Abstract
The Jones Center at the Wharton School has been studying outsourcing, insourcing, and right-sourcing since 1991 [4]–[6]. Outsourcing, especially crossborder outsourcing, is increasing rapidly.1 The research questions being addressed in this study include,
-
How is outsourcing used most effectively?
-
What areas within the business should next be considered as areas for outsourcing?
-
What regions, and what technologies, will next become central to the increase in outsourcing?
-
What are the limitations to outsourcing? What applications should not be targets for outsourcing, which should not be considered appropriate for cross border outsourcing? For those areas deemed appropriate for outsourcing, what limits are there to outsourcing and how much should be retained for internal processing, if any?
-
What are the concerns of outsourcing clients and how can they be addressed when selling outsourcing services? How will these concerns affect profitability of vendors, and how will addressing them affect profitability?
A recent Gartner Group study of outsourcing done with the Wharton School suggests that the global market for Business Process Outsourcing will be $110 billion in 2003, and will grow by more than 9% annually, reaching $173 billion by 2007. The same study suggests that the North American market will likewise grow by more than 9% annually, from $69 billion in 2003 to $97 billion by 2007.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
References
Alchian, A. and H. Demsetz, “Production, Information Costs, and Economic Organization”, The American Economic Review, Vol. 62, 1972, pp. 777–795.
Brickley, J.A., C.W. Smith, and J.L. Zimmerman, Managerial Economics and Organizational Architecture, 2nd Edition, McGraw-Hill, 2000.
Chandler, A.D., The Visible Hand, Cambridge, Mass; Belknap Press, 1977.
Clemons, E.K., S.P. Reddi, and M.C. Row, “The Impact of Information Technology on the Organization of Economic Activity: ‘The Move to the Middle Hypothesis’”, Journal of Management Information Systems, Fall 1993, vol. 10, no. 2, pp. 9–35.
Clemons, E.K. and M.C. Row, “Information Technology and Industrial Cooperation: The Changing Economics of Coordination and Ownership”, Journal of Management Information Systems, Vol. 9, No. 2, Fall 1992, pp. 9–28.
Clemons, E.K. and M.C. Row, “Information Technology and Economic Reorganization” (E.K. Clemons and M.C. Row), Proceedings, 10th International Conference on Information Systems, December 1989, pp. 341–351.
Grossman, S. and O. Hart, “The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration”, Journal of Political Economy, Vol. 94, 1986, pp. 691–719.
Gurbaxani, V., “The NewWorld of Information Technology Outsourcing”, Communications of the ACM, Vol. 39, No. 7 (July 1996), pp. 45–46.
Joskow, P., “Vertical Integration and the Long-Term Contracts: The Case of Coal-Burning Electric Generating Plants”, Journal of Law, Economics, and Organization, Vol. 1, 1985, pp. 33–80.
Joskow, P., “Contract Duration and Durable Transaction-Specific Investments: The Case of Coal”, American Economic Review, Vol. 77, March 1987, pp. 168–185.
Joskow, P., “Asset Specificity and the Structure of Vertical Relationships: Empirical Evidence”, Journal of Law, Economics, and Organization, Vol. 4, 1988, pp. 95–117.
Klein, B., R.G. Crawford, and A.A. Alchian, “Vertical Integration, Appropriable Rents, and the Competitive Contracting Process”, The Journal of Law and Economics, Vol. 21, No. 2, October 1978, pp. 297–326.
Holmstrom, B., “Moral Hazard and Observability”, Bell Journal of Economics, Vol. 10, 1979, pp. 74–91.
Lacity, M.C., L.P. Willcocks, and D.F. Feeny, “IT Outsourcing: Maximize Flexibility and Control”, Harvard Business Review, May-June 1995, pp. 84–93.
Lacity, M.C., L.P. Willcocks, and D.F. Feeny, “The Value of Selective IT Sourcing”, Sloan Management Review, Spring 1996, pp. 13–25.
Milgrom, P. and J. Roberts, Economics, Organization, and Management, Englewood Cliffs, NJ, Prentice Hall, 1992.
Tirole, J., The Theory of Industrial Organization, MIT Press, Cambridge, 1988.
Williamson, O.E., Markets and Hierarchies: Analysis and Antitrust Implications, The Free Press: New York, 1975.
Williamson, O.E., “Transaction-Cost Economics: The Governance of Contractual Relations”, Journal of Law and Economics, Vol. 22, 1979, pp. 297–326.
Williamson, O.E., The Mechanisms of Governance, Oxford University Press, New York, 1997.
Quinn, J.B. and F.G. Hilmer, “Strategic Outsourcing”, Sloan Management Review, Summer 1994, pp. 43–55.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2007 Springer Science+Business Media, LLC
About this chapter
Cite this chapter
Clemons, E.K., Reddi, S., Asif, S. (2007). Understanding Sourcing as a Strategic Business: The Risks and Rewards of Strategic Sourcing and Inter-Firm Alliances In India. In: Apte, U., Karmarkar, U. (eds) Managing in the Information Economy. Annals of Information Systems, vol 1. Springer, Boston, MA. https://doi.org/10.1007/978-0-387-36892-4_6
Download citation
DOI: https://doi.org/10.1007/978-0-387-36892-4_6
Publisher Name: Springer, Boston, MA
Print ISBN: 978-0-387-34214-6
Online ISBN: 978-0-387-36892-4
eBook Packages: Business and EconomicsBusiness and Management (R0)