Outsourcing: assessing the risks and benefits for organizations, sectors and nations

Purpose – This research aims to assess the risks and benefits of outsourcing for organisations, sectors and nations. The literature on outsourcing contains little evidence of research on holistic issues of its impact at systems levels beyond the firm, notably sectors and nations.Design/methodology/approach – A Delphi study with senior strategists from private and public sectors captured perspectives and specific observations on benefits and risks of outsourcing. Emergent issues on outsourcing policy, strategy and decision-making processes were synthesised into a framework for analysing factors associated with outsourcing.Findings – The findings suggest that a more holistic view of outsourcing is needed, linking local, organisational issues with sector and national level actions and outcomes. In this way, aggregate risks and benefits can be assessed at different systems levels.Research limitations/implications – Future research might address the motivations for outsourcing; currently there is little research evidence to assess whether outsourcing is a mechanism for failing to solve internal problems, and moving responsibility and risk out of the firm. Additionally most outsourcing research to date has concentrated on an activity either being “in” or “out”; there is little research exploring the circumstances in which mixed models might be appropriate.Practical implications – The framework provides an aid to research and an aide memoire for managers considering outsourcing.Originality/value – This paper contributes to knowledge on understanding of outsourcing at different systems levels, particularly highlighting the implications of outsourcing for sectors and nations. Previously most research has focused at the level of the firm or dyadic relationship.