Moving from offshore outsourcing to captive offshoring - An implementation process analysis

Abstract

As a result of trade liberalization, technology development and worldwide competition, it has become common for service firms to source goods and services from low cost locations. The subject of offshoring and outsourcing is therefore widely discussed and the literature within this area is extensive. The trends of taking previously outsourced work back in house, so called captive offshoring, is relatively new and still an area where more research is needed. This study aims to observe and investigate the implementation process of moving from offshore outsourcing to captive offshoring by observing the transformation at two different locations within the same knowledge and technology driven service firm. Based on the case studies, two crucial phases and mechanisms in the implementation process have been identified, titled transformation readiness and transformation processes. The first phase was characterized by standardizing processes, planning and identifying the availability of resources and the installation support functions. The second phase involved knowledge transfer, recruitment, training, IT procurement and system access. The analysis results in a comparison of the two cases where decisions and activities lead to the creation of an adapted implementation model.