The Effects of Trust on the Intention of Adopting Business Process Outsourcing: An Empirical Study

With the increase of the global competition and the reduced life cycle of business process, most companies are facing a crucial and strategic decision making whether to adopt BPO and how to diffuse it in order to concentrate on their core capabilities by outsourcing the whole or part of their business processes to external service providers. In spite of its strategic importance, there have been few empirical studies on the intention of adopting BPO. This study is to examine the effects of perceived benefit and perceived risk, mediated by trust, on the intention of adopting BPO. A thorough examination of mediating effect of trust on the intention of adopting BPO is highlighted in this study. A survey was conducted with the business process outsourcing companies to empirically test the variables described herein. The results show that adopting BPO is affected by trust which in turn is influenced by perceived risk and perceived benefit. Implications of these findings are discussed for researchers and practitioners.