Towards a framework for performing outsourcing capability

Abstract

Purpose � The aim of this paper is to go beyond the �What to outsource� and �To Outsource or Not� debate. Recognizing outsourcing as a fast growing reality that firms have to depend upon, the paper concerns itself with optimal management of outsourcing arrangements through the practice of �outsourcing capability�. It argues that outsourcing failure can be mitigated if organizations see outsourcing as an �ongoing activity� to be managed as opposed to treating it as a one-time opportunistic �act�. Design/methodology/approach � Based on the review of existing literature and drawing upon recent instances of outsourcing successes and failures, the paper develops a conceptual framework which divides various organizational processes into four different classes. It delineates the varied aspects of �outsourcing capability� that a firm would need to use to manage these varied class of processes as and when they are outsourced. Findings � There is no �one-size-fits-all� approach to managing outsourced processes. Different processes require emphasis on different aspect of outsourcing capability if outsourcing is to deliver the envisaged benefits. Originality/value � The traditional focus in outsourcing literature has been on the core/non-core process with the recommendation to keep core processes in-house and outsource the non-core processes. This distinction can be transitory and hence detrimental in the era of hyper-competition. I argue that firms should instead focus on developing and refining aspects of �outsourcing capability� relevant to the varied class of processes that they wish/need to outsource. � Emerald Group Publishing Limited.