Organizational Learning and Capabilities for Onshore and Offshore Business Process Outsourcing

This paper identifies and analyses firm-level characteristics that facilitate onshore and offshore business process outsourcing (BPO). We complement and extend prior IS outsourcing research using organizational economics by using organizational learning and capabilities to develop a conceptual model. We test the conceptual model with archival data on a broad cross-section of U.S. firms. Our empirical findings indicate that firms with experience in onshore IT outsourcing (ITO) and capabilities related to IT coordination applications and business process codification are more likely to engage in BPO, firms with experience in internationalization are more likely to engage in offshore BPO, IT coordination applications have a greater impact on onshore BPO than on offshore BPO, and the effect of business process codification is partly mediated through ITO