EconPapers    
Economics at your fingertips  
 

Value Gains in Business Process Outsourcing: The Vendor Perspective

Sukruth Suresh () and T. Ravichandran ()
Additional contact information
Sukruth Suresh: St. John Fisher College
T. Ravichandran: Rensselaer Polytechnic Institute

Information Systems Frontiers, 2022, vol. 24, issue 2, No 19, 677-690

Abstract: Abstract Business Process Outsourcing (BPO) is a contemporary phenomenon that has gained significant traction in recent years. Like other forms of outsourcing, BPO is both beneficial and risky. While extant research has examined the risks in outsourcing for clients, a limited insight exists on the risks associated with BPO for vendors. We examine the contexts in which the value proposition of BPO varies for vendor firms based on the risks associated with the contract. The risk in this context is posited to vary based on the type of task outsourced, the outsourcing motivation of the client and the duration of the contract. Using a sample of 231 BPO announcements over a thirteen-year period, we test our hypotheses using an event study. We find that BPO creates significant value gains for vendor firms, particularly for knowledge intensive processes. In addition, vendors lost value when they were sought out to develop specific capabilities for the clients that involved knowledge intensive processes. While vendors benefited from longer duration contracts, these benefits were not found to significantly vary across the different types of tasks outsourced.

Keywords: Business process outsourcing; BPO; Outsourcing risk; Event study (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10796-021-10111-1 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:infosf:v:24:y:2022:i:2:d:10.1007_s10796-021-10111-1

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10796

DOI: 10.1007/s10796-021-10111-1

Access Statistics for this article

Information Systems Frontiers is currently edited by Ram Ramesh and Raghav Rao

More articles in Information Systems Frontiers from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-20
Handle: RePEc:spr:infosf:v:24:y:2022:i:2:d:10.1007_s10796-021-10111-1