Total and Relative Value Gains in Business Process Outsourcing
This study examines the factors that influence the total value created in Business Process Outsourcing (BPO) relationships and the asymmetry in the gains for individual stakeholders (i.e. clients and vendor). We posit that the total value created in BPO is influenced by the nature of the task, specifically the knowledge intensity of the task and its proximity to the client's value chain. In addition, we posit that the client's outsourcing intent, the vendor's experience, and size influence the relative extent to which the stakeholders gain from BPO. Our model is tested using an event study of 214 public announcements of BPO initiatives. We find the knowledge intensity of the task outsourced and the centrality of the task outsourced to influence the total value created for the stakeholders. Additionally, relative to vendors, the clients gained more when outsourcing to experienced and large vendors.
Suresh, Sukruth and Ravichandran, T., "Total and Relative Value Gains in Business Process Outsourcing" (2017). Business Faculty/Staff Publications. Paper 139.
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