Opening the Black Box of Outsourcing Knowledge Intensive Business Processes – A Longitudinal Case Study of Outsourcing Recruiting Activities Sven Laumer University of Bamberg sven.laumer@uni-bamberg.de Nadine Blinn Hamburg University nadine.blinn@wiso.uni-hamburg.de Andreas Eckhardt Goethe-University Frankfurt eckhardt@wiwi.uni-frankfurt.de Abstract Knowledge intensive business services (KIBS) play an increasing role in business and economics as they serve as service providers for organizations outsourcing their knowledge intensive business processes (KIBP). Our literature analysis shows that KIBP as outsourcing objects remain considered as “black boxes”. Based on the assumptions of the Resource Based View of the Firm, we shed light into the black box. Within a longitudinal case study, we present the motivation of a company outsourcing its recruitment activities since 2003 and the lessons learnt derived from the project during the last eight years opening the black box of outsourcing KIBP. Human Resources (HR) belongs to the back office function of organizations and recruitment in particular is considered to be a KIBP. The results of the case study indicate that business process standardization, identifying knowledge intensive sub- processes that provide value to the process outcomes and defining explicit service levels are key success factors for KIBP outsourcing. In addition, the results show that outsourcing KIBP can be beneficial for organizations and can results in better process determinants in terms of cost, time and quality. 1. Introduction Knowledge intensive business services (KIBS) are increasingly important contributors to economic performance [25]. KIBS serve as service providers for knowledge intensive business processes (KIBP). The growing importance of KIBS is associated with internationalization of services, growth in demand for certain forms of knowledge, and outsourcing [25]. KIBP, who deal with highly specialized knowledge, inherent two characteristics that represent challenges for outsourcing: Intangibility and interaction [19; 27]. As a consequence, KIBP outsourcing is different from other types of business processes outsourcing. Hence the specialty and reason for outsourcing KIBP to KIBS are challenging both organizations and service providers [25]. These challenges and specific characteristics of KIBP in relation to outsourcing have not yet been addressed intensively, whereas most of the research studies treat KIBP as black boxes while discussing KIBS extensively [28]. Hence, profound generic recommendations concerning successful KIBP outsourcing have not been developed and are demanded by several researchers [5; 21]. This lack of a KIBP specific outsourcing model can be a barrier for some enterprises as they relinquish outsourcing activities [25]. In order to solve this challenge, we analyze and discuss KIBP outsourcing based on a longitudinal case study and focus on the dimension and characteristics of the processes. As spatial or innovation dimensions have been widely analyzed by scholars and as highlighted by Muller and Doloreux [28] in their discussion of KIBP outsourcing, the process view of KIBP is not discussed by prior research [28]. When reviewing the KIBP/KIBS outsourcing literature, it becomes evident that KIBP as outsourcing objects often remain considered as “black boxes” [28]. We start to open the black box within this paper by focusing on the following main characters of KIBS [26] which distinguish them from other processes: • KIBS rely heavily upon professional knowledge • KIBS either are themselves primary sources of information and knowledge or they use knowledge to produce intermediate services for their clients’ production processes • KIBS are of competitive importance and supplied primarily to business We analyze the black box by underlying our research with the theory of the Resource Based View of the Firm (RBV). The RBV has been used within IS research to investigate outsourcing in general and outsourcing decisions in particular [14]. The RBV and the proposed attributed of valuable organizational resources [3] will be applied to the 2012 45th Hawaii International Conference on System Sciences 978-0-7695-4525-7/12 $26.00 © 2012 IEEE DOI 10.1109/HICSS.2012.459 3768 2012 45th Hawaii International Conference on System Sciences 978-0-7695-4525-7/12 $26.00 © 2012 IEEE DOI 10.1109/HICSS.2012.459 3827