Global Sourcing of Business Processes: History, Effects, and Future Trends
Manning, S., Larsen, M.M., Kannothra, C.G. 2017. “Global Sourcing of Business Processes: History, Effects, and Future Trends”. In: Clark, G.L., Feldman, M.P., Gertler, M.S., Wojcik, D. (Eds.): The New Oxford Handbook of Economic Geography. Oxford, UK: Oxford University Press, Forthcoming
28 Pages Posted: 30 Aug 2016 Last revised: 25 Oct 2016
Date Written: August 26, 2016
We review key drivers, trends and consequences of global sourcing of business processes – the sourcing of administrative and more knowledge-intensive processes from globally dispersed locations. We argue that global sourcing, which is also associated with ‘offshoring’ and ‘offshore outsourcing’, has co-evolved over the past three decades with the advancement of information and communication technology (ICT), a growing pool of low-cost, yet often qualified labor and expertise in developing countries, and increasing client-side global sourcing experience. We show how this dynamic has led firms to develop new global capabilities, governance and business models, changed the geographic distribution of work and expertise, and promoted the emergence of new geographic knowledge services clusters. We further introduce three new trends – the emergence of global delivery models, ICT-enabled service automation, and impact sourcing – and discuss future directions for research.
Keywords: Outsourcing, offshoring, business processes, geographic clusters, new business models, information and communication technology
JEL Classification: J23, J24, J44, J31, M51, M53, M54, L14, L21, L22, L24, L84, O14, R11, P45, P48, F59, F21, F22, F23
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