University of Auckland Business School
Automating business processes or relocating the processes to low-wage countries is two frequently used measures to decrease cost. With the main focus on cost reduction, however, productivity differences between locations as well as interdependencies between automation and sourcing are often inadequately considered. In fact, automation and sourcing opportunities are usually evaluated independently of each other. This common practice can systematically lead to decisions that consume expected savings. In this paper, a decision model is proposed that is designed to simultaneously derive optimal degrees of automation and relocation for business processes.