Global Outsourcing of Knowledge-Based Services: Strategy and Relationships

Abstract. Supply Chain professionals (SCP) and senior executives are facing new challenges in the new world of global outsourcing of knowledge-based services. These services include managing outsourced customer service, software, and R&D. Supply Professionals are abruptly asked by senior management to find vendors for a particular task to be outsourced, draw up contracts, and transition the task and thereafter be at least partially responsible for the delivery quality, price, and many other tasks including innovation and new product development from the service provider. Our research suggests that it is really important for supply management professionals to be closely involved at the transition of the outsourced task and the early part of the provider relationship. Such early involvement in setting up the working relationship with the provider will facilitate projected cost savings and also sustain the quality of purchased services. Above all, such early involvement of supply management will enable the effective management of the supply chain intellectual property and sustain innovation generation in the upstream knowledge services supply chain. Background. As outsourcing moves from low-end services to knowledge-based services, public outcry has grown about American job losses. In the heat of this debate, questions suc