Abstract
The shift in value creation activities from the client to the service provider and pervasive digital penetration is disrupting the Information Technology enabled Services (ITeS) outsourcing industry. In comparison to the extant traditional model, which primarily focused on operational effectiveness driven through labor arbitrage benefits, the outsourcing service providers (OSPs) now play significantly larger roles in the new Digital Transformation Outsourcing (DTO) scenario. OSPs now need a uniquely different set of capabilities to deliver the new value propositions, as they adapt to handle complete business functions on behalf of their clients and become partners in delivering integrated digital solutions with strategic business outcomes. We study twenty-six of the largest global ITeS providers taking the dynamic capability view, and we theoretically identify the important capabilities in the DTO scenario. Using fuzzy-set Qualitative Comparative Analysis (fsQCA), we explore recipes for OSP success and failure in the DTO context by analysing a novel firm capability dataset that we created using firm-level information from industry analyst reports and databases. We find the capability recipes to vary by the narrow/broad scope of OSPs.
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