IT Enabled Business Process Onshore Outsourcing: An Empirical Analysis

IT-enabled business process onshore outsourcing (BPOnO) in relationship to the community banking industry has grown steadily for the past several years. Business processing onshore outsourcing in comparison to offshore outsourcing uses firms within a country's own geographic boundaries to address back-end processes such as accounting, payroll, and customer support. Many banks are evaluating the different onshore outsourcing opportunities to determine if this approach is truly a viable one. The authors propose that most community banks are using onshore outsourcing and find that there are factors such as cost and enhanced capabilities that are the drivers of this adoption. A survey was designed to gather data from members of the North Carolina Bankers Association to identify the services that they are outsourcing and to determine if through the use of these services they have achieved enhanced capabilities, increased profitability, and reduced operating costs. The results of this study will assist banking executives in identifying business functions that are currently being outsourced by their peers, those that will be outsourced in the future, and those that will to never be outsourced.