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FOR IMMEDIATE RELEASE

Managing Services Outsourcing for Success

(TEMPE, Arizona) October 17, 2011 — CAPS Research and author Mei Li, Ph.D of Leigh University releases the benchmark report Services Outsourcing and Bridge Transfer: A Social Network Perspective. Services outsourcing is a prevalent yet problematic phenomenon. On the one hand, more and more firms are outsourcing services functions. On the other hand, we are faced with many services outsourcing failures. This recently released research attempts to uncover some of the omitted causes of services outsourcing failures, using a social network perspective. Examined were the relationship arrangements among the service buyer and supplier firms, their customers' post services outsourcing arrangements and their performance implications. These performance implications were also contrasted in customer facing types of services with services that entail little or no interactions with the end customers.

The results showed that relationship arrangements among services buyer firms, supplier firms and end customers make a difference in the outsourcing outcomes of customer-facing type of services. If the service buyer firm takes a hands-off approach and totally relies on its suppliers to take care of their end customers (after all, the supplier firms are paid to do so), it can lead to two undesirable services outsourcing outcomes: contract cost increase and service quality degradation. The more hands-off the buyer firms are, the more the buyer firms have to pay for the services outsourcing contract. The more hands-off the buyer firms are, the lower the quality of service offered by the service supplier firm.

This effect was not found in services that entail little or no customer interactions. In this situation, whether the service buyer firms take a hands-off approach does not make a difference in contract costs or service quality delivered by the supplier firms. Instead, the buyer-supplier relationship was found to be a key influencing factor to services outsourcing outcomes in this context.

This benchmark study helped to pinpoint some of the omitted causes of services outsourcing failures and shed light on how to manage services outsourcing for success.

The complimentary benchmark study "Services Outsourcing and Bridge Transfer: A Social Network Perspective" is available on the CAPS Research public website www.capsresearch.org. First time visitors will be prompted to register to access the benchmarking reports. For more information about this benchmark study or other reports, contact CAPS Research at research@capsresearch.org.

Celebrating twenty-five years of research excellence! CAPS Research is a nonprofit research organization founded in 1986 to provide leading research to our strategic-minded corporate sponsors and to the public. Our mission is to work in partnership with a global network of executives and academics for the discovery and dissemination of strategic supply management knowledge and best practices. CAPS Research is jointly sponsored by the W. P. Carey School of Business at Arizona State University, the Institute for Supply Management™, and Global 1000/Fortune 500-size organizations.

Media Contact:
Debbie Maciejewski
Marketing Manager
CAPS Research
800-888-6276 extension 3046
Email: dmaciejewski@capsresearch.org

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