Process capability and performance in business services offshoring

Abstract

Service providers continually seek ways to improve their offshore delivery performance. In this study, we analyse detailed performance data from a large service provider that implemented a framework to enhance its process capability for services offshoring. We evaluate the extent to which process capability influences service delivery performance, and how the effect of process capability differs based on task complexity, process synergies, and length of experience with the new processes. Our results indicate that for non-complex tasks, service delivery performance improves significantly over time after new processes are introduced, particularly when process synergies are present. In contrast, for complex tasks there is an initial decline in performance after new processes are adopted. However, over time, performance on complex tasks increases at a faster rate than performance on non-complex tasks. Task complexity also reduces the effect of process synergies on performance, but this reduction attenuates over time.