Invisible costs in offshoring services work

Anne Stringfellow, Mary B. Teagarden, Winter Nie

Journal of Operations Management · 2008 · Volume 26 · Issue 2

DOI: 10.1016/j.jom.2007.02.009

Abstract

Offshoring service work is an accelerating trend. While the cost-savings from offshoring service work are usually clear, operating at a distance also brings with it certain “invisible costs.” We combine existing service operations theory with insights from the literature on communications and culture to present a new conceptual framework, organized around interaction intensity and interaction distance. We identify the drivers of these costs. We conclude with recommendations for controlling or attenuating invisible costs in offshoring service work.

Keywords

Offshoring services, Invisible costs, Cost-savings

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