Mousumi Modak

Khanindra Pathak

Kunal Kanti Ghosh

Abstract

Outsourcing has been a standard practice around the globe due to its proven mechanism in achieving competitive advantage. Though it is recognized as a strategic tool, providing a plethora of potential benefits, managers often encounter several difficulties associated with such a business decision. The study proposes a decision model (3W1H approach) based on the critical review of outsourcing literature that provides a fundamental guideline while making an outsourcing decision. The 3W1H approach entails four basic research questions as, what, why, where, and how, that disentangles the manifold subject of outsourcing thus facilitates the decision maker to investigate each important dimension of an outsourcing decision. The present study aids in identifying core and non-core activities within a business process that has been deliberated as one of the fundamental challenges of an outsourcing decision. Further investigation was made to understand in what way a firm should select its outsourcing partner in order to realize the potential benefits from outsourcing. The study also addresses exactly how a firm manages an outsourcing relationship and builds an outsourcing relationship management system. The findings of the present study contribute in formulating an effective outsourcing decision-making framework based on the rational foreground instead of subjective or cost minimization criteria that were practiced earlier.

Keywords- Outsourcing, core competency, supplier selection, supplier-buyer relationship, 3W1H approach