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Information technology (IT) outsourcing by business process outsourcing/information technology enabled services (BPO/ITES) firms in India: A strategic gamble

Shrinivas Patil (ICT, MCS, Mumbai, India)
Winai Wongsurawat (College of Management, Mahidol University, Bangkok, Thailand)

Journal of Enterprise Information Management

ISSN: 1741-0398

Article publication date: 9 February 2015

Abstract

Purpose

The purpose of this paper is to understand the roles various drivers such as cost, strategy and risk play when business process outsourcing/information technology enabled services (BPO/ITES) firms in India outsource their information technology (IT) functions to third-party vendors. If all key drivers associated with IT outsourcing were understood, and such knowledge of those variables was incorporated into the reasons for outsourcing, there would be a greater probability of a successful outcome.

Design/methodology/approach

A “hybrid” (quantitative and qualitative) research methodology was used to gain insight into the IT-outsourcing paradigm by BPO/ITES firms in India. A structured questionnaire related to IT-outsourcing activities conducted from 1999 to 2010 was distributed to nine firms. The resulting data were then analyzed. In addition, two Indian BPO/ITES firms that had outsourced their IT to a third-party vendor to cut cost generously granted in-depth information into their IT-outsourcing paradigm and life cycle.

Findings

IT outsourcing is perhaps more complicated than other types of outsourcing. Focussing purely on cost is very risky. Practitioners need to take all three drivers – cost, strategy and risk into consideration. Any degradation of services or responsibilities due to IT outsourcing would mean a very unhappy client or even loss of business.

Originality/value

BPO/ITES firms in India tend to focus only on cost reduction from IT outsourcing without taking into consideration other equally important drivers such as strategy and risk. This paper counsels a holistic approach toward IT outsourcing for a successful outcome. In addition, an IT-outsourcing framework and guide is proposed for practitioners.

Keywords

Citation

Patil, S. and Wongsurawat, W. (2015), "Information technology (IT) outsourcing by business process outsourcing/information technology enabled services (BPO/ITES) firms in India: A strategic gamble", Journal of Enterprise Information Management, Vol. 28 No. 1, pp. 60-76. https://doi.org/10.1108/JEIM-09-2013-0068

Publisher

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Emerald Group Publishing Limited

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