Impact of Customer Traffic and Service Outsourcing on Service Triad Performance

Many information intensive service firms deliver services through a mix of internally delivered (i.e., insourced) and externally delivered (i.e., outsourced) service process components. We examine data on top e-retailers. We expect outsourcing levels may moderate the impact of customer traffic upon e-retailer operating outcomes. We first examine drivers of the e-retailers’ propensity to increase outsourcing levels. We then examine whether customer traffic and outsourcing levels relate to the firms’ operating outcomes, in terms of operational performance and satisfaction. We find customer traffic is positively associated with outsourcing levels, and that outsourcing levels interact with customer traffic to determine operating outcomes.