Outsourcing: Current and Future Trends

Thunderbird International Business Review 03/2005; 47(2):183 - 204. DOI: 10.1002/tie.20048


Highlighted are two reasons for outsourcing: cost and focus on the core competencies of the enterprise. Surveying U.S., U.K., and Continental Europe companies concerning current and future outsourcing trends positions outsourcing as a prominent strategic lever. Achieving “best-of-breed” practice is predicted to occur through new technology. Also, human resources and IT outsourcing will become more prominent. The results strongly indicate that partnership alliances and performance-driven contracts will become as important as the current preferred, trusted supplier relationship. Keiretsulike, horizontal linkages will be required to realize scale and competency advantages from future outsourcing arrangements. © 2005 Wiley Periodicals, Inc.

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    • "The cost benefit analysis is become a top and most important argument in the areas of human resource outsourcing [3]. The empirical data from government agencies outsourcing suppliers generated savings between 20-30 % in production costs [10];[18];[19]. Klass (2005) has written a long theoretical study on the impact of human resource outsourcing. The author further examine, there are many variables that can be affected by organization and will difference from one organization to another organization. "
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    ABSTRACT: Human Resource Outsourcing (HRO) has grown popularly since early 1990s, particularly in the USA and Europe. It is up to 90% of the companies outsource some HR activities and becoming a new engine of growth to the organization. Despite, many studies conducted on these issue however the study is still inconsistency and vague. Hence, the aim of study is to analyze the effect of cost reduction and business strategy on human resource outsourcing practicing in Malaysian Government Link Companies (GLCs). Meanwhile, the objectives of the current study are to analyze the relationship between cost reduction and business strategy towards human resource outsourcing practicing. The study also will propose the theoretical framework on human resource outsourcing implications. To achieve those objectives the critical reviews made based on previous studies. The results of the study may provide a systematic guideline and caution to the Malaysian Government in human resource outsourcing effects. It also serves as guideline to the government in formulating of manpower policy particularly in Malaysia GLCs.
    International Symposium on Technology Management & Emerging Technologies, Langkawi, Malaysia; 08/2015
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    • "In summary partnerships are about relationships, not contracts [7]. The very important difference between the two is that partnering relationships are seen as deep, long-term relationships in which many traditional boundaries between companies are broken [8]. According to Kinnula [9] these relationships differ from each other on the level of depth, partnership outsourcing is a deeper relationship. "
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    ABSTRACT: Software outsourcing partnership (SOP) is a mutually trusted inter-organisational software development relationship between client and vendor organisations based on shared risks and benefits. SOP is different from the conventional software development outsourcing relationship, SOP could be considered as a long term relation with mutual adjustment and renegotiations of tasks and commitment that exceed mere contractual obligations stated in an initial phase of the collaboration. The objective of this research is to develop Software Outsourcing Partnership Model SOPM in order to assist vendor organizations in converting their existing outsourcing contractual relationship into outsourcing partnership with client organizations. Systematic Literature Review (SLR) and empirical research study will be used for the aforesaid objective. We have developed a SLR protocol, and are in the process of implementing the protocol. SLR is based on a structured protocol, and is therefore, different from the ordinary literature review. The expected results of this study will be Software Outsourcing Partnership Model that will assist vendor organizations in building new partnership or converting the existing outsourcing relationship into outsourcing partnership with client organisations.
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    • "Kotabe & Mudambi (2009) conclude that firms recognize that only low cost is not enough to create sustainable competitive advantage over their competitors. Kakabadse & Kakabadse (2005) report that the main reasons for outsourcing are: economic, quality, innovation, and also the fact that companies can buy technology from a supplier that would be otherwise too expensive to replicate internally. For Ebrahimi (2009) there is much more than only economic reasons: " the main purpose was to take advantage of lower costs to employ skilled workers " . "
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    ABSTRACT: The offshoring business is booming and what was used by few US pioneers are now spreading through the world (Economist Intelligent Unit, 2006). It is a very new issue at least regarding the origin of the expression and related to services and, even a common sense definition with a complete detailed explanation clarifying the cases is not available. Mol (2007), for instance, presents a variety of conceptual lens has been applied to outsourcing (and also can be applied to offshoring process): transaction cost economics, resource-based view, core competences, micro-economics, industrial organization, among others. From this list of perspectives, in this article we propose to analyze the applicability of transaction cost economics-TCE (Coase, 1937; Williamson, 1975, 1979) through its characteristic make-or-buy expression, considering the offshoring pace and emerging economy firms. The make-or-buy decision must be flexible enough to explain offshoring characteristics and developed and emerging economy firms scenarios. As secondary objectives, and to show the trail to the main purpose, two research questions were identified and discussed during the paper: Is offshoring process an international movement only from developed countries to emerging economies? Is the main reason of offshoring the looking for low-cost work / activities? To achieve the proposed objectives, the structure of this paper begins with a reasonable or acceptable definition of offshoring. Some reasons (or " the reason ") for the process are also another important starting point. The majority of articles referee the idea that low-cost is the main reason for offshoring, and if it is correct, transaction cost economics seems to be a good basis for our analysis purpose and integrative intention. Also some literature connections between offshoring and TCE are presented and, naturally TCE is presented in highlights for understanding these connections. Ending this section, some different arguments based on newer researches are presented by some authors presenting another perspective as the main reason. After this theoretical approach, a scenario analysis and some discussions are presented based on all possible interactions among firm from developed (DC) and emerging economies (EE) and examples of international corporations are presented to clarify and improve the understanding of our research questions and to build new contributions to international business theory. When analyzing all possible developed and emerging countries' interactions, we argue that only looking for skills, capabilities, competences, etc., can be considered the main reason for offshoring to unify developed and emerging countries perspectives. Developed country firms have the additional benefit of low cost but considering the execution of same activities, so the same work (using similar skills, capabilities or competences) done with low cost. After all, final remarks are presented and some futures studies are proposed taking advantages of the pace of offshoring process.
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