Organizational Learning and Capabilities for Onshore and Offshore Business Process Outsourcing

This paper identifies and analyzes firm-level characteristics that facilitate onshore and offshore business process outsourcing (BPO). We use organizational learning and capabilities to develop a conceptual model. We test the conceptual model with archival data on a broad cross section of U. S. firms. Our empirical findings indicate that firms with experience in onshore information technology (IT) outsourcing and capabilities related to IT coordination applications and process codification are more likely to engage in BPO, and firms with experience in internationalization are more likely to engage in offshore BPO. We also find that IT coordination applications have a greater impact on onshore BPO than on offshore BPO, and the effect of process codification is partly mediated through IT outsourcing

Services offshoring: a microfoundations perspective

The objective of this paper is to shed light on the link between services offshoring strategy and its outcomes for the firm by developing a theoretical framework for examining the role of employee motivation in the implementation of services offshoring strategy. Our framework is built on two conceptual foundations: the Microfoundations view of strategy and Goal Framing theory. We analyze services offshoring in terms of (a) the attributes and (b) the outcomes of firm level offshoring strategies, and (c) the micro-level processes that are essential for realizing the outcomes. As part of these micro-level processes, we focus particularly on employee motivation for services offshoring strategy implementation. We argue that our framework should constitute the basis of future empirical research in services offshoring, as it aims to contribute a greater theoretical understanding and practical recommendations for the refinement of services offshoring strategies

Factors Influencing Knowledge Transfer in Onshore Information Systems Outsourcing in Ethiopia

Knowledge transfer in onshore information systems (IS) outsourcing projects in Africa is an important but under-researched phenomenon. This study focuses on the client-vendor perspective and examines the factors that influence knowledge transfer in onshore information systems outsourcing in Ethiopia. Conceptually, knowledge-based perspectives of IS outsourcing is used to identify an initial set of factors to frame the empirical study. This is followed by semi-structured interviews with ten project managers. The findings indicate that five key factors, namely mutual absorptive capacity, mutual learning intent, mutual trust, mutual disseminative capacity and project staff turnover influence knowledge transfer in outsourced IS projects. The results suggest that development and management of the resources, processes and behaviors implied by these factors are vital to ensure successful inter-organizational knowledge transfer and to reverse or minimize the failure rates of outsourced IS projects. The study concludes with implications for research and practice

What is Offshoring Management Capability and How Do Organizations Develop It? A Study of Dutch IT Service Providers

This study develops a capability perspective of offshoring. While previous research shows that experience affects future offshoring decisions, we still lack an understanding of what offshoring management capability is and how organizations develop it. Using data on five Dutch IT service providers, we find that offshoring management capability is multidimensional as it comprises four dimensions: coordination competency, relationship development, relationship design, and organizational identification. Furthermore, we uncover the process through which organizations can actively develop an offshoring management capability. We find that there are four elements in this learning loop: an offshoring growth mentality, adaptive monitoring of offshoring performance, offshoring reflexivity, and mechanisms for storing and disseminating offshoring best practice. Therefore, our capability perspective of offshoring provides a comprehensive conceptualization of offshoring management capability as a multidimensional construct and uncovers the process through which organizations develop it

How Strategy and Governance Choices Influence Innovation Success in Software Products and Services

This research studies the effect of key strategy and governance choices on chances of success of innovation in software products, and we test our hypotheses based on data from more than 150 professionals in the United States who are responsible for new software product development. We find the right balance of onshore and offshore team members to be more salient in influencing innovation success than decisions related to insourced versus outsourced development. Our findings suggest a greater likelihood of innovation when business executives make technical decisions, particularly if firms compete by selling high price margin software products or services

The impact of R&D sources on new product development: Sources of funds and the diversity versus control of knowledge debate

We build on the knowledge-based view to study the relative impact of alternative R&D sources on innovation performance. We contrast two arguments that have created a debate in the literature: One is that diversity of knowledge is better for innovation, because the integration of a larger variety of knowledge helps create new products that can fulfill unmet customer needs; another is that control of knowledge is better, because the incentives and contextual system of the firm facilitate employees' experimentation, which supports the creation of new products. We provide one solution to this debate by arguing that the relative importance of diversity and control of knowledge on innovation depends on the sources of finance. Hence, we find that, in general, control of knowledge has a higher impact than diversity of knowledge on the sale of new products. We also find that alternative sources of finance moderate the relationships: internal funds strengthen the impact of R&D sources with more diversity of knowledge on the sale of new products, while external funds strengthen the impact of R&D sources with more control of knowledge on the sale of new products.Authors appear in alphabetical order. We thank Tina Ambos, anonymous reviewers, and participants at the European International Business Academy annual meeting for useful suggestions for improvement. We thank the National Statistics Institute, the Science and Technology Foundation, and the Foundation for Technical Innovation of Spain for access to the database. This project was funded by the Ministry of Economy and Competitiveness (ECO2015-67296-R, MINECO/FEDER, UE) and the Community of Madrid and the European Social Fund (S2015/HUM-3417, INNCOMCON-CM). Cuervo-Cazurra thanks the Walsh Research Professorship, the Robert Morrison Fellowship and the Lloyd Mullin Fellowship for financial support. Rodriguez thanks Ramon Areces Foundation for financial support

BUSINESS PROCESS OUTSOURCING AND MARKET VALUE OF FIRMS

Recent trends suggest that business process outsourcing is an important contemporary phenomenon that is likely to have profound effects on organizations. This study examines whether there is a relationship between business process outsourcing and firm valuation and whether this relationship depends on the nature of the process outsourced and the location it is outsourced to. Using 375 public announcements of process outsourcing initiatives of Fortune 1000 firms we empirically test our hypotheses using an event study methodology. Our results indicate that business process outsourcing creates modest positive above normal returns. We also found that outsourcing knowledge intensive processes is more value adding than outsourcing labor intensive processes and offshore outsourcing is more value adding than onshore outsourcing. Interestingly, we found that among the options explored offshore outsourcing of knowledge intensive processes could reduce firm valuation

Control, Process Facilitation, and Requirements Change in Offshore Requirements Analysis: The Provider Perspective

Process, technology, and project factors have been increasingly driving organizations to offshore early software development phases, such as requirements analysis. This emerging trend necessitates greater control and process facilitation between client and vendor sites. The effectiveness of control and facilitation has, however, not been examined within the context of requirements analysis and change. In this study, we examine the role of control and facilitation in managing changing requirements and on success of requirements gathering in the Indian offshore software development environment. Firms found that control by client-site coordinators had a positive impact on requirements analysis success while vender site-coordinators did not have similar influence. Process facilitation by client site-coordinators affected requirements phase success indirectly through control. The study concludes with recommendations for research and practice