Does Experience Matter? Sources of Outsourcing Experience and its Impact on Outsourcing Attitude =- Empirical Evidence from the German Banking Industry

Previous studies indicate that prior experience of the outsourcer has an impact on the actual outsourcing evaluation. However, the question where this experience derives from remains unanswered. In an empirical analysis with Germany's 200 largest banks it is empirically shown that the level of experience indeed has a significant impact on senior management's attitude towards outsourcing. Furthermore, the analysis of the data reveals that close personal contact with prior outsourcing projects has the highest impact on management's level of experience. Interestingly, no significant impact is observed for indirect sources like former outsourcing experiences within the firm (intra-corporate knowledge), communication with peers and colleagues or the consultation of related business literature and newspapers. This research adds to the understanding of the influential factors which form senior management's cognitive position towards outsourcing. It calls for outsourcing service providers to thoroughly investigate and anticipate the personal history of their negotiating partner. Hers or his level of hands-on outsourcing experience clearly dominates the attitude formation towards outsourcing.