Outsourcing of front-end business processes: Quality, information, and customer contact

Karthik Balakrishnan, Usha Mohan, Sridhar Seshadri

Research output: Contribution to journalArticlepeer-review

Abstract

We examine the recent supply chain phenomenon of outsourcing front-end business processes in this paper. Few, if any, of the existing theories provide satisfactory explanation for the rapid growth in this area. We use a model proposed by Sridhar and Balachandran [Sridhar, S.S., Balachandran, B.V. 1997. Incomplete information, task assignment, and managerial control systems. Manage. Sci. 43(6), 764-778] to determine the factors that might contribute to this phenomenon. Our analysis reveals that the ability of the vendor to forecast the task environment without bias and to gain sophistication in interpreting contract terms might make the firm indifferent between outsourcing and retaining front-end processes in-house. We validate our findings against the work of Apte and Mason [Apte, U.M., Mason, R.O., 1995. Global disaggregation of information-intensive services. Manage. Sci. 41(7), 1250-1262], who develop a theoretical framework to identify criteria for companies to select services to be outsourced. They base their decisions predominantly on the nature of "customer contact." The combined theories are shown to provide a rich framework for identifying customer-facing tasks that can be outsourced.

Original languageEnglish (US)
Pages (from-to)288-302
Number of pages15
JournalJournal of Operations Management
Volume26
Issue number2
DOIs
StatePublished - Mar 2008
Externally publishedYes

Keywords

  • Call centers
  • Customer contact
  • Incomplete information
  • Outsourcing
  • Quality
  • Task assignment

ASJC Scopus subject areas

  • Strategy and Management
  • Management Science and Operations Research
  • Industrial and Manufacturing Engineering

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