Dynamic outsourcing through process modularization

Purpose – The purpose of this paper is to introduce a dynamic outsourcing framework for making and implementing process outsourcing decisions in a rapidly changing environment. Design/methodology/approach – The theoretical framework incorporates three major concepts/techniques: the order winner concept to identify strategic level competitive priorities, the modularization concept to reconfigure enterprise organizational structure, and the analytical hierarchy process technique for linking critical demand attributes with process modules at the operational level. Findings – The study presents a dynamic outsourcing approach through organizational modularization and shows when and how core and non‐core activities can be outsourced in a fast changing market. Research limitations/implications – The complexities of the framework will need facilitation and supports on issues such as organizational modularity, multi‐goal optimization, and empirical validation. Practical implications – This paper offers practical insights and clarifies common confusions associated with strategic outsourcing. Originality/value – The paper tries to fill the gap between the existing outsourcing literature and the practical need for choosing specific outsourcing activities at the operational level. The dynamic framework creates a foundation for continuous process improvement on a cyclic basis.