Global Sourcing of Business Processes: History, Effects, and Future Trends

The chapter reviews key drivers, trends, and consequences of global sourcing of business processes-the sourcing of administrative and more knowledge-intensive processes from globally dispersed locations. It is argued that global sourcing, which is also associated with 'offshoring' and 'offshore outsourcing', has co-evolved over the last three decades with the advancement of information and communication technology, a growing pool of low-cost, yet-often-qualified labour and expertise in developing countries, and increasing client-side global sourcing experience. It is shown how this dynamic has led firms to develop new global capabilities, governance and business models, changed the geographical distribution of work and expertise, and promoted the emergence of new geographical knowledge services clusters. Further, three new trends are introduced-the emergence of global delivery models, information technology-enabled service automation, and impact sourcing-and discuss future directions for research.