Impact of Internet-Based Distributed Monitoring Systems on Offshore Sourcing of Services

摘要

The use of Internet-based distributed monitoring systems has allowed firms to source services globally that were hitherto thought of as being too risky or complex to execute offshore. These systems enable buyers of such services (clients) to monitor the execution of processes in real-time and exert a degree of managerial control over information workers of another firm located in a distant region. Our research shows that process codifiability plays a key role in determining output quality. Further, we show that the efforts made by the client and the provider in monitoring work via Internet-based monitoring mechanisms have a significant impact on output quality. Finally, we show that these monitoring mechanisms enable clients and providers of services to focus on those processes that are best managed by each entity. This scheme of optimal allocation of monitoring effort is termed by us as the efficient monitoring frontier.