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IT-enabled service offshoring has become a vital and widespread practice for firms seeking to realize various advantages. However, many firms suffer from “hidden costs” (the discrepancies between the expected and actual costs of offshoring), and these firms often find a disappointing outcome from their offshoring decisions. The purpose of this paper is to explore whether and how the adoption of an offshoring strategy can reduce such hidden costs and how this effect can be moderated by contextual factors, including the complexity of tasks and the accumulation of experience.

Based on survey data from the Offshoring Research Network, this study uses hierarchical regression analysis to empirically test the hypothesized relationships.

A corporate-wide strategy for guiding offshoring decisions may effectively reduce cost-estimation errors. This effect is amplified by increasing task complexity, but decreases with growing offshoring experience. Regardless of whether a strategy is initially in place, most firms learn to avoid cost-estimation errors only after several years. This finding suggests that firms have a limited ability to mitigate hidden costs in the short term.

The guidelines specified by an overarching strategy can better rationalize cost estimation and goal setting for individual offshoring projects, provide incentives for project participants to achieve preset aspirations, and enhance cost-efficiency in fulfilling offshoring activities and in coping with emerging contingencies. Firms tend to benefit more from establishing a formal strategy to reduce the hidden costs of more complex projects, especially if the firms involved have little offshoring experience.

This study empirically examines the hidden costs in offshoring from a strategic management perspective. This approach extends our understanding of cost estimates in offshoring, and it explores the influence of corporate strategy in the alignment of expected and achieved performances from IT-enabled service offshoring. The study also examines the boundaries of strategy’s ability to affect hidden costs, and it expands our knowledge of the relationship between strategy and experience.

This paper aims to carry out a qualitative analysis to compare India and China as a choice of service-provider from the perspective of Japanese MNEs for information technology (IT)-IT enabled services (ITeS) offshoring destination, using the four dimensions of the cultural-administrative-geographic-economic (CAGE) distance framework by Ghemawat (2001).

This exploratory study used a mix of primary and secondary evidence to carry out a comparative evaluation of the challenges and synergies existent between India and Japan relative to China and Japan, in the context of IT-ITeS offshoring industry. Fourteen semi-structured interviews were conducted with multiple stakeholders and the findings were classified using the CAGE framework.

The paper discusses that for IT-ITeS industry, owing to its characteristics and the changing global order in the post-pandemic world, the “distances” that matter the most for business engagement between countries are – cultural, administrative and economic. Based on the comparative analysis, it was seen that China fares better than India, from a Japanese perspective, for the case of cultural and geographic distances while India had an advantage in the case of administrative and economic distances. Thus, India and Japan seem to have higher synergies and potential mutual gains by expanding engagement in the IT-ITeS industry in future.

One of the limitations of this paper was the lack of comparable secondary data source concerning the size, growth rates, exports, employment figures for China that could have helped establish the contrast in the structure of IT-ITeS industry of India and China.

This study provides a framework for a comparative analysis of multiple facets of “distance” between competing service providing nations at bilateral, as well as unilateral level, in a holistic manner for the IT-ITeS offshoring industry. The results thus provide the gaps that shall be bridged by the policymakers for realizing mutual benefits.

Nowadays, especially after the recent financial downturn, companies are looking for much more efficient and creative business processes management. They need to place better solutions on the market in less time and with lower costs. Companies are achieving these goals of efficiency always more by using the offshoring strategy. It commonly describes a company’s relocation of a business process from one country to another, typically manufacturing processes towards low-cost countries (Brazil, Russia, India, China and South Africa – BRICS area). The purpose of this paper is to propose a methodological approach based on project management tools that supports the decision-making process in order to help companies in optimizing the re-engineering production processes and improve management costs. The framework provided in this paper is grounded on available literature and from the authors’ personal experiences in managing several projects.

This paper seeks to propose a Project Management Process Reengineering performance model (PMPR) for managing projects of reengineering of processes and applies it in a real case study concerning the relocation of an automotive glass production line.

The model proposed in this paper should serve as a valuable tool to facilitate a successful BPR design in the project management and intends to assist companies as they operate projects of transferring and optimizing production lines.

This paper proposes a PMPR model with a methodological approach which integrates efficiency and effectiveness estimators applicable to company needs. Thus, the aim of the paper is to develop a methodology and technical approach for the redesign and realization of a production line in consequence of its relocation.

The purpose of this study is to develop a research agenda on internal controls for offshored accounting processes. It further develops a linkage between internal controls of offshored accounting processes and auditing of the organization. Offshoring of accounting processes has become a common business practice, pursued by firms to reduce costs and focus on core competencies. However, our understanding about internal controls of these offshored processes is limited.

Grounded in theory that is supported by prior literature and interviews with practitioners, this paper attempts to develop a research agenda on internal controls for offshored accounting processes.

The main findings of our study suggest that while offshoring saves costs and allows the clients to focus on their core competencies, it also poses risks to the clients’ organizations. To mitigate these risks and comply with the regulatory requirements of the countries where the clients are located, clients and their offshore vendors need to effectively establish adequate internal controls for offshored business processes. Clients should seek those vendors who have appropriate processes in place and are willing to provide Service Organization Control (SOC) reports (or at least are capable of getting a SOC report in the near future). Moreover, clients should avoid offshoring the processes that would exist in defective internal control systems. Similarly, vendors should avoid undertaking those processes for which they are incapable of maintaining efficient internal controls.

Our study has implications for academicians as well as practitioners on understanding the determinants and consequences of internal control for offshored processes.

While internal controls for offshored accounting process and related regulatory changes have been increasingly important topics, little research has been devoted to explore their implications on accounting and auditing literature. We attempt to bridge this gap by synthesizing prior research on internal controls and auditing, and further developing a set of research questions for academic research. Our hope is to spur a new area of research that has not been explored before.

This paper aims to investigate how the professional service outsourcing (PSO) firm’s external knowledge integration with global clients, internal integration across various functional units and the synergistic effects between them in improving PSO performance.

Drawing on the theory of organizational learning, a conceptual framework is proposed with hypothesized relationships. The relationships in this conceptual model were tested using a structural equation model (SEM) to analyze a survey dataset including 192 Indian-based professional service providers.

A service provider’s performance is positively associated with its external integration with global clients and internal integration across various functional units. Synergistic effect is generated from balanced high-level external and internal integration in improving PSO performance.

This study contributes to the much-needed efforts in studying PSO, a new and fast-growing cross-border professional service activity, and provides helpful managerial implications to practicing global clients and offshore PSO service providers on how to successfully manage and govern the outsourcing process to achieve expected benefits.

This study focuses on offshore service provider’s viewpoint to extend traditional supply-chain integration regarding cooperative and mutually beneficial mechanisms to the context of PSO.

The issue of offshore outsourcing of healthcare services is a critical but little‐examined problem in healthcare research. The purpose of this study is to contribute to filling this void.

A library‐based study was carried out of the development of the Indian medical transcription offshoring industry.

Cost‐saving potential and the degree of outsourceability are higher for medical transcription compared with most services. Offshoring experience, typically in a low‐value BPO, helps to enhance productivity and international linkages required for the success of medical transcription.

An important area of future research concerns comparing India's factor endowments in medical transcription outsourcing with other services. Further research is also needed to examine how India differs from its regional competitors in terms of factors endowments associated with these services. Another extension would be to investigate the drivers of offshoring of higher value services such as radiological readings.

ICT infrastructures needed for outsourcing require much less investment compared with leading capital‐intensive industries. The development patterns of the Indian medical and offshoring industries indicate that India may attract higher skilled medical functions in the future. The Indian offshoring industry is shifting its focus from BPO to knowledge process outsourcing (KPO). Developing countries need to shift to greater automation and greater levels of skill training to retain and reinforce their comparative advantages.

This paper's greatest value stems from the fact that it examines the drivers of a new but rapidly growing healthcare industry.

Offshore outsourcing offers competitive advantages when goods and services are produced economically and with acceptable or superior quality by suppliers located outside a firm's home country. The purpose of this paper is to focus on India as a destination for offshore outsourcing of services and the challenges it faces in maintaining its leadership in this area. The paper discusses the growth of services outsourcing and the economic and environmental forces that have contributed to the outsourcing of high‐end services, also known as knowledge process outsourcing (KPO).

This article surveys the literature of offshore outsourcing and identifies strategic drivers and options that can help India to grow and consolidate its position as an exporter of services and build long‐term competitive advantages in its relationships with global partners. To understand why nations gain competitive advantage in certain industries, Porter's “diamond” model is utilized as a broad framework for examining policies and national strategies that can sustain India's competitive advantage in outsourcing of knowledge‐based services. The paper discusses India's current and prospective assets and liabilities that correspond to the model's four components.

The article discusses India's competitive edge as a leading supplier of knowledge‐based services and proposes a model for sustaining this edge. The model proposes key policy steps to move from the current position (e.g. supplier of business process outsourcing services) to a role of knowledge leader by providing advanced value added services to global clients. This model suggests ways in which a supplier nation can gain leverage in the value chain.

The article is conceptual, not empirical. Public and corporate policy implications are presented to strengthen India's competitive advantages in outsourced services.

The article presents a strategic roadmap with policy implications that can help move India up the value chain from being primarily a destination for low‐end business process outsourcing (BPO) to that of a co‐equal, high value‐adding partner or principal who offers knowledge leadership in the design and delivery of services for global markets.

The article discusses a nation's technical strengths, as well as cultural and infrastructure weaknesses, that can contribute to volatility as a global outsourcing leader. The article also presents strategies that can reduce a nation's vulnerabilities to competitive actions.

While the implications of outsourcing have been extensively studied from the point of view of the developed country multinational corporation (MNC) and its home economy, far less attention has been paid to the developing country firm (DCF) participating in the outsourcing collaboration. This article aims at presenting, evaluating, and synthesizing a number of theoretical contributions that may help build an agenda for future research on outsourcing from a DCF perspective.

Through a review of the extant theoretical literature on outsourcing, the article seeks to explicate a DCF perspective on outsourcing.

The article argues that although several theoretical domains indirectly shed light on outsourcing from a DCF perspective, they are typically approaching the issue from a macro (country) and meso (industry) level perspective and rarely explicitly apply a micro (firm) level perspective. Moreover, they tend to view DCF strategy in outsourcing collaborations as functions of MNCs' strategies, not as strategies in their own right. In order to fill this apparent lacuna in the outsourcing literature, the article reviews a number of theories that may help building a research agenda on outsourcing from a developing country perspective.

The article contributes to the outsourcing literature by explicating a DCF theoretical perspective on outsourcing.

The purpose of this paper is to investigate the effect of the organizational reconfiguration of offshoring on firms’ strategies. A consequence of offshoring is the need to reintegrate the geographically relocated organizational activities into a coherent organizational architecture. In order to do this, firms need a high degree of architectural knowledge, which is typically gained through learning by doing. We therefore argue that firms with more offshoring experience are more likely to include organizational objectives in their offshoring strategies. We develop and find support for this hypothesis using a mixed-method approach based on a qualitative case study and comprehensive data from the Offshoring Research Network. These findings contribute to research on the organizational design and architecture of offshoring and the dynamics of organizational architectures.

Driven by Western companies' requirements for efficiency and effectiveness, a trend towards outsourcing of business activities to India and other low‐cost countries commenced in the early 1990s and has continued to grow at a surprisingly fast pace. In a relatively short timeframe India has become a global hub for back‐office services, although the effect on the urban cities is yet to be fully comprehended. As American and European companies continue to relocate their information technology services and other back office works to the subcontinent, there has been a considerable flow‐on effect on Indian corporate real estate. This paper addresses two key questions. Firstly, the factors important for Western companies' outsourcing of organisational activities to India, and secondly, the effect of business outsourcing on corporate real estate locational requirements in India. A survey of corporate real estate representatives in India and the UK was conducted with the results providing an insight into the present state and possible future direction of outsourcing for India. This research presents a unique insight into the impacts of Western business outsourcing on corporate real estate in India, and presents findings that are useful to both organisations seeking to relocate business activities to India and for property market analysts looking to understand drivers behind this sustained demand for Indian corporate real estate.