Outsourcing business process refers to the practice of subcontracting some parts of business process of an organization to third party service provider. Outsourcing is performed for freeing up some valuable time and resources towards concentrating on core business activities (Butler and Callahan 2014). The most frequent outsourcing business responsibilities are like payroll, human resources, accounting, customer service, information technology and lots more. Over the few decades, various reputed business organizations have adopted the practice of outsourcing business functions instead for making partnership with other companies and sharing profits with them. Outsourcing business process actually enhances the quality of the products and services with the specialized equipment and talents of outsourcing companies. However, the parent companies can have lack of direct managerial control on the outsourcing companies, which can often hamper the standard of the products and services.
This research proposal will focus on both the advantage and disadvantage of outsourcing business functions on business performance. In order to conduct the research study specifically, the research study will select NAB (National Australia Bank) for gathering specific information about the research topic. The research proposal will frame effective research question and apply appropriate research methodology for collecting effective research information.
Outsourcing business process facilitates in reducing the organizational cost through outsourcing business activities in the countries having low wage rate of employees. It can also enhance the quality of the organizational project through specific talent and equipment of the outsourcing organizations. However, over the few years, NAB is facing the issues with the security level and managerial control in the business process outsourcing (BPO) (Runar Edvardsson and Durst 2014).
This research proposal will measure the advantage of outsourcing business functionalities on organizational growth. The proposal will also examine the limitations of business process outsourcing on the performance level of the organizations. Apart from that, the research proposal will provide the best way for performing outsourcing business functions.
The BPO trend in Australia is expected to grow over next 5 years, as the organizations are inclined towards offshore locations for seeking new business opportunities. According to Han and Mithas (2013), the business process outsourcing functions of Australia organizations have been estimated for an amount of $4.6-Billion. With the proliferation of automation in information technology, BPO has become a growing trend in Australia. Most of the Australian organizations are more likely to outsource their business function in India and China for taking the advantage of flexible labour market and low cost production.
Outsourcing Business Function seems to have most obvious benefits on business performance in terms of cost advantage. Teo and Bhattacherjee (2014) pointed out that organizations can effectively outsource their business functions to such countries, where the wage rate of the employees is less. It can actually save the overall organizational cost. On the other hand, Lu, Meng and Goh (2014) opined that organizations can outsource their business responsibilities to such vendors, who are actually specialized and expert in the specific fields. Therefore, the parent organizations can have wide access to skill labor for their specific projects. On the other hand, outsourcing vendors are best equipped with expert knowledge and equipments, which enhance the quality of projects. Furthermore, outsourcing vendors often share the risk of failed projects, which can minimize the impact of loss on the parent organizations.
Johnson, Wilding and Robson (2014) pointed out that BPO allows an organization towards freeing up some valuable time and resources for concentrating on their core business values. In this way, the parent organizations can better develop innovation in their business through concentrating on their research and development areas. Apart from that, outsourcing business functions can also provide the advantage of different time horizon in offshore outsourcing, where the parent organizations can get delivery of their projects quite before the deadline without any delay.
In outsourcing process, managerial control of the business activities mostly belongs to the outsourcing companies. Hence, the parent organizations face lack of managerial control over the outsourced business functions. In such situation, the outsourcing companies are not driven by the same standard of parent companies, which can lead to deviation of standard of the project from the actually set standard of the parent companies. Marshall et al. (2015) opined that BPO has some legal procedures associated with it, which can enhance the overall cost of the organization. Apart from that, there are also some hidden costs in BPO process.
The outsourcing companies demand additional change in case of any changes in the project requirement, which leads to additional organizational cost. Furthermore, Gerbl et al. (2015) pointed out that outsourcing business functionalities have also security risks, which can hamper the business performance of the parent organizations. Moreover, the parent organizations often need to share vital information with the outsourcing companies. In such situation, the parent companies can face the security risks, if the outsourcing companies misuse that information.
Outsourcing business functions can really be helpful for enhancing business performance, if it is handled properly. The parent organizations should properly select the outsourcing vendors based on the specific business requirement for avoiding any risks. Apart from that, the parent organizations should ensure that outsourcing organizations have proper understanding of the business objectives (Chou, Techatassanasoontorn and Hung 2015). It will ensure that the outsourcing companies will prepare the project as per the standards of the parent organizations. Furthermore, the parent organizations should frequently communicate with the outsourcing companies for tracking their performance level.
The literature review of this research study can have lack of authenticity, as there is limited access to huge secondary sources. However, such gaps can be effectively bridged through adequate access to secondary sources.
H0: NAB can have great advantage through business process outsourcing
H1: NAB can have great advantage through business process outsourcing
This research question will present most important information about the research topic. This research question will primarily focus on the main benefits and challenges of outsourcing business functions.
This research question will majorly focus on the impact of business process outsourcing on the business process NAB. Moreover, this research question will evaluate the profit and loss associated with the outsourcing business functions on the business performance of NAB.
Evaluation of this research question will actually mitigate the issues of the research study. Moreover, this research study will provide best ways of handling BPO.
(Source: Tuohy et al. 2013)
Validation is the process, which examines the accuracy level of the data collected from the respondents. The validation process encompasses complete experimental concept and compare the research outcome with the standard requirement of the scientific method of research (Roberts 2013). Statistical method will be used in this research study for assessing the validity of the collected qualitative data. On the other hand, reliability measures the consistency of the collected data collected from the respondent. Moreover, reliability actually measures the repeatability of the research outcome. This research study will use “Inter method reliability approach” for assessing the reliability of the collected data.
Method of data collection is considered to be the most significant activity in any research study. It can provide most significant and relevant information regarding the topic of the research. In this research, interview session will be chosen for collecting effective qualitative data regarding the research topic. Moreover, the managers of NAB will be interviewed effectively for gathering authentic research information about their business process outsourcing.
In order to conduct qualitative research, this research study will select 3 managers of NAB. The core organizational specific information gathered from managers will enhance the quality of the research outcome. Furthermore, simple random sampling method will be selected for gathering the respondents at their preferred location.
Research instrument is an extremely important component, which collects useful and authentic information about the topic of the research (Tuohy et al. 2013). In this research stud, survey method will be chosen for collecting accurate quantitative information about the research topic. In survey method, effective set of survey questionnaires will be frames and these questionnaires will be shared out with the selected respondents of the research study. In case of this research, the research questionnaires will be circulated among the employees of NAB.
Moreover, these employees will be allowed to respond to these questionnaires completely from their own views.
In case of survey method, 50 employees from NAB will be chosen for collecting information about the advantages and disadvantages about the BPO on the business process. The respondents will be assembled through simple random sampling method, which collect the respondents at their desired location.
Data analysis is the most significant method for assessing the accurate value and meaning of the collected data (Choy 2014). Therefore, it facilitates in enhancing the quality of the research outcome. Statistical method will be applies for analyzing the quantitative data. In this statistical method, the measures like mean, median, mode and standard deviation will be applied for assessing the accurate meaning of the collected data. In this way, the extraction of right meaning and evaluating of those meanings of the collected data will improve the value of the research outcome.
Closed ended questions will be used for the questionnaires used in the survey method. On the other hand, open ended questions will be used for conducting interview session, which will be detailed information concerning the research topic.
Statistical measures will be applied for evaluating the validity of the collected data. On the other hand, Inter method reliability approach will be applied for measuring the consistency of the collected data.
Any limitation in the research study can have huge impact on the outcome of the research study. Due to time limitation, it may not be possible to access more numbers of respondents for collecting huge information. It can actually hamper the quality of the research outcome. On the other hand, it may not also possible to access wide secondary sources due to budget limitation, which can also have major impact on research outcome.
Conclusion
In conclusion, it can be said that outsourcing business responsibilities can have both optimistic and pessimistic impact on the business performance of an organization. From the secondary sources of the literature review, it can be known than BPO actually minimizes overall organizational cost and improve the quality of the projects with expert knowledge. However, lack of direct managerial control can sometimes hamper the project quality. Hence, it is expected the outsourcing business functionalities will have both positive as well as negative impact on the performance level of business on NAB.
Reference List
Butler, M.G. and Callahan, C.M., 2014. Human resource outsourcing: Market and operating performance effects of administrative HR functions. Journal of Business Research, 67(2), pp.218-224.
Chou, S.W., Techatassanasoontorn, A.A. and Hung, I.H., 2015. Understanding commitment in business process outsourcing relationships. Information & Management, 52(1), pp.30-43.
Choy, L.T., 2014. The strengths and weaknesses of research methodology: Comparison and complimentary between qualitative and quantitative approaches. IOSR Journal of Humanities and Social Science, 19(4), pp.99-104.
Gerbl, M., McIvor, R., Loane, S. and Humphreys, P., 2015. A multi-theory approach to understanding the business process outsourcing decision. Journal of World Business, 50(3), pp.505-518.
Han, K. and Mithas, S., 2013. Information technology outsourcing and non-IT operating costs: An empirical investigation. Mis Quarterly, 37(1).
Johnson, G., Wilding, P. and Robson, A., 2014. Can outsourcing recruitment deliver satisfaction? A hiring manager perspective. Personnel review, 43(2), pp.303-326.
Lu, Q., Meng, F. and Goh, M., 2014. Choice of supply chain governance: Self-managing or outsourcing?. International journal of production economics, 154, pp.32-38.
Marshall, D., Ambrose, E., McIvor, R. and Lamming, R., 2015. Self-interest or the greater good: How political and rational dynamics influence the outsourcing process. International Journal of Operations & Production Management, 35(4), pp.547-576.
Roberts, T., 2013. Understanding the research methodology of interpretative phenomenological analysis. British Journal of Midwifery, 21(3).
Runar Edvardsson, I. and Durst, S., 2014. Outsourcing of knowledge processes: a literature review. Journal of Knowledge Management, 18(4), pp.795-811.
Solli-Sæther, H. and Gottschalk, P., 2015. Stages-of-growth in outsourcing, offshoring and backsourcing: back to the future?. Journal of Computer Information Systems, 55(2), pp.88-94.
Teo, T.S. and Bhattacherjee, A., 2014. Knowledge transfer and utilization in IT outsourcing partnerships: A preliminary model of antecedents and outcomes. Information & Management, 51(2), pp.177-186.
Tuohy, D., Cooney, A., Dowling, M., Murphy, K. and Sixsmith, J., 2013. An overview of interpretive phenomenology as a research methodology. Nurse Researcher, 20(6), pp.17-20.
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