An exploratory study of senior manager perceptions of offshoring within the financial services industry

Offshoring is a strategy that has been employed by countless firms across the many industries over the last ten years. More recently, organisations have begun to understand and realise the full impact of this approach, particularly in the financial services sector. Whilst some firms recognise the benefits of offshoring there has been a greater understanding and emphasise put on the associated downsides of offshoring under the guise of risks and hidden costs. This has resulted in a changing viewpoint in relation to offshoring with some going as far as to initiate plans to reshore functions. This study employed a qualitative method through case study research, which was conducted through semi structured interviews of six senior managers within one international firm in Dublin. The results from the study show that offshoring has been a primary cost reduction strategy, widely applied. Benefits have arisen through error reduction and process improvement as a result of this strategy. However, there has been a shift in thinking in relation to the real cost savings or lack there of such savings. Generally due to the increased oversight arising because of knowledge loss and modulisation of process. This has led to a view that firms will begin to reshore functions to reset their financial plans. These results provide up to date findings in this area of research presenting interesting avenues for future research such as, the impact of technology on offshoring arrangements and also the impact of the upcoming economic changes in Europe in addition to the ever increasing regulatory change.