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To identify key lessons, trends and enduring challenges with global outsourcing of back office services.

The authors extract lessons, project trends, and discuss enduring challenges from a 20 year research program conducted by these authors and their extended network of co‐authors and colleagues.

The authors identify seven important lessons for successfully exploiting the maturing Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO) markets. The lessons require back office executives to build significant internal capabilities and processes to manage global outsourcing. The authors predict 13 trends about the size and growth of ITO and BPO markets, about suppliers located around the world, and about particular sourcing models including application service provision, insourcing, nearshoring, rural sourcing, knowledge process outsourcing, freelance outsourcing, and captive centers. The authors identify five persistent, prickly issues on global outsourcing pertaining to back office alignment, client and supplier incentives, knowledge transfer, knowledge retention, and sustainability of outsourcing relationships.

The authors present some experimental innovations to address these issues.

Although cloud computing has been heralded as driving the innovation agenda, there is growing evidence that cloud computing is actually a “slow train coming”. The purpose of this paper is to seek to understand the factors that drive and inhibit the adoption of cloud computing, particularly in relation to its use for innovative practices.

The paper draws on a composite research base including two detailed surveys and interviews with 56 participants in the cloud supply chain undertaken between 2010 and 2013. The insights from this data are presented in relation to set of antecedents to innovation and a cloud sourcing model of collaborative innovation.

The paper finds that while some features of cloud computing will hasten the adoption of cloud, and its use for innovative purposes by the enterprise, there are also clear challenges that need to be addressed before cloud can be adopted successfully. Interestingly, the analysis highlights that many of these challenges arise from the technological nature of cloud computing itself.

The research highlights a series of factors that need to be better understood for the maximum benefit from cloud computing to be achieved. Further research is needed to assess the best responses to these challenges.

The research suggests that enterprises need to undertake a number of steps for the full benefits of cloud computing to be achieved. It suggests that collaborative innovation is not necessarily an immediate consequence of adopting cloud computing.

The paper draws on an extensive research base to provide empirically informed analysis of the complexities of adopting cloud computing for innovation.

Nearly all legal firms and in‐house counsels will have to consider the opportunities and risks afforded by the rapidly changing legal process outsourcing (LPO) market, estimated to be worth $2.4bn globally, and growing rapidly. The purpose of this Industry Insight is to assess the current LPO provider landscape by analyzing data on 27 LPO providers.

The authors analyzed LPO provider data collected in 2011 by Orbys, a leading sourcing and transformation advisory firm based in Europe. The 27 providers in the sample include specialist LPO providers, full service LPO providers, and global BPO providers that offer LPO services. The authors assessed LPO provider services, provider competencies, geographic location, pricing, team composition, and staff turnover rates.

The LPO providers in the sample provide a variety of services, including litigation, intellectual property, corporate, compliance, procurement, employment, property, and consulting services. LPO providers allocated most of their human resources to litigation (26 percent), intellectual property (14 percent) and corporate/compliance (12 percent) services. LPO providers balance team composition – the percentage of onshore resources located close to the client versus offshore resources in low‐cost locations – to reduce client costs while still delivering quality services. The average team composition average was 22 percent of resources onshore and 78 percent of resources offshore, mostly in India. The authors also analyzed LPO prices by skill level and location. For example, the average daily rate for a fully qualified lawyer based in India was $248. LPO provider turnover rates ranged from 3 percent to 34 percent, with an average turnover of 15 percent.

This research on the LPO provider landscape helps to inform potential clients about LPO services and the global LPO landscape. The authors also identify three practices to help clients achieve success with LPO engagements. First, consider overall value, not just price. Second, mediate the effects of high LPO provider turnover. Third, assess and develop client‐retained capabilities, because outsourcing legal services is not about abdicating responsibility, but about learning to manage legal services in a different way.

Legal process outsourcing is the next evolution in the provision of services. Because the LPO market is less mature than the information technology outsourcing (ITO) and business process outsourcing (BPO) markets, very little research has been done on LPO in general or on LPO provider capabilities specifically. This Industry Insight helps to bridge the knowledge gap.

This paper aims to explore the expertise level required in various kinds of business knowledge such as regulatory, domain, strategic, operation process and, business process to execute globally distributed software projects for development, re-engineering and maintenance projects in the Indian outsourcing software industry.

This study adopted a questionnaire survey method to collect the expert responses for a knowledge management framework which is suggested in the literature for software development work. The questionnaire survey findings were verified by expert interviews.

The research shows that there is a lot of similarity between re-engineering and maintenance projects for different kinds of business knowledge expertise requirements for execution. The development projects require higher expertise in all the business knowledge for execution.

The research work studies the business knowledge required for the execution of development, re-engineering and maintenance projects in Indian outsourcing software projects. However, the project’s characteristics can vary drastically for a single kind of project. So the study cannot be generalized and instead should be used as a tool for learning.

The research findings can be used by software project managers to get insight into project planning, which can help the division of work between the onsite, offshore team and individual work allocation.

The research is novel as there are very few previous attempts to find the business expertise needed to execute various kinds of software projects in the Indian outsourcing industry.

The purpose of this paper is to provide industry insights on the business models, practices, and capabilities that suppliers need to deliver cost‐effective information technology (IT) outsourcing services from rural locations within the USA. As rural outsourcing has not yet been studied by academics, many questions have not yet been answered. How can suppliers attract enough talent to rural areas to make rural outsourcing viable? How can suppliers scale operations? Will the value proposition attract serious clients? An ongoing research project was launched to answer these and other questions about rural outsourcing. This paper aims to report on the first set of findings based on four case studies.

This paper reports on the results from four case studies of rural outsourcing suppliers. In total, 35 semi‐structured interviews were conducted with founders, executives, delivery center managers, and delivery team members and a visit was made to a rural delivery center owned and operated by each of the four suppliers.

After comparing and contrasting the value propositions, location strategies, human capital development, and scalability of operations across the cases, in general, it was found that rural outsourcing suppliers position their value proposition as lower in price than urban outsourcing but higher in value than offshore outsourcing. Rural outsourcing suppliers achieve this value proposition by locating delivery centers in low‐cost areas and by recruiting, developing, and retaining a high‐performing workforce. Rural suppliers scale operations either by building multiple, small‐sized delivery centers or by building one large delivery center.

There are still many aspects of this phenomenon that warrant additional study. The paper identifies areas of future research pertaining to client experiences, competition from large suppliers, government support, and rural outsourcing in countries outside the USA.

The paper identifies five lessons for practice: rural outsourcing works best when clients engage a team to deliver a service; rural outsourcing is not freelance outsourcing or staff augmentation; rural outsourcing addresses an unfilled gap in a client's sourcing portfolio; rural outsourcing suppliers will continue to move up the value chain; and most rural outsourcing suppliers operate best on a sell‐build sequence, so clients should plan ahead.

This paper reports on industry insights from one of the first known, ongoing academic studies of rural outsourcing.

The major problems experienced in implementing IT systems in the public sector are reviewed. Detailed UK research, carried out in the Department of Social Security and the National Health Service, is then considered. Many projects sub‐optimise due to neglect of the human aspects of computerisation, broadly conceived. It is concluded that establishing 16 success criteria still need to be imported into many IT projects if effective systems are to result.

This paper aims to answer the question: how do clients and BPO service providers work together to foster dynamic innovation? Dynamic innovation is a process by which clients incent providers to deliver many innovations each year that improve the client's performance in terms of operational efficiency, process effectiveness and/or strategic impact.

The paper is based on research conducted in 2011 and 2012 and includes 202 survey responses and 48 in-depth interviews in 24 client organizations.

The most effective innovation incentives are mandatory productivity targets, innovation days, and gain-sharing at the project level. Threat of competition and special governance arrangements for innovation also positively influence innovation. The least successful incentives for innovations were found to be innovation funds, gainsharing at the relationship level, what has been called “pain-sharing”, and benchmarking.

The 24 BPO relationships do not represent a random sample, but rather a convenience sample. The authors aimed to understand emerging best practices from high-performing BPO relationships, thus the paired interview samples are purposefully biased towards higher-performing relationships.

Delivering innovations requires a process the authors call AIFI – acculturating, inspiring, funding, and injecting. The research finds that leadership pairs are key drivers of the dynamic innovation process. Leadership pairs jumpstart the dynamic innovation process by starting with innovation incentives. Even so, just having one right leader makes a positive difference. The positive difference is stronger if that leader is on the client side rather than the provider side. With no right leaders, the practices that the authors describe are less efficacious but still have positive impacts on the levels of innovation experienced.

In the ITO and BPO literatures, researchers have under-examined the more strategic drivers of outsourcing, including innovation. This research examines the process and practices that deliver dynamic innovation in client organizations.

The study aims to provide a critical review of the extent to which digital technologies are likely to replace human labour, the exponential rise in the amount of work to be done and how far distinctively human skills are future-proofed and therefore likely to be in short supply. It reviews the evidence for a permanent switch to home and remote working enabled by emerging technologies. It assesses the business, digital and labour strategies of work organisations and the promise and challenges from a dominant trend towards a digitally enabled flexible labour model.

A critical review of 1020 plus case studies and the extant literature was carried out.

The relationship between emerging technologies and work is widely misunderstood, and there are major qualifiers to the idea of an overwhelming tsunami of technology drastically reducing headcounts globally. Distinctive human skills remain valuable, the amount of work to be done is increasing exponentially and automation is becoming more a coping than a labour replacement mechanism. Moves to a hybrid digitalised flexible labour model are promising but not if short-term, and if the challenges they represent are not managed well.

The main limitation is that we are making projections into the future, though we are drawing on a lot of different sources and evidence and past data projected into the future.

The problem is not labour displacement but large skills shortages that will slow down the speed of technology adoption. Skills development is vital, as is the taking of long-term perspectives towards the management of hybrid, flexible working based on human-machine interactions.

Organisations need to revitalise their training and development and labour management models. Governments and intermediary institutions need to manage transition states if the skills required to gain economic growth are to be available, and to ensure that large labour pools do not get bypassed from not having requisite skills.

The study offers a more subtle and complex perspective on the emerging evidence about the future of technology and work.

How have managers handled the industrial relations ramifications of information technology? There is a diversity of approaches within an overall framework of employee acceptance of the need for technological change. However, the introduction of new technology is rarely handled strategically in the industrial relations area, and there is much to be learnt from approaches adopted by a small minority of mostly foreign‐owned organisations. The authors conclude by asking whether or not patterns will change in the 1990s.