Transition During Offshore Outsourcing: A Process Model

In recent years, outsourcing has become a ubiquitous phenomenon. Despite extensive research, several examples of outsourcing failure are prevalent. In this paper, complimenting the strategic and economic studies on outsourcing, we focus on the operational execution challenges by examining transition phase, which starts immediately after contract signing and involves the critical transfer of outsourced activities from client to vendor firm. We conceptualize and illustrate transition as interplay of three connected organizational processes: transfer, learning and adaptation. Using an in-depth, longitudinal case study of an offshore outsourcing engagement, we develop and explain a transition process model, consisting of three phases – familiarize, adapt and accelerate. For each phase, the model identifies dominant organizational processes, key factors and triggering condition for progression to the next phase.