ABSTRACT
Business process managers often attempt to save money by using an outside supplier to operate a business process, a concept known as outsourcing. When the supplier is located in another country, the term offshoring is applied. Outsourcing and offshoring have financial benefits but present a myriad of risks. A firm should consider the effect on all important customer dimensions of performance, and the revised process’s impact on the customer’s consumption process. The myriad of risks associated with outsourcing and offshoring can be categorized and listed. A risk management system is used to assess the levels of risk and develop plans for avoiding the risk or mitigating its effects. Lean methods can be suitable for lowering the likelihood of a risk, but risks with potential for significantly negative impacts need to be handled in other ways. When offshoring, a business process manager should pay close attention to the worker culture at the supplier location, while avoiding stereotyping. Adapting to local cultures can enhance effectiveness and avoid delays in implementing a successful offshore business process.
