Redefining the paradigm of global competition: offshoring of service firms

Abstract

Purpose The article discusses offshoring as an irreversible trend that is redefining the paradigm of global competition of service firms, and provides insight and practical advice regarding the offshore behavior of service firms for management professionals. Design/methodology/approach The offshoring process is applied to service firms including lessons learned. It is largely based on the results of a research study among 247 service firms determining their offshore behavior and illustrated with examples of their offshoring activities. Findings Offshoring is redefining global competition and service firms should use it as a tool to create a competitive advantage vis‐à‐vis their competitors. In doing so they should careful prepare offshoring in different phases of the process as suggested in the 4M approach. Moreover, they should decide in an early stage on monitoring, reporting and measuring the offshoring process and secure continuous commitment from management. Research limitations/implications The offshoring process referred to in this article as the 4M approach should be further tested among service firms. Practical implications Providing insight and practical advice regarding the offshore behavior of service firms for management professionals. Originality/value Research in the past has been largely focused on manufacturing firms. This article focuses on service firms and is based on findings of primary research executed by the authors.

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