Gaining Flexibility by Rethinking Offshore Outsourcing for Managing Complexity and Disruption

The challenges confronting management in making decisions on offshore outsourcing have inevitably changed dramatically over the last decade. Offshore outsourcing today is characterized by a higher level of complexity and disruption brought about mainly factors of change, as: (1) the new waves of globalization; (2) the rapidly shifting conditions in the marketplace, which have made offshoring a vital part of global strategies, leading the way to new business models; (3) the increasing variety of models in the global supply chain; (4) the inroads of previous providers that have emerged as world-class competitors; and (5) the irresistible march of technological disruption. Threatening events, as terrorist attacks and wars, had disrupted the world economy since the 2000s. In these cases, supply chains were disrupted although soon restored. After these critical events, globalization was severely weakened by the arrival of the COVID-19 pandemic, on the threshold of 2020, and Russia’s invasion of Ukraine dealt a blow to global supply chains, by 2022. Due to these complexities, the trend to outsource production to other countries might increasingly push companies to transform themselves into virtual organizations. Outsourcing strategies could therefore evolve moving towards a digital era.