Implications of business process outsourcing on organizations

Business process outsourcing is an established method with which today all sizes of companies attempt to decrease operating expenses by moving internal business processes to external service providers. With such a strategic decision companies react to an increased market pressure to remain their competitive advantage. There is an abundance of published information about outsourcing benefits, risks, motivations and challenges that help managers during the decision-making process. Nevertheless many companies fail to realize estimated savings. One rationale could be that most BPO business cases neglect to consider so-called social costs which are still rarely explored, although they may can have a significant impact. Such rather social implications of business process outsourcing on organizations, like individuals get a feeling of job insecurity, resist to change or simply are incapable to adapt to a changed organizational structure, may lead to a decreased performance which results in higher operating expenses than perhaps originally estimated.