As information-based processes are usually independent of the location or even the processor, they
can be oftentimes either automated or relocated to foreign sites to profit from differences in wages.
Both strategies bear enormous micro-economic potential in terms of cost savings. However, with the
main focus on cost reduction, risk due to the uncertain development of effective labor costs or future
transaction volumes are oftentimes either inadequately considered or neglected. This systematically
leads to false decisions, in particular since the two strategies – relocation and automation – result in
different risk profiles. In this paper, we analyze the conditions for automating or relocating parts of
business processes and propose a decision model that suggests a risk/return efficient allocation to the
alternatives. In particular, we consider how uncertainties of effective labor costs and transaction
volumes influence the decision. As shifting tasks to other locations has effects on the workload at the
original location, we also take into account costs for social effects. The practicability of our approach
is demonstrated with an example that is based on real data of a major financial services provider.
Henneberger, Matthias; Katzmarzik, Arne; Muller, Stephan; and Pleie, Frans-Matthis, "Would i use my personal blog for commercial exchange?" (2009). ECIS 2009 Proceedings. 148.