| Outsourcing is a popular topic in the contemporary business administration around the world. Since Gary Hamel and C. K. Praharad first proponed the concept of outsourcing in Harvard Business Review in 1990, many scholars have been on this research field. So far some essays have defined the concepts of outsourcing, pointed out the risks of outsourcing and evaluated the welfare effect of outsourcing. Outsourcing takes place when organizations transfer the ownership of a business process to a supplier. The root of outsourcing can be traced to 1960s. In 1963, American government imposed a policy named Production Sharing Scheme, which encouraged the enterprises to outsource the labor-intensive products and productions overseas. Owing to rapid growth of multinational corporations (MNCs) in 1980s, some non-core business activities were widely outsourced to developing countries because of MNC's refocusing strategies. Until the late 1980s, increases in information technology (IT) efficiency were sought from the hiring of contract programmers, the use of predefined application packages, and from specialized processing services. IT outsourcing became highly visible, received a lot of attention, and turned into an established concept after Kodak's decision to outsource their IT functions in 1989. Since 1990s, software has been a key element in the increasing use of information and communication technologies, and the 21st century will see the emergence of a service-based economy in which every conceivable element will be either software-enabled or software-constrained. The amount of global service trade increased from 825 bn$ in 1981 to 1570 bn$ in 2003 according to World Trade Organization (WTO). Today, the focus in outsourcing has widened from technical to service management and relationship management issues, such outsourcing activities as IT outsourcing, software outsourcing and offshore service outsourcing are in the mainstream. The global application software outsourcing service market is growing at 29.2 percent per year and it will reach 20,000 bn$ in 2010 estimated by International Digit Corporation (IDC).As software becomes more and more critical to products and services, and as most businesses become software dependent, developing and capitalizing a strong software capability is increasingly the mantra for competing in the new economy. Different nations are now competing for huge software business opportunities to fuel their economic growth. China has taken advantage of the first globalization process characterized simple production depending on the large domestic market, low labor cost and strong production capability. Nowadays the second globalization process characterized software industry is accelerating the transfer of knowledgeable positions from developed countries to developing countries. This is a great opportunity for those nations devoting to information industry. China should take use of this chance to benefit from the offshore service outsourcing and realize the optimization of software industry structure and improve the software exports. Consequently, this is the incentive for this dissertation.By far only a few literatures can be available in the research field of service outsourcing compared with a lot of literatures on production outsourcing. In addition, such literatures often concentrate on the research of productivity and employment of service outsourcing. There is no literature on offshore software outsourcing from the point view of supply chain at present. Actually for over a decade there has been an increasing interest in the use of supply chain methods to improve performance across the entire business enterprise. In addition to individual companies, numerous industries have recognized the importance of supply chain integration. Owing that supply chain exits all over the industries, the theory of supply chain management also can be used to analyze the supply chain of offshore software outsourcing in order to share the benefits and risks along the supply chain. International software outsourcing involves subcontracting software development and related activities to third parties abroad. Therefore, this dissertation focuses on the process decision making during the creation and execution of service supply chain of offshore software outsourcing so as to provide some feasible strategies for Chinese software companies. This dissertation develops the whole framnework based on quantitative and qualitative methods, theoretical, comparative and empirical study, etc. It mainly puts forward the principle of supply chain into offshore software outsourcing and presents the difference among three concepts, i.e. IT outsourcing, software outsourcing and international service outsourcing. Apart from the above theoretical analysis, this dissertation also depicts the status quo of the service supply chain of offshore software outsourcing China involved in. Moreover, this dissertation makes a comparative analysis depending on the author's visiting experience in India from Oct. 2004 to Oct. 2005. In a word, this dissertation tries to solve five problems, i.e. what is offshore software outsourcing? What is the service supply chain of offshore software outsourcing? And what is the structure of this kind of supply chain? How to create the service supply chain of offshore software outsourcing? And how does the service supply chain of offshore software outsourcing operate?The innovation of this dissertation lies in three aspects, first innovation comes from the concept of service supply chain of offshore software outsourcing and software outsourcing index. Second innovation comes from an empirical analysis on the structure and capabilities of the supply chain which China engaged in based on statistical analysis and five-force model, etc. Third innovation comes from a series of decisions making after the synthetic utilization of analytic hierarchy process (AHP), data envelopment analysis (DEA) and static game theory,This dissertation includes eight chapters. Chapter one presents the background and framework of this dissertation. Chapter two propones the concept of offshore software outsourcing and analyzes its characteristics and distinguishes three related concepts, i.e. IT outsourcing, software outsourcing and offshore service. Chapter three describes the structure of the service supply chain of offshore software outsourcing. Chapter four makes an empirical analysis on service supply chain of offshore software outsourcing China involved in. Chapter five points out the key elements during the creation of supply chain of offshore software outsourcing, e.g. information, price and channels. Then makes a series of decisions making based on quantitative methods. Chapter six focuses on the execution of service supply chain of offshore software outsourcing and emphasizes time and quality management capability based on quantitative methods. Chapter seven gives some suggestions on Chinese government controlling software industry and software enterprises in the view of improving supply chain management. Chapter eight summarizes the conclusions from the above analysis and prospects the future study.
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