Recognising the Need for a Context Sensitive Decision Making Framework for Cosourcing - A Case Study in the Financial Service Sector

The incidence of cosourcing – or the provision of standardised services to a group of organisations – appears to be on the increase. Based upon economies of scale, and resource based and resource dependency theories this paper presents a decision making framework to help organisations understand why, and for what, cosourcing is appropriate. A case study of the Australian financial services industry was conducted to test that framework. The case study suggested that there are more potential benefits to cosourcing than first envisaged and that these will vary across organisations. Furthermore it was discovered that multiple forms, or flavours, of cosourcing have emerged for the same activity in the same industry influenced by, and accommodating, the differing contexts and capabilities of organisations. Finally the case study highlighted that while the existence of multiple cosourcing arrangements helps mediate dependency on suppliers, dependencies and tensions may develop between the organisations involved in cosourcing themselves – particularly if there is a divide in the roles played with, for example, some, and only some, serving as shareholders in the venture as well as customers of it. In conclusion it would appear that it is necessary to move beyond a focus on universal motivators and shapers of the cosourcing decision to consider in more detail the specifics of the organisations involved and the cosourcing arrangement planned . The range of benefits and variety of cosourcing arrangements available however also suggest that the potential for cosourcing may be greater than first thought if the tensions can be minimised.