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Article
Publication date: 5 September 2016

Martina Gerbl, Ronan McIvor and Paul Humphreys

The purpose of this paper is to develop a framework that incorporates both firm- and process-level factors for understanding location distance choice in the business process

3176

Abstract

Purpose

The purpose of this paper is to develop a framework that incorporates both firm- and process-level factors for understanding location distance choice in the business process outsourcing (BPO) decision.

Design/methodology/approach

The research involved undertaking in-depth case study analysis of a number of BPO decisions in six German companies, and employing transaction cost economics (TCE) and the resource-based view (RBV) as a theoretical basis.

Findings

The findings have shown that existing literature in the operations management (OM) literature does not provide a complete understanding of the complexities of location distance choice in the BPO decision. This decision requires an understanding of a range of factors at both the firm- and process-level. The findings here enhance the understanding of how these factors interact to influence the potential distance options.

Practical implications

The findings have shown how organisations can influence the factors that affect the location distance choice including modularising business processes, developing outsourcing capabilities, and supplementing internal skills in areas such as cultural management and performance monitoring.

Originality/value

This is one of the first studies in the OM field to analyse how organisations make the decision in relation to local, nearshore, and offshore location distance options. The paper has highlighted the importance of OM concepts such as performance management and continuous improvement to this phenomenon, and the paper has offered a number of important areas for further research.

Details

International Journal of Operations & Production Management, vol. 36 no. 9
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 22 February 2008

Dmitrij Slepniov and Brian Vejrum Waehrens

This paper is concerned with the realisation process of offshore outsourcing activities. The authors seek to understand the dynamic effects facing companies launching offshore…

1843

Abstract

Purpose

This paper is concerned with the realisation process of offshore outsourcing activities. The authors seek to understand the dynamic effects facing companies launching offshore outsourcing initiatives and to identify different types of mitigating efforts, which companies instigate to deal with these.

Design/methodology/approach

Two exploratory case studies are developed based on interviews, documents, and site visits.

Findings

The paper builds an understanding of patterns emerging from offshore outsourcing paths developments and discusses their organisational implications. It is proposed that the decision to dispatch standardised production tasks to parties overseas has implications over and beyond the initial intentions, which challenge the strategic scope and operationalisation of inter‐unit roles and responsibilities.

Practical implications

The paper suggests that the process, and particularly the mitigation‐oriented agency that take place as the process unfolds throughout the company, deserves a more significant space in future research of how companies learn to deal with outsourcing relationships. From this key lessons for practitioners are outlined, which prompt managers to work with the emerging realities of outsourcing relationships.

Originality/value

The study of the offshore outsourcing process is based on two in‐depth case studies providing rich illustrations of the process dynamics and how companies may start to work with these.

Details

Strategic Outsourcing: An International Journal, vol. 1 no. 1
Type: Research Article
ISSN: 1753-8297

Keywords

Article
Publication date: 18 September 2009

Ronan McIvor, Paul Humphreys, Alan McKittrick and Tony Wall

The purpose of this paper is to assess the applicability of a number of performance management techniques in the outsourcing process, in a business services context.

5741

Abstract

Purpose

The purpose of this paper is to assess the applicability of a number of performance management techniques in the outsourcing process, in a business services context.

Design/methodology/approach

Using a structured outsourcing framework, performance management techniques are applied in a financial services organisation over a three‐year period. A case study approach is employed to undertake the research, which involved the research team engaging directly with the organisation throughout the outsourcing process.

Findings

Applying performance management techniques in the outsourcing process is challenging in a number of areas including comparison difficulties, incomplete information and inadequate performance management systems. However, benchmarking and cost analysis are useful mechanisms for improving performance, and reducing costs via internal process redesign or outsourcing. Performance management techniques can be employed to remove inefficiencies from processes both prior to outsourcing and during the outsourcing relationship.

Research limitations/implications

There are a number of limitations of the research approach including gaining full participation from the company, having access to all relevant company information and time constraints.

Practical implications

The research findings highlight the implications of applying performance management techniques in a practical outsourcing setting. As well as identifying the challenges, the research highlights the value of integrating critical success factors, cost analysis, benchmarking and other performance management techniques into the outsourcing process.

Originality/value

There are few studies in the literature of applying performance management techniques in the outsourcing process at an operation's level. The findings have identified the challenges and benefits of performance management techniques in the outsourcing process. The findings have highlighted the importance of operations management concepts such as performance management, operations strategy, business improvement and process re‐design to services outsourcing, and the need for further research in this area by operations management scholars.

Details

International Journal of Operations & Production Management, vol. 29 no. 10
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 17 April 2009

Lifang Wu and Daewoo Park

The purpose of this paper is to introduce a dynamic outsourcing framework for making and implementing process outsourcing decisions in a rapidly changing environment.

2893

Abstract

Purpose

The purpose of this paper is to introduce a dynamic outsourcing framework for making and implementing process outsourcing decisions in a rapidly changing environment.

Design/methodology/approach

The theoretical framework incorporates three major concepts/techniques: the order winner concept to identify strategic level competitive priorities, the modularization concept to reconfigure enterprise organizational structure, and the analytical hierarchy process technique for linking critical demand attributes with process modules at the operational level.

Findings

The study presents a dynamic outsourcing approach through organizational modularization and shows when and how core and non‐core activities can be outsourced in a fast changing market.

Research limitations/implications

The complexities of the framework will need facilitation and supports on issues such as organizational modularity, multi‐goal optimization, and empirical validation.

Practical implications

This paper offers practical insights and clarifies common confusions associated with strategic outsourcing.

Originality/value

The paper tries to fill the gap between the existing outsourcing literature and the practical need for choosing specific outsourcing activities at the operational level. The dynamic framework creates a foundation for continuous process improvement on a cyclic basis.

Details

Business Process Management Journal, vol. 15 no. 2
Type: Research Article
ISSN: 1463-7154

Keywords

Article
Publication date: 8 February 2008

Bhimrao Ghodeswar and Janardan Vaidyanathan

This paper sets out to review the different types of outsourcing, its drivers and process, and to identify world‐class capabilities that host organisations can leverage.

9854

Abstract

Purpose

This paper sets out to review the different types of outsourcing, its drivers and process, and to identify world‐class capabilities that host organisations can leverage.

Design/methodology/approach

This paper is primarily based on a review of literature.

Findings

Outsourcing helps the organisation to achieve higher levels of value creation for the final customer. Drivers of outsourcing emanate from organisational initiatives, improvement focus, financial and cost objectives, or growth objectives. A wide range of core and non‐core critical business processes are increasingly being outsourced covering a large spectrum of sectors and operations, enabling host organisations to gain access to world‐class capabilities.

Originality/value

This paper identifies critical drivers of outsourcing and the process by reviewing available literature in this area. In doing this an attempt is made to find answers to some fundamental questions. What are the main types and drivers of outsourcing? What are the different phases in the process of outsourcing? This paper discusses in detail the significant drivers and process of outsourcing; and the world‐class capabilities accessible by the host organisation. Case studies are used to illustrate these aspects further.

Details

Business Process Management Journal, vol. 14 no. 1
Type: Research Article
ISSN: 1463-7154

Keywords

Open Access
Article
Publication date: 10 June 2020

Suvituulia Taponen and Katri Kauppi

The purpose of this paper is to compare service outsourcing decisions between public and private organizations and against a theoretical decision-making framework to both…

9698

Abstract

Purpose

The purpose of this paper is to compare service outsourcing decisions between public and private organizations and against a theoretical decision-making framework to both understand differences across the sectors and to provide an outsourcing framework more suitable specifically for outsourcing (and for the public sector).

Design/methodology/approach

Multiple case studies, i.e. a study of phenomena (here outsourcing process) at various sites is used as an approach.

Findings

Findings indicate that public sector organizations are trailing behind private sector organizations in how the decision-making process is conducted and resourced. The authors suggest regular evaluation of service functions internally as a starting point for the outsourcing service decision-making process. Additionally, the market analysis should be done prior to cost analysis and benchmarking as the availability of suppliers more qualified than the internal process defines the make or buy decision.

Research limitations/implications

The newly developed framework based on empirical evidence includes the following phases: regular evaluation of service functions, market analysis, cost analysis and benchmarking and evaluating relevant service activities. Applying the framework improves the efficient delivery of outsourced public services and brings public sector outsourcing closer to the professionalism currently present in the private sector.

Originality/value

Choosing between in-house and outsourced service delivery is a fundamental decision in both private and public sector organizations. Previous outsourcing research has mostly focused on the private sector, with limited focus on the public sector’s outsourcing processes, yet understanding of the service outsourcing process is important in ensuring organizational competitiveness and cost efficiency.

Details

Journal of Global Operations and Strategic Sourcing, vol. 13 no. 2
Type: Research Article
ISSN: 2398-5364

Keywords

Article
Publication date: 30 May 2008

Sandhya Shekhar

With an increase in global outsourcing, there is a need for risk mitigation strategies for outsourcing partner selection. Most outsourced services are getting commoditized, making…

1348

Abstract

Purpose

With an increase in global outsourcing, there is a need for risk mitigation strategies for outsourcing partner selection. Most outsourced services are getting commoditized, making it difficult to clearly differentiate capabilities of service providers. Also, the move towards knowledge process outsourcing (KPO) services is an area where the risks of failure are perceived to be higher. Since the knowledge dimension is a critical one for any outsourced activity, an objective assessment of knowledge gaps is important in the overall process of evaluation of the external provider. This paper aims to address the issues involved.

Design/methodology/approach

The paper builds the linkage between the measurability of the knowledge dimension and outsourcing project success through a set of propositions. It proposes a formal process of “knowledge gap assessment” as an input to assessing partner viability. It also identifies two important dimensions that are specific to an outsourcing relationship. Finally, the paper outlines a conceptual framework that takes these dimensions into account through a process of benchmarking using role simulations that could be used as a generic tool for performing such an assessment.

Findings

Such an assessment can help to classify prospective service providers as exhibiting low‐, moderate‐ or high‐knowledge gaps in different knowledge categories. Depending on the cost of bridging these gaps the associated risks can be classified as low, medium or high, facilitating appropriate managerial decisions.

Research limitations/implications

This paper proposes a conceptual model and a set of propositions which will need to be tested and refined through further empirical research.

Practical implications

The framework can be a useful tool for partner selection by firms who are looking to outsource activities. A simulation‐based benchmarking approach is likely to provide a more objective assessment of a firm's knowledge‐based capability, both when compared to the parent (outsourcing) organization as well as other short‐listed service providers.

Originality/value

This paper fulfils an identified need for minimizing risk in both business process outsourcing as well as KPO projects by focusing on the knowledge dimension and offers a practical framework to enable the same.

Details

Benchmarking: An International Journal, vol. 15 no. 3
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 2 April 2015

Donna Marshall, Eamonn Ambrose, Ronan McIvor and Richard Lamming

– The purpose of this paper is to provide an understanding of the influence of political goals and behaviour on the outsourcing decision process and outcomes.

1513

Abstract

Purpose

The purpose of this paper is to provide an understanding of the influence of political goals and behaviour on the outsourcing decision process and outcomes.

Design/methodology/approach

The research used an exploratory longitudinal case-based approach. Eight outsourcing projects in three telecommunications companies were analysed from the initial decision to the outcome of the case.

Findings

The authors show how political goals and behaviours influence the outsourcing decision process and inductively develop four political goals: personal reputation, attainment, elimination and control. The authors also identify three dynamic outsourcing paths: the personal reputation path, which leads to successful outcomes; the short-term attain and eliminate path leading to unsuccessful outcomes; and the destabilised path, which leads to mixed outcomes. All of these can be tested in other empirical settings.

Research limitations/implications

The implications for outsourcing literature are that political intentions influence the decision process and outcomes. For theorists, the authors provide an understanding of how political and rational goals and behaviour interact to impact outsourcing outcomes: with political and rational goals and behaviour complementary in some instances. The limitations are that with a small sample the findings are generalisable to theoretical propositions rather than to a population.

Practical implications

The implications for managers are the ability to identify and manage political goals that influence outsourcing decision process and outcomes.

Originality/value

For the first time, the authors uncover the political goals that impact the outsourcing decision process and outcomes. The authors add to the outsourcing literature, transaction cost theory and resource-based theory by defining and understanding the political goals that complement these theories.

Details

International Journal of Operations & Production Management, vol. 35 no. 4
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 11 November 2014

Sankalp Pratap

The aim of this paper is to go beyond the “What to outsource” and “To Outsource or Not” debate. Recognizing outsourcing as a fast growing reality that firms have to depend upon…

4606

Abstract

Purpose

The aim of this paper is to go beyond the “What to outsource” and “To Outsource or Not” debate. Recognizing outsourcing as a fast growing reality that firms have to depend upon, the paper concerns itself with optimal management of outsourcing arrangements through the practice of “outsourcing capability”. It argues that outsourcing failure can be mitigated if organizations see outsourcing as an “ongoing activity” to be managed as opposed to treating it as a one-time opportunistic “act”.

Design/methodology/approach

Based on the review of existing literature and drawing upon recent instances of outsourcing successes and failures, the paper develops a conceptual framework which divides various organizational processes into four different classes. It delineates the varied aspects of “outsourcing capability” that a firm would need to use to manage these varied class of processes as and when they are outsourced.

Findings

There is no “one-size-fits-all” approach to managing outsourced processes. Different processes require emphasis on different aspect of outsourcing capability if outsourcing is to deliver the envisaged benefits.

Originality/value

The traditional focus in outsourcing literature has been on the core/non-core process with the recommendation to keep core processes in-house and outsource the non-core processes. This distinction can be transitory and hence detrimental in the era of hyper-competition. I argue that firms should instead focus on developing and refining aspects of “outsourcing capability” relevant to the varied class of processes that they wish/need to outsource.

Details

Strategic Outsourcing: An International Journal, vol. 7 no. 3
Type: Research Article
ISSN: 1753-8297

Keywords

Article
Publication date: 11 September 2009

K.B.C. Saxena and Sangeeta S. Bharadwaj

The purpose of this paper is to discuss business processes as building‐blocks of organisational capabilities and outsourcing of business processes as a viable management approach…

4832

Abstract

Purpose

The purpose of this paper is to discuss business processes as building‐blocks of organisational capabilities and outsourcing of business processes as a viable management approach to building strategic organisational capabilities.

Design/methodology/approach

The paper develops a conceptual framework based on “strategic partnering” to successfully implement “global sourcing” of organisational capabilities and validates this framework using multiple case studies research.

Findings

The paper identifies business process management, relationship management and the outsourcing value propositions as the key dimensions for business process outsourcing (BPO) success.

Research limitations/implications

The paper is based on case studies of seven European clients and ten Indian service providers of BPO services. A larger survey of BPO clients and service providers may further strengthen the proposed framework and make the findings more conclusive.

Practical implications

The proposed framework helps both the BPO client and the service provider organisations in understanding the critical role of relationship management in realising the intended BPO service outcomes. It also helps the BPO clients and the service providers to understand the risk and business value implications of BPO value proposition.

Originality/value

The paper addresses a dearth of literature on BPO service provision and establishes the need for dyadic study of BPO services from both the client and the service provider perspective simultaneously for understanding the dynamics of this emerging service sector.

Details

Business Process Management Journal, vol. 15 no. 5
Type: Research Article
ISSN: 1463-7154

Keywords

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