Research Objectives: Increasing cost-consciousness in the telecommunications industry drives network vendors to seek more cost-efficient solutions for delivery. The purpose of the study is to describe and evaluate how internal offshore activities are managed in the managed services market of the telecommunications industry and how cost accounting methods support this management. The theoretical part of the research aims to present offshoring as a global strategy and solution to improving business.
Motivation for the Study: The trend of offshoring, initially developed in the manufacturing sector decades ago, has permeated the service sector with force (Zeynep & Masini, 2008). According to various sources (Barrar & Gervais, 2006; 303, Bhidé, 2008, 153), more than half of the American Fortune 500 firms and a large number of Western European and Japanese firms offshore services. European and US firms are confronted with increasing competition from overseas firms and as a result increasingly offshore their operations to countries that offer significant labor cost advantages (Farrell, 2004). A key enabler of offshoring services has been the developments in information and communications technology (ICT) within the last decade: Internet, broadband, and digitalization, which have greatly reduced the challenges of distance and geographical location in doing business (Lewin & Peeters, 2006a)..
Click here to read more on Cost Accounting Perspective