Review of the Empirical Business Services Sourcing Literature: An Update and Future Directions

Abstract

The 2010 Journal of Information Technology (JIT) article, ‘A Review of the IT Outsourcing Empirical Literature and Future Research Directions,’ analyzed 741 findings on the determinants of Information Technology Outsourcing (ITO) decisions and outcomes from 164 empirical articles published between 1992 and 2010. Using the same coding method, the 2011 JIT article, ‘Business Process Outsourcing Studies: A Critical Review and Research Directions,’ analyzed 615 findings on the determinants of Business Process Outsourcing (BPO) decisions and outcomes from 67 empirical articles published between 1996 and 2011. Taken together, these two reviews found that the preponderance of evidence from both ITO and BPO research streams produced largely consistent results pertaining to the categories of independent variables that affected outsourcing decisions and outcomes. To investigate the most current research findings on business services, which comprise ITO and BPO, and to compare the results with the prior JIT reviews, we replicated the method used in the prior JIT reviews. In this update, we examined 174 newly published articles across 78 academic journals published between 2010 and 2014. We found that researchers have significantly expanded the variables of interest in the last 4 years. In all, researchers investigated 69 new variables. Compared with earlier research, this review of recent articles found a deeper exploration of the direct effects of transaction attributes, sourcing motivations, client and provider capabilities, and governance on sourcing decisions and outcomes. Researchers have also studied a broader variety of sourcing decisions, including shared services, captive centers, rural sourcing and backsourcing. This update also found a more nuanced understanding of relational governance and its interaction with contractual governance. We assessed the research progress that has been made on ten previously identified gaps in knowledge. We proposed a future research agenda that includes continued, incremental progress on ‘normal science’ research questions, as well as more ambitious research goals. We challenged researchers to investigate how sourcing clients, providers, and advisors can protect jobs, protect the environment, and ensure security in an increasingly automated world.

Conflict resolution in business services outsourcing relationships

“…Recent bank cybersecurity issues and software failures in air transport systems, for example, seriously harmed corporate reputation and customer confidence in the organizations involved (Rayner 2014;Shirbon 2016). There is also now considerable evidence of large-scale outsourcing both enabling and also disabling the execution of business strategies (Lacity, Khan and Yan, 2016;Willcocks, Lacity and Sauer, 2017).…”

“…Some sources estimate the failure rate for inter-organizational relationships to be as high as 70 percent (Barringer and Harrison 2000;Hughes and Weiss 2007). In the specific context of BSO relationships, a review of 1,304 empirical findings from 20 years of academic research found 30 percent of client-reported BSO outcomes were negative or unbeneficial (such as poor service quality, significant hidden costs and/or poor customer satisfaction) and 21 percent of client-reported findings resulted in no demonstrable impact on BSO outcomes as a consequence of outsourcing (Lacity et al 2016). BSO failure rates as high as 50 percent have been reported (e.g., Gefen et al 2008;Mani et al 2012).…”

Tensions in Global IT Multisourcing Arrangements: Examining the Barriers to Attaining Common Value Creation

“…new parties). We expand on the analysis of governance forms in literature involving dyadic outsourcing relationships (Kim, Lee, Koo, & Nam, 2013;Lacity et al, 2016). Our findings contribute to the research by Wiener and Saunders (2014), which identified critical enablers to manage the delicate balance between vendor competition and cooperation (i.e.…”

“…The aim of our research has been to focus on how actors operating in a global IT multisourcing arrangement share information, knowledge and value to create and capture common value, and what are the barriers that may hinder common value creation? In doing so, we responded to the call by Bapna et al (2010) and Lacity et al (2016) for more research into IT multisourcing outcomes. We used the concepts of ecosystems and BM thinking to study the creation and capturing of common value and to identify potential ecosystem barriers.…”

“…Bapna et al (2010) has called for more research into the outcomes of IT multisourcing, arguing that "multisourcing is emerging as an important inter-organizational, collaborative form of value creation", and that "little is known about the underlying theory and management principles that can make or break these arrangements" (p. 794). The review of outsourcing literature conducted by Lacity, Khan and Yan (2016) supports that position, based on the argument that "some of the most interesting work in IT outsourcing considered how organizations matched multiple factors in configurations that maximized their chances of success" (p. 22). Existing studies have so far not considered how actors exchange information and knowledge in a global context and, as such, how they contribute to value creation based on shared activities.…”