Services offshoring and its strategic effects on value chains

Abstract

This article's main objective is to examine some known management theories under the offshoring point of view. It detaches some factors in existing theories and how they can be at risk in an increasing offshoring of services processes. In the absence of more systematic studies about the effects of offshoring over value chain and core competencies imprecise borders and definitions, we try to interpret them in a holistic manner and stimulate discussions in a new area of study rather than to provide definitive general conclusions. The methodological aspects mainly concerning the offshoring bibliography are very impressive, especially since 2000. There seems to be a new trend appearing, like a wedge between strategy and international business theories, or that at least complements these theories. The analysis presented in this paper is offered as an aid to systematic investigation involving value chains, core competencies, innovations and the accelerated process of offshore outsourcing of services. Some preliminary evidence showed countries and companies in good conditions to improve their participation in the international market. The internationalization of these new firms from emerging countries and their learning process may need extension to existing theories, at least from the perspective of emerging and in the developing world.

International Outsourcing: a process approach to the apparel industry

“…Others (eg., McIvor, 2000;Quinn & Hilmer, 1994) defend that companies can also consider outsourcing core activities: in this case, we talk of strategic outsourcing. This strategic idea about outsourcing is also defended by Gião, Oliveira, & Vasconcellos (2008), who showed the strategic effect of services offshoring on value chains.…”

Critical success factors for offshoring of enterprise resource planning (ERP) implementations

“…Further studies of critical success factors have been done against a backdrop of classical management theory as well (Bradley, 2008) While on one side, there were these above mentioned ERP applications that were changing the way businesses were being run, concurrently offshoring of IT Services was also picking up and was changing the way IT organizations are run (Davis and Ein-dor, 2006). IT Services were getting offshored and the value chain that delivered services got transformed (Giao et al, 2008). Given the advantages of offshoring, there have been a studies undertaken that have helped develop frameworks and models around offshoring (Soliman, There are advantages of offshoring but there are the concomitant issues (King, 2008), risks, co-ordination problems (Mirani, 2007) as well.…”

Measurement and improvement of offshoring effectiveness

“…It is also necessary to understand how difficult it is to move away from a manufacturing mindset to one that is service-based and to understand the challenges that IT service providers are facing while making these changes [11]. The researcher will study ways and means to reduce offshoring risks, transaction costs and the total costs of outsourcing from a service provider perspective, and will evaluate what it takes to make an offshore resource productive for both the client and the vendor.…”

“…Of the abovementioned costs, [1], [5], [7], [8], [12] can be directly attributed to vendor's service capability assessment, [3], [4], [6], [9], [10] to cross-cultural issues, trust, control and associated costs, and [2], [11] to offshoring strategy.…”