Outsourcing Business Functions: Advantages And Disadvantages

Project Objective

Discuss about the Outsourcing Business Functions.

Outsourcing is a business strategy which moves some of the functions of the organisation, activities as well as decision responsibilities within an organisation to the providers outside. This is done by means of negotiating contractual agreements with a specific vendor. This vendor is entrusted with the responsibility of production procedure, people management, quality, customer service and key asset management of the particular functions. It is stated that the procedure greatly reduces overhead costs of a specific organisation. The procedure of outsourcing allows organisations to focus on the core business and they are capable of creating a competitive advantage by the reduction of overall operational costs. Companies utilize the process of outsourcing in order to reduce costs and improve the customer service and overall quality. Different industries outsource different aspects of their business.

The main objective of the specific report is to evaluate the overall advantages and disadvantages of the outsourcing of the business functions. There needs to be the identification of different areas which can be improved. In case the disadvantages are also identified it is possible for the people to understand the negative impacts of the outsourcing procedure.

There is a considerably good scope for conduction of the project because a large number of benefits as well as drawbacks are existent in the outsourcing of the business functions. It is possible for the business functions to manage the business operations and the procedures with the involvement of a third party service provider. It has been reported that there are more expert opinions which are possible to be collected and performance is also substantially improved with the help of experts in different fields. The work and different things which are to be suitably done are seen to get done faster and in a much shorter span of time in case the tasks entrusted with the company are passed on to external experts and companies. In case processes are outsourced the company is capable of focussing on the things which actually matter. It is also possible to benefit from the enhanced ability of planning and the mitigation of several potential risks.

The scope of the overall project and its development is immense as there are several positive benefits of a particular company in outsourcing the different functions. The services which are offered by the business organisations is easy to manage and handle. The services which are offered through the business functions help in the overall increase in the flexibility of the organization and there is the transformation of the possible fixed sots into the variable costs.

Project Scope

Another noteworthy aspect which is to be kept in mind is that the company can focus on the core competencies of a particular organisation which helps in the development of positive relationships with customers. There is also the maintenance of product leadership and overall operational excellence for gaining competitive advantage in the business.

Research has revealed that the outsourcing of business functions is done basically for the purpose of labour management and improvement of overall management and allocation of resources for the suitable manufacturing and procedures of production. Research shows that the business organisations basically outsource the functions of the business because there is the need to control the operational costs and improvement of the focus of the company on the best class facilities and management of the internal resources of the company (Butler and Callahan 2014).

There is considerable reduction of costs in the work scenario and people can save cost and money as the cost of hiring permanent staff for certain operational functions is reduced. There is also the possibility of working all round the clock and this helps in managing the hurdles which are faced due to the change in the specific time zones. In case the outsourcing of work is done by means of a wide range of online services there is the provision of dynamic and intuitive platforms which help in the effective management of the things which are being done and managed. Since the procedure of work is tough and takes a toll on the relationships which need to be forged by the employees, there arises a need to simplify the relationships at work. This helps in the overall development and balance of the work relationships which are crucial in any particular scenario (Liu and Wang 2014).

The procedure of outsourcing also helps in the proper targeting of efforts which is not possible otherwise. There can be certain areas which need to be targeted and this gives a proper chance to the business to take up newer and better risks and experiment with suitable exposure.

The literature review of the research which exists pertaining to the topic of outsourcing of business operations by companies gives a noteworthy idea as to the different facilities it provides to the companies. However there is the need for first hand understanding or experienced feedback as well from the managers to understand the real scenario at work. The downsides also need to be understood with respect to the risks of security, the standards of quality control which are the branding of a specific organisation, the hidden costs which are often overlooked. For this there needs to be further research and understanding to be conducted in such fields.

Literature Review

The main research question which needs to be analysed in this particular study is that, what is the impact of business functions outsourcing on an organisation.

The secondary questions are linked to the primary questions:

Does the procedure of outsourcing cause security risk?

Does the loss of control of the company in outsourcing affect its reputation?

Does the risk of public backlash burden the existent operations of the company?

Do things which are essential for company projects get lost in translation?

Research Design:

Research design is nothing but a framework or a suitable plan which helps in the overall understanding and in the outlining of the trajectory of a particular path of work. The different factors which need to be verified with regard to the topic are to be analysed. Research design can be of different types which help in framing the methodology of the research. The explanatory design of research helps in the identification of different types of incidents and their occurrences. The exploratory research design is the in depth understanding of the events which are occurring which respect to a particular scenario. The descriptive research is concerned with the detailed understanding and the enhancement of knowledge and depending on the type and nature of a specific study (Lewis 2015).

This particular research type is descriptive in nature. The overall understanding of the business operations is necessary to formulate an in depth research on the topic specified.

Research Type:

The research type which is employed in this specific survey is descriptive. It is a study which is used widely in majority of disciplines. The descriptive research method helps in the procedure of research by means of questionnaires and other survey processes. This type of research helps in highlighting the issues at present, which helps in the description of the situation better and this is not possible by the employing of a specific method of survey.

Research Approach:

There are three major types of research approaches which helps in the understanding regarding the way in which a particular problem can be tackled. In case of deductive approach there is the formulation of a set of specific hypothesis pertaining to the topic and based on the results the hypotheses are to be either accepted or rejected. In case of the inductive research approach there is no formulation of hypothesis of any sort. In case of abductive approach of research the procedure is basically designated to help in the understanding of the observations mentioned at the beginning of the research.

Gaps in Literature

This particular research is deductive by nature as the research questions help in the formulation of the hypothesis which are to be accepted or rejected based on what the hypothesis states.

Sample Techniques:

There are different techniques of sampling which include that of non-probability sampling, simple random sampling, systematic sampling, stratified sampling, cluster sampling, quota sampling and mini-max sampling among other types In this particular research on the outsourcing of the business operations the type of the sampling method which is to be employed is that of simple random sampling (Myers, Well and Lorch Jr. 2013).

Sample Size:

The study population is actually the population on which the researcher needs to target and which the research study needs to be based on ideally. There needs to be an understanding of the study population in order to ensure that the requirements of the findings of the study are being met. In this case the study population comprise of all companies which engage in the outsourcing of their business operations. These companies are the focus which needs to be studied.

The sample population in the survey is basically the part or a specific proportion which is selected to be studied. This is basically a proportion of about 10% of the total study population. It needs to be ensured however that the sample population is a proper representative of the sample population (Savin-Baden and Major 2013).

Primary Data Collection:

It is possible to collect primary data from the respondents by means of a questionnaire. Interviews can also be conducted by means of arranging for the managers to be interviewed. In this research the managers of the companies which engage in business outsourcing are to be selected. The company managers are to be selected  as they are capable of providing information on the outsourcing functions and their benefits as well as disadvantages (Sultan and Yin Wong 2013).

Reliability and Validity of Data:

An important criteria of a research study is in the maintenance of the overall authenticity of the data which are being collected and also to ensure that the data which are being collected is genuine. Tests for validity can be conducted in order to ensure that the authenticity of the data has been ensured and the results which are being produced related to the research can be relied on.

Qualitative Data:

In order to understand the types of problems which can crop up in case of the business outsourcing or in case of the functions which the companies need the people to perform a qualitative method of collection of data can be employed for the same. This helps in the overall analysis of the different types of reactions and also the responses that have been obtained in connection to the survey (Maxwell 2012).

Research Questions

There are certain limitations of both quantitative and qualitative research. There can be ambiguity in the nature of the responses as well as the problems which are highlighted by the managers. In order to maintain a certain amount of privacy of the company, it is possible for the managers of the chosen organisations to give false and invalid information or reasons which is unacceptable. The mindsets of the respondents also cannot be judged.

Main Activities	1ST Week	2nd week	3rd  week	4th and 5th week	6th and 7th week
Selection of topic
Project objective and scope
Literature review
Research methodology
Data Analysis and interpretation
Results and discussion
Conclusion

Conclusion:

It can be stated that the procedure of business outsourcing is actually a business strategy which is utilized by the companies for the reasons which include the lack of proper expertise, subcontracting of business functions to outside organisations. Outsourcing is also used for cash infusion, reduction of risk, reduction of operating cost among other noteworthy features. There can be both advantages as well as disadvantages of business functions outsourcing. There are companies which follow such practices while other companies prefer to perform all their work themselves as there can be a deception in the price levels. The compromise of customer data and vendor reliability are some of the major ethical concerns which are to be faced by the companies specifically in offshore outsourcing contracts. Outsourcing cannot be the right tool for every job but if used properly it is a good tool for the right job. There are also clear sins focussing on the adoption of this strategy in majority of companies over an ever increasing range of business procedures and functions.

References

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