Offshoring Of Business Services Research Articles

Offshoring of business services and entry mode choices: The role of modularity and bandwidth

This paper investigates the role of modularity on entry mode choice of companies undertaking offshoring of business services. We distinguish between Functional modularity, reflecting the possibilit...

Przenoszenie usług biznesowych do Polski: uwarunkowania, przebieg i skutki procesu

As a result of scientific development, liberalization of the global economy and transformation of multinational enterprises, off shoring of business services has become a crucial area of international collaboration. The evaluation of location attractiveness of the Polish economy shows a rapid decline in financial factors combined with a growth in quality and availability of human resources. The off -shoring of business services to Poland can be largely attributed to multinational enterprises and has been performed in a form of foreign direct investment. Moreover, the analysis of the offshoring process suggests a significant increase in a pace of business services transfer to Poland between 2004 and 2008, as well as a considerable decline after 2008. The main outcomes of business services off shoring include: foundation of business entities specialized in delivery of business services and subsequent development of the business service sector, a significant export growth and an increased employment in related are.

Offshoring and the Skill Structure of Labour Demand in Belgium

A major concern regarding the consequences of offshoring is the worsening of the labour market position of low-skilled workers. This paper addresses this issue by providing evidence on the impact of offshoring on the skill structure of manufacturing employment in Belgium between 1995 and 2007. Offshoring is found to significantly lower the employment share of low-skilled workers. Its contribution to the fall in the employment share of low-skilled workers amounts to 35 %. This is mainly driven by offshoring to Central and Eastern European countries. While most of the previous papers on this subject focus on materials offshoring, we show that offshoring of business services also contributes significantly to the fall in the low-skilled employment share. As a complement to the existing literature, we compare the widely used current price measure of offshoring with a constant price measure that is based on a deflation with separate price indices for domestic output and imports. This reveals that the former underestimate the extent of offshoring and its impact on low-skilled employment. Finally, we also find that the impact of offshoring on low-skilled employment is significantly smaller in industries with a higher ICT capital intensity.

Transformation of Employment Structures in Poland - Servitization of Economy

Transformation of the Polish economy and the related process of reallocation of labour resources have been progressing since the beginning of the 1990s, but their growth is insufficient. The current level of development of the service sector does not constitute an adequate alternative to diminishing employment in the so-called declining heavy industries, which were dominant in the Polish economy for many years. Given that a more dynamic growth in the services sector can contribute to the labour market balancing alleviating the unemployment problem, not only by the absorption of people laid off from the restructuring industrial enterprises but also by providing new jobs for young people, it is necessary to increase consistently the share of modern section services in GDP and total employ-ment.Increasing employment and created added value in modern, knowledge-based services are consistent with the direction of changes observed in the developed countries.In Poland, the employment is steadily increasing in services related to real estate and businesses, financial and insurance services, particularly in IT services. The knowledge embodied in products and technologies and highly skilled labour resources determines the innovativeness of the economy, providing a source of growth and competitiveness. Therefore, the direction and pace of these changes are important.One of the possibilities of further service sector development in Poland is the offshoring of business services. The created BPO and KPO centres allow for the absorption of high-quality labour resources, including university graduates, whose numbers are increasing from year to year. This is even more important as in the long time span the sector development and created jobs will increasingly be based on the human factor and the skills possessed by employees rather than on lower labour costs compared with other locations.

Can we really trust offshoring indices?

This paper argues that offshoring indices often measure something different than what we think they are. Using data from input-output tables of 21 European countries from 1995 to 2006 we decompose an offshoring index, distinguishing between a domestic (structural change) and an international component (imported inputs ratio). Regarding offshoring of business services, a large share of the index variation is driven by the domestic component. This is even more pronounced for overall service offshoring. In the case of material offshoring, by contrast, the international component drives the main variation of the indices. Our results therefore show that, regarding (business) services, the typical calculation of offshoring indices tends to over estimate the role of the imported inputs component, neglecting the role played by structural changes in the economy.

Labour Adjustment Implications of Service Offshoring: Evidence from Canada

AbstractAbout one‐fifth of Canadian employees are in jobs that are vulnerable to service offshoring. Despite this figure, both theory and our empirical evidence (based on a variety of methodologies and datasets) suggest that the offshoring of business services is not likely to lead to large adverse employment effects. We also conclude that existing active labour market adjustment policies (e.g. increased labour market information, job search, mobility and training) developed for other adjustment pressures such as technological change and free‐trade in goods are just as appropriate (perhaps even more so) to deal with the consequences of service offshoring.

Co-evolution of global sourcing: The need to understand the underlying mechanisms of firm-decisions to offshore

In this introductory paper, we first discuss the emergence of global sourcing of business services and how these have been largely ignored in the IB field. Offshoring of business services has reached substantial proportions. Despite the radical growth, IB research on global sourcing is still in its infancy. Offshoring of business services represents a new type of internationalization. The offshoring of high-value services confronts companies with many of the challenges that are typical of an internationalization process in which well-known models and concepts of internationalization are applicable but also leave important unanswered questions requiring reconsideration and revision of these theoretical positions. Offshoring of business services is fundamentally different from outsourcing offshore of manufacturing activities. Using data from the Offshore Research Network (ORN), we track patterns of the emergence and diffusion of global sourcing of business services. On the basis of these new insights, we make a plea for a more encompassing, co-evolutionary perspective of global sourcing stressing the interactions between managerial intentionality, path-dependent experience and knowledge accumulation, as well as the institutional and selection forces. In particular, we develop a co-evolutionary offshore decision model integrating managerial intentionality, knowledge/experience and institutional and selection forces that explain the heterogeneous outcomes of offshoring. Although emergent outcomes of co-evolutionary dynamics are highly idiosyncratic, we identify in this paper some underlying mechanism that drive specific global sourcing patterns. Finally, we position the papers of this special issue in this co-evolutionary model.

Outsourcing and Offshoring of Business Services: Challenges to Theory, Management and Geography of Innovation

Massini S. and Miozzo M. Outsourcing and offshoring of business services: challenges to theory, management and geography of innovation, Regional Studies. Drawing on an original survey, this paper discusses the trends and challenges posed by the outsourcing and offshoring of business services. It documents and analyses the increasing offshoring of business services (administrative services, call centres, information technology services, procurement, and product development) from the United States and Europe to less developed countries, the functions offshored, the size of offshorers, their destination, and the delivery models, and it explores the role of information and communication technologies and the development of both large global services suppliers and entrepreneurial ventures in developed and less developed countries. The paper derives implications regarding outsourcing decisions, the globalization of high value-adding activities, such as product development and innovation, raising issues of evolving market structure and the emergence of technical clusters where companies develop expertise to provide, and compete for, activities and skills across a range of sectors. Massini S. et Miozzo M. L'approvisionnement à l'extérieur et les activités extraterritoriales des services aux entreprises: les défis à la théorie, à la gestion, et à la géographie de l'innovation, Regional Studies. Puisant dans une première enquête, cet article discute des tendances et des défis posés par l'approvisionnement à l'extérieur et les activités extraterritoriales des services aux entreprises. On décrit et analyse l'essor des activités extraterritoriales des services aux entreprises (services administratifs, centres d'appels, services de la technologie de l'information, approvisionnement, et développement de produits) des Etats-Unis et de l'Europe aux pays en voie de développement, les fonctions extraterritoriales, la taille des entreprises extraterritoriales, leur zone d'accueil, et les modes de livraison, et on examine le rôle des technologies de l'infomation et de la communication et le développement à la fois des grandes sociétés des services mondialisées et des créations d'entreprise dans les pays développés et en voie de développement. On en tire des conclusions pour la décision de s'approvisionner à l'extérieur, la mondialisation des activités à haute valeur ajoutée, telles le développement de produits et l'innovation, et les questions soulevées quant à l'évolution de la structure du marché, et la naissance des grappes techniques où les entreprises développent le savoir-faire afin de fournir, et de disputer, des activités et des compétences à travers une série de secteurs. Approvisionnement à l'extérieur Activités extraterritoriales Services aux entreprises à intensité de connaissance Innovation Massini S. und Miozzo M. Outsourcing und Auslandsverlagerung von Geschäftsdiensten: Probleme bei der Theorie, Verwaltung und Geografie von Innovation, Regional Studies. Auf der Grundlage einer Originalerhebung erörtern wir in diesem Beitrag die Trends und Probleme beim Outsourcing und bei der Auslandsverlagerung von Geschäftsdiensten. Wir dokumentieren und analysieren die zunehmende Verlagerung von Geschäftsdiensten (Verwaltungsdiensten, Callcentern, Informationstechnologie-Diensten, Beschaffung und Produktentwicklung) von den USA und Europa in weniger entwickelte Länder und untersuchen die ausgelagerten Funktionen, die Größe und die Zielorte der auslagernden Firmen sowie die Umsetzungsmodelle. Ebenso untersuchen wir die Rolle der Informations- und Kommunikationstechnik und die Entwicklung von großen, weltweit tätigen Dienstanbietern sowie von neuen Firmen in entwickelten und weniger entwickelten Ländern. Wir erörtern die Auswirkungen hinsichtlich der Outsourcing-Entscheidungen, der Globalisierung von hochgradig wertsteigernden Aktivitäten (wie z. B. Produktentwicklung und Innovation), der Probleme in sich entwickelnden Marktstrukturen und des Entstehens von fachlichen Clustern, in denen Firmen Fachwissen entwickeln, um Aktivitäten und Fachkenntnisse in einem breiten Spektrum von Sektoren anzubieten bzw. um darum zu konkurrieren. Outsourcing Verlagerung ins Ausland Wissensintensive Geschäftsdienste Innovation Massini S. y Miozzo M. Subcontratación y deslocalización de servicios comerciales: desafios para la teoría, la gestión y la geografía de la innovación, Regional Studies. Basándonos en una encuesta original, en este artículo observamos las tendencias y los retos que implican la subcontratación y la deslocalización de servicios comerciales. Documentamos y analizamos el aumento de la deslocalización de servicios comerciales (servicios administrativos, centros de llamadas, servicios de tecnología de la información, adquisición y desarrollo de productos) desde los Estados Unidos y Europa a países menos desarrollados, las funciones externalizadas, el tamaño de las empresas que externalizan, su destino y los modelos de proveedores. Asimismo evaluamos el papel de las tecnologías de información y comunicación y el desarrollo de grandes suministradores de servicios globales y proyectos empresariales en países desarrollados y menos desarrollados. El articolo deriva consecuencias para las decisiones de la subcontratación, la globalización de las actividades de alto valor añadido (tales como el desarrollo y la innovación de productos) y discute las consecuencias para la evolución de la estructura del mercado y la aparición de aglomeraciones técnicas en las que las empresas desarrollan habilidades para competir y ofrecer servicios a una amplia gama de sectores. Subcontratación Deslocalización Servicios comerciales con alto nivel de conocimientos Innovación

Outsourcing and Offshoring of Business Services: Challenges to Theory, Management and Geography of Innovation

Drawing on an original survey, we discuss the trends and challenges posed by the outsourcing and offshoring of business services. We document and analyse the increasing offshoring of business services (administrative services, call centres, IT services, procurement and product development) from USA and Europe to less developed countries, the functions offshored, size of offshorers, destination, and delivery models and explore the role of ICTs and the development of both large global services suppliers and entrepreneurial ventures in developed and less developed countries. We derive implications regarding outsourcing decisions, globalisation of high value adding activities, such as product development and innovation, raising issues of evolving market structure and the emergence of technical clusters where companies develop expertise to provide, and compete for, activities and skills across a range of sectors.

Outsourcing and Offshoring of Business Services: How Important is ICT?

This paper considers the impact that information and communication technology (ICT) has on firms' choices over organisational form. In particular, the decision over whether to produce in-house or outsource services, and the decision over the location of activity. ICT reduces the transaction and adjustment costs of moving activity outside the firm, and of carrying it out at greater geographic distance. We find that more ICT intensive firms purchase a greater amount of services on the market and they are more likely to purchase offshore than less ICT intensive firms.

Producer Services, Manufacturing Linkages, and Trade

Working with a mix of panel data on goods and services trade for the OECD for 1994–2004, combined with social accounts data (i.e. data on intermediate linkages) for 78 countries benchmarked to the panel midpoint, we examine the role of services as inputs in manufacturing, with a particular focus on indirect exports of services through merchandise exports, and also on the related interaction between service sector openness and the overall pattern of manufacturing exports. From the cross-section, we also develop a set of stylized facts linking services to the level of development and the density of intermediate linkages. We find significant and strong positive effects from increased business service openness (i.e. greater levels of imports) on industries like machinery, motor vehicles, chemicals and electric equipment, supporting the notion that off-shoring of business services may promote the competitiveness of the most skill and technology intensive industries in the OECD. Conversely, we find evidence of negative general equilibrium effects for sectors that are less service intensive.

Producer Services, Manufacturing Linkages, and Trade

Working with a mix of panel data on goods and services trade for the OECD for 1994-2004, combined with social accounts data (i.e. data on intermediate linkages) for 78 countries benchmarked to the panel midpoint, we examine the role of services as inputs in manufacturing, with a particular focus on indirect exports of services through merchandise exports, and also on the related interaction between service sector openness and the overall pattern of manufacturing exports. From the cross-section, we also develop a set of stylized facts linking services to level of development and the density of intermediate linkages. We find significant and strong positive effects from increased business service openness (i.e. greater levels of imports) on industries like machinery, motor vehicles, chemicals and electric equipment, supporting the notion that off-shoring of business services may promote the competitiveness of the most skill and technology intensive industries in the OECD. Conversely, we find evidence of negative general equilibrium effects for sectors that are less service intensive.

Effective strategies for internal outsourcing and offshoring of business services: An empirical investigation

The growing pressure to reduce costs and improve efficiency induces many organizations to undertake shared services initiatives. This consolidation and streamlining of common business functions is also known as insourcing, in-house services, business services, or staff services. While adoption of a shared service structure is viewed by many as an appropriate strategy to pursue, most companies still struggle to devise optimal strategies and to generate adequate returns on investments for their projects, because none of the approaches that are commonly adopted is recognized as universally effective. This paper builds upon the “structure-environment” perspective to uncover configurations of shared services organizations and to explain why and under what circumstances some of these configurations exhibit superior results. The conceptual model proposed challenges the notion of “best practice” and suggests that the effectiveness of a shared services project depends on the degree of complementarity between the “needs” arising from the environment in which a company operates and the specific capabilities developed to address these needs. The theoretical findings are validated empirically through the analysis of a large sample of European firms that recently undertook initiatives in this domain. Four dominant configurations of shared service organizations are uncovered, and their relationship to performance is explored.

Outsourcing and Offshoring of Business Services: How Important is Ict?

This paper considers the impact that information and communication technology (ICT) has on firms' choices over organisational form. In particular, the decision over whether to produce in-house or outsource services, and the decision over the location of activity. ICT reduces the transaction and adjustment costs of moving activity outside the firm, and of carrying it out at greater geographic distance. We find that more ICT-intensive firms purchase a greater amount of services on the market and they are more likely to purchase offshore than less ICT-intensive firms.

Offshoring of Business Services and its Impact on the UK Economy

Offshoring of Business Services and its Impact on the UK Economy