Prof. Dr. Eric K. Clemons


Information, Strategy, and Economics
The Wharton School



Eric K. Clemons is a Professor of Information, Strategy, and Economics at The Wharton School.


Researchers have recently rediscovered the outsourcing of services, and have named their discovery business process outsourcing. To what extent is BPO truly a new phenomenon; to what extent is this just outsourcing, albeit of intangibles, and to what extent is it merely cross-border wage rate arbitrage? Preliminary research visits in India suggest that the range of activities is truly extraordinary, including transaction processing; securities trading portfolio design; software development, testing, and maintenance; inbound call centers for customer service and technical support; outbound call centers for cross-selling and up-selling; and applied research. However, both the skilled personnel and the cross-border labor rate differences have existed for years, and both predated the recent surge in business process outsourcing and in BPO research. We are therefore forced to look for deeper explanations for the phenomenon, why it is occurring now, the limitations to the range of activities suitable for BPO, and the source of future competition to currently dominant BPO locations in Bangalore, Hyderabad, Manila, and elsewhere. Probably the best theoretical frameworks for explaining our observations include Brickley's work in Organizational Architecture at Rochester and our own research at Wharton on the risks of sourcing and the changing boundary of the firm.


Friday, April 18, 2003
10:30 - 12:00 pm


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Streaming Video
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The strategic risk of outsourcing

Regulation and the shift from vertical integration to specialization strategies

Intricacies of the 'make-or-buy' decision


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Copyright 1999-2007 Dr. Chris Schlueter Langdon

Last modified: May 13, 2007