Published in «Russian Journal of Entrepreneurship»1 / 2019
DOI: 10.18334/rp.20.1.39759

Outsourcing development factors in the information economy

Tagarov Bato Zhargalovich, Baikal State University, Russia

Факторы развития аутсорсинга в информационной экономике - View in Russian

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Highlights:
• The specific features of outsourcing are: 1) business process performed previously independently is transferred to the external environment; 2) long-term relationships between the parties; 3) supplier is fully responsible for the result.
• The effectiveness of business process outsourcing depends on the ratio of the external transaction costs value of supplier performance quality management and the extent of losses from his opportunistic behaviour.
• There is a risk of moral hazard due to the monopoly power of the service provider outsourced. This arises because of the high costs associated with a change in supplier.
• Outsourcing requires not only the information costs saving of interaction, but also the establishment of institutional mechanisms that prevent opportunistic behavior of suppliers, in particular, preventing the building of barriers to their customer attrition.
• Standardization of information technologies in the modern economy reduces the costs of interaction with external suppliers, which increases the efficiency of outsourcing.
• The increasing rate of change in the modern economy forces companies to increase the adaptability of organizational structure, which provides them an incentive to eliminate support business processes, by outsourcing them.
• The growth of information capacity of goods and services leads to increased opportunities for outsourcing, since the content purchase and consumption do not depend on the geographical location of the manufacturer and the consumer.
• Content production is associated with economies of scale. Therefore, it is more financially advantageous for companies to purchase them from a third-party supplier than to produce them on their own.

Abstract:
The author analyzes approaches to definition of “outsourcing“ and defines its specific characteristics. The author identifies long-term relationships between the parties and the need for investment in particular assets as the basic specific features of outsourcing. The influence of informatization of economy on the outsourcing development is examined. Factors that encourage organisation to receive a motivation to transfer business processes to the external environment are identified. The author shows that in the information economy the outsourcing development is influenced by reduction of transaction costs, standardization of business processes and products, rapid changes in the external environment and increase in the information capacity of goods and services. The impact of these factors is analysed.

Keywords:

firm adaptability, information economy, outsourcing, specific assets, transaction costs

JEL-Classification: D22, D23, D83

Citation:
Tagarov B.Zh. (2019). Outsourcing development factors in the information economy [Faktory razvitiya autsorsinga v informatsionnoy ekonomike]. Russian Journal of Entrepreneurship, 20(1). (in Russian). – doi: 10.18334/rp.20.1.39759.


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