Systems, ESADE, University of Ramon Llull, Barcelona, Spain
3. ³Center for Applied ICT, Copenhagen Business School, Frederiksberg, Denmark

Correspondence: J Wareham, Department of Information Systems, ESADE, University of Ramon Llull, Av. Pedralbes 60-62, Barcelona 08034, Spain. Tel: +34 932 806 162; Fax: +34 932 048 105; E-mails: wareham@acm.org, Jonathan.wareham@esade.edu

Abstract

The tendency of acquiring information systems and other high technology services from international suppliers continues at unprecedented levels. The primary motivation for the offshore sourcing of technology and services continues to be labor cost arbitrage, and secondly, access to higher levels of expertise. Yet paradoxically, large gaps in technical proficiency, cultural values, and communication styles between client and vendor can undermine the overall success of the offshore relationship. This paper argues that a new breed of entities have emerged, brokering or intermediating offshore relations. The capabilities of such 'middlemen' include moderating disparities in expertise, culture, and communication styles that often deteriorate performance in offshore relationships. The paper presents a preliminary theoretical justification for the emergence of offshore intermediaries, describes how and why they develop boundary spanning capabilities, and offers a case study as initial evidence substantiating the function and processes in intermediating transnational offshoring relationships. Our theory development concludes with propositions concerning four major offshore intermediary capabilities: (i) intermediating cultural distance, (ii) intermediating cognitive distance, (iii) pre-contractual preparation and negotiation, and (iv) post-contractual operational management.