The perceived benefits of business process outsourcing: An empirical study of the German banking industry

Abstract

Purpose – The purpose of this paper is to provide an in‐depth analysis of the benefits senior management associate with business process outsourcing (BPO) and how these benefits are valued against each other.Design/methodology/approach – A quantitative empirical study of the 200 largest banks in Germany was conducted: 218 senior managers from 126 different banks responded giving a response rate of 36.8 per cent. The answers were analysed using the partial least squares method (PLS).Findings – The quantitative analysis shows surprising findings. A remarkable one is that there is a significantly higher value associated to the programmability of cost in a BPO case than to actual cost savings. This implies that the BPO market gained in maturity and that banks are much more critical to the marketing statements of outsourcing service providers than in previous years.Research limitations/implications – This paper supports the case for a more detailed analysis of the benefits associated with BPO. Although it is e...