Sourcing decisions in the finance sector: current state and focus on economies of scale and knowledge management

In this paper we will analyse sourcing decisions in the finance sector, dealing with a mature area, IT outsourcing and a relatively new field, operations outsourcing. For introducing this topic, we will first detail the current state in outsourcing of IT processes and services, using several studies already published and also a new empirical investigation of Austria's top 100 companies. More importantly, the trend towards operations outsourcing in the finance sector will be discussed. We will analyse the operations sourcing decision in general and give special consideration to economies of scale as one of the main drivers of this development and the relationship to knowledge management. Knowledge management can be enhanced by some sourcing options or constitute a prerequisite. Then, critical success factors for setting up and managing an outsourcing relationship will be given, again with special consideration of operations outsourcing.