Determinants of Outsourcing Trajectory: A Literature Review

Abstract

Outsourcing refers to transferring clients’ value chain activities to independent providers and procuring the necessary goods and services from them. Outsourcing has been used over the years both as a concept and a strategy, due to its ability to realize numerous benefits to business organisations. While outsourcing is considered as a fashionable management technique and a strategy to achieve competitive advantages of business organisations, the existing literature on the concept reports not only success stories, but also failure stories of outsourcing arrangements. Outsourcing trajectory to be considered as such succeeded or failed, it is because of how those success and failure factors exist or how those factors have been addressed within an outsourcing arrangement. While the existing literature comprises of research which has addressed the success and failure factors of outsourcing separately, the studies which discuss these factors together are no or less found. Having an overall picture of the determinants that will decide the success or failure of an outsourcing effort is important for the practitioner to plan and implement an outsourcing effort effectively without leaving any room for a failure. Accordingly, this research was carried out to find the answer to the research question ‘What are the determinants of outsourcing trajectory that can be derived from success and failure factors of outsourcing?’. This research question was addressed through a comprehensive literature review which identified twenty-nine (29) success factors and thirty-two (32) failure factors and, a manual content analysis which resulted in twenty-three (23) factors as the determinants of outsourcing trajectory. The consideration of these determinants of outsourcing trajectory can enhance the chances of successes and minimize the failures of outsourcing arrangements, and also minimize the associated risks with such outsourcing failures. Further, the identified factors can be employed for future research to evaluate the significance of each of them to determine the success or the failure of an outsourcing arrangement.