The outsourcing practice among small knowledge-intensive service firms

Abstract

Purpose This paper aims to present findings on outsourcing practices in small service firms in Iceland, where the prime focus is on knowledge-intensive service firms. Design/methodology/approach To gain information on the scope and reason for outsourcing, telephone and online surveys were used. In total, 802 firms participated in the surveys, which were conducted in the period 2009-2018. Findings The results show that knowledge-intensive firms outsource far more than other service firms and are also more likely to have an outsourcing strategy. The grounds for increased outsourcing are cost reduction and strategic reasons, such as a focus on core competency and the search for external knowledge. In comparison with other firms, knowledge-intensive firms are increasingly outsourcing cleaning, security services, canteen and transportation, IT processes, human resource management, training and consulting. Additionally, managers of these firms select suppliers more on the basis of cost and quality. They also realize more cost savings as a consequence of outsourcing. Outsourcing had a very limited effect on employment in the firms, while cost reduction was achieved in 48.3 per cent of the firms involved. Research limitations/implications The findings are in line with the resource-based theory and, interestingly, this is not limited to knowledge-based firms, but to a large portion of service firms as well. Originality/value This is the first in-depth study on outsourcing patterns in knowledge-intensive firms, which uses theoretical classification in empirical analysis.

The mediating role of knowledge generation between training and development of human talent and innovative performance

“…In this way, technology within KG is one of the main components of business success; in addition, it also provides benefits for employee TD, allowing higher productivity, lower operating costs and higher revenues (Casalino et al , 2015). As there is an influence of TD of human talent on KG, knowledge-intensive companies outsource much more than other service companies, seeking to reduce costs and for strategic reasons such as the search for external knowledge (Edvardsson et al , 2021).…”

“…Likewise, it is of interest to replicate the study in other business sectors, to understand whether the amount of information handled within companies leads to obtain meaningful business results, as partially observed in the study by Edvardsson et al (2021). In addition, consider the different types of organizations according to the time in which the activities are carried out (Bueno et al , 2010).…”

Quality Management, Customer Inputs and Operational Complexity in Knowledge-Based Service Operations

“…According to Javalgi et al (2009), KBSs are services that are highly focused on human capital as inputs, that is, people skills and technological know-how. The core competency of KBS firms is the tacit knowledge of the workforce (Edvardsson et al, 2020). Also known as professional, information-based, advisory and assistance services, the KBSs provide vital services.…”

“…The distinctive characteristics of KBS operations such as high customer contact, service customization, and knowledge intensity make it difficult to control the quality of services and standardize service processes (Balthu & Clegg, 2021;Javalgi et al, 2009;Lewis & Brown, 2011;Ponsignon et al, 2011). For instance, the core capabilities of KBS operations are the tacit knowledge and expertise talents of professional employees, which may not be accessible by customers when assessing the quality of outcomes (Edvardsson et al, 2020;Jayaram & Xu, 2016). According to Sampson & Froehle (2006), a service process depends on customer inputs (CI) such as customer-self, tangible belongings, and information as preconditions for service production.…”

The Impact of Business Development, Strategic Planning, Business Outsourcing, and Organizational Change towards the Use of Technology among SME’S in Saudi Arabia

“…Researcher Definition (Edvardsson, et al, 2020) It is the procedure of managing a firm's activities by transferring some to third party providers for a better outcome. (Alkhatib, 2017) The best approach for achieving a competitive advantage in a dynamic business environment is outsourcing (Luvision & Bendixen, 2010) & (Du Preez & Bedixen, 2019 Using new technology to maximize the profit and minimize the cost.…”