Outsourcing Decision-Making: A Review of Strategic Frameworksand Proposal of a Multi-Perspective Approach

Abstract

In recent years, outsourcing deals have increased in number and the strategic importance of the decision-making process has correspondingly increased. This chapter reviews various strategic frameworks that practitioners have attempted to develop for outsourcing decision-making and highlights the differences between proposed theories and current practice. While outsourcing decision-making is multi-faceted in nature, the frameworks reviewed appear to be largely mono-faceted in coverage, which indicates potential inadequacies in existing capabilities. The chapter proposes a framework to address such inadequacies by means of a tri-perspective approach, which extends the decision-making process to take into consideration issues from multiple domains. The proposed framework highlights a wide variety ofissues, ranging from the need to maintain internal expertise, to how national legislations can enforce unique constraints on the outsourcing decision-making process. The framework also attempts to provide a multi-perspective approach, which is required of current outsourcing decision-making practices, to enable both quantitative measurements and qualitative articulations.