Task attributes and process integration in business process offshoring: A perspective of service providers from India and China

Abstract

This study addresses an important issue in designing and managing business process offshoring (BPO): process integration between an offshore service provider and its global BPO client. We applied the information-processing lens in global BPO and developed the logic that internationally disaggregated process integration requires a fit between process integration and BPO's task characteristics (i.e., task complexity and security) and task interdependence (task connectivity, stickiness, and dependency). This alignment is further moderated by the task context, such as the geographic dispersion of the global client's end-customers and the type of offshore provider (independent vendor vs captive and joint venture). Finally, we suggest that process integration has a positive but curvilinear relationship with the economic returns achieved by offshore providers. Our analysis of 308 BPO companies in India and China supports our propositions. We conclude that international managers monitoring and integrating globally disaggregated activities in BPO should establish a proper alignment with the BPO project's task traits and task interdependence, and look closely at the conditioning effect of external complexity. By redressing the paucity of research on governing global BPO, this study offers some insights into the integration–externalization dynamics for growing business/knowledge process offshoring.

Appendices

APPENDIX A

Table A1.

Table A1 Literature review and summary on BPO governance, determinants, and BPO outcomes

APPENDIX B

MAJOR SURVEY ITEMS

1. Economic Returns Achieved by BPO Provider

(Hult et al., 2008; Lewin & Peeters, 2006; Poppo and Zenger, 1998)

Please rate the following as compared with your close domestic competitors (1=lowest 20% in the industry; 5=highest 20% in the industry).

• 1) Client satisfaction

• 2) Cost reduction

• 3) Reputation

• 4) Knowledge accumulation

2. BPO Process Integration

(Aron & Singh, 2005; Ettlie & Reza, 1992; Luo et al., 2010): 5-point Likert scale

• 1) Frequency of the global client's project management team in on-site checking of the service quality and security you offer at your location.

• 2) Frequency of communication and coordination between your company and the global client on project progress and implementation.

• 3) Process coupling between your company and the global client is so high that if your services are inferior, the global client's entire business or value chain will be significantly hurt.

• 4) Process integration is so high that you have to follow the same protocols, standards, and cultures specified by the global client to serve its global customers.

3. Task Complexity

(Stringfellow et al., 2008; Zander & Kogut, 1995): 5-point Likert scale

• 1) BPO task is always so sophisticated that you have to deploy a large workforce from different units to work on it.

• 2) BPO task fulfillment requires a great deal of specialized knowledge in different disciplines.

• 3) It is extremely difficult to standardize processes and procedures for your company's BPO projects.

4. Task Security

(Aron & Singh, 2005; Narayanan et al., 2011): 5-point Likert scale

• 1) The client always attaches the utmost important to information security.

• 2) Security is your overriding priority in training, services, and policymaking.

• 3) You have strict and stringent rules to safeguard customer information.

5. Task Connectivity

(Sparrow, 2003; Willcocks & Lacity, 2006): 5-point Likert scale

• 1) To what extent does your BPO task require interfunctional or interdepartmental collective efforts?

• 2) To what extent does your BPO task require coordination and interdependence among functions or processes?

• 3) To what extent is the entire BPO task indivisible, such that if one function or process fails the entire task will fail?

6. Task Dependence

(Luo et al., 2010)

Please rate the extent to which the global client must depend on your services:

• 1) Not very dependent

• 2) Somewhat dependent

• 3) Very dependent

7. Task Stickiness (coded by the authors)

(Aron & Singh, 2005; Kumar et al., 2009; Srikanth & Puranam, 2011)

• 1) Not sticky

• 2) Partial sticky

• 3) Fully sticky

8. End-Customer Geo-breadth

In about how many countries are the global client's end-customers or end-users located?

• 1) <10

• 2) 11–20

• 3) 21–30

• 4) Over 30

9. Relational Ties

(Zaheer & Venkatraman, 1995; Zhou, Poppo, & Yang, 2008): 5-point Likert scale

• 1) You frequently use personal contacts, help, and advice from the client throughout the BPO process.

• 2) You have established a culture such that every party or member cooperates with each other in the BPO process.

• 3) Teamwork spirit and mutual support prevail widely.

APPENDIX C

Table C1

Table C1 Task stickiness and offshore business processes