Factors influencing the outsourcing decisions: a study of the banking sector in India

Abstract

Purpose – This paper is an empirical study of outsourcing practices in the banking sector in India. The purpose of the paper is to investigate the impact of factors which influence the decision makers' attitude towards outsourcing.Design/methodology/approach – Based on a review of the existing literature, an attitudinal model of outsourcing was developed. This model was used to: identify the key factors of benefits, risks, roadblocks, and criticality of outsourcing; develop the instrument to measure the factors; and formulate hypotheses concerning the impact of these factors. The constructs in the instrument that measured these factors were validated by factor analysis.Findings – The impacts of perceived benefits, perceived roadblocks, and perceived criticality on the attitudes towards outsourcing were found to be strong and statistically significant. The impact of perceived risk was weak and statistically insignificant. The model explaining the combined impact of these four factors on outsourcing attitud...