Differences in Benefit Perception According to Alternative Statuses of Business Process Outsourcing Adoption

Technology adoption theories propose that experience plays a major role in adopting or rejecting a new technology. This study analyses how the benefits of Business Process Outsourcing (BPO) as a major technological innovation are perceived differently, according to the BPO adoption status of the manager responsible. A survey of Germany's 200 largest banks has been conducted (response rate: 36.8%) to gather information on senior management's benefit perceptions. The responses were segregated into three groups, according to adoption status (level of experience): Pre-adopters, adopters and non-adopters. The groups report significantly different benefit perceptions. Cost savings, for example, are a benefit valued only by managers who have not yet outsourced a business process (pre-adopters). Experienced managers (adopters), on the contrary, recognize the major cost benefit in higher programmability of expenses. By applying technology adoption theories, this paper offers empirically grounded insights into senior management's benefit perceptions as an important antecedent of the outsourcing decision. This provides valuable contributions to theory and practice.