Benefits And Drawbacks Of Outsourcing On Organizational Performance

Advantages of Using Outsourcing

Questions:

What Are The Benefits And Drawbacks Of Outsourcing On The Performance Of The Organization?

What Is The Consequence Of Outsourcing On The Performance Of The Business?

What Are The Advantages Of Using Outsourcing?

What Are The Disadvantages Of Using Outsourcing?

What Is The Importance Of Strategies Developed For Outsourcing The Business Operation?

What Is The Impact Of Outsourcing On The Turnover Of The Enterprise?

How The Risks Associated With The Business Processes Can Be Reduced?

Do Outsourcing Plays Any Role In Reducing Risks Of The Project?

What Are The Limitations Of The Outsourcing Associated With The Business Operation?

The outsourcing of the business process is the fundamental phenomenon for involving the association of the third to complete the project activities. The trend of carrying over the business activities is changing towards the process of outsourcing with the aim of reducing cost incurred on the processes. The reorganization of the expertize staff help in completing the activities with efficiency which results in providing good quality product at the end. The globalization is the major factor for the involvement of open market strategies in completing the business operation (Sarifuzzaman, 2011). The long term growth of the organization can be improved with the effective selection of outsourcing partners. The improved quality of the product helps in reducing risks associated with the customer satisfaction. The project activities and processes can be completed with reduced cost and within the mentioned baseline with the outsourcing of business operation to the third party. In this paper, we are looking forward to plan a research methodology to determine the advantages and disadvantages of outsourcing with regards to business efficiency.

The objective of the research is to reduced cost and improved performance of the project with the inclusion of outsourcing fundamental. The aim of this research is to analyse the impact of outsourcing in carrying over business operations. It also focuses on looking into the benefits and drawbacks of outsourcing which plays a vital role in improving the turnover of the organization.

The scope of the project is to clearly define

• The consequence of outsourcing on the performance of the business.
• Importance of strategies developed for outsourcing the business operation
• Impact of outsourcing on the turnover of the enterprise
• Impact of outsourcing on the customer satisfaction and their perspective view.
• Limitation of the outsourcing associated with the business operation.
• Identifies how the in-house capabilities of the enterprise can be improved

The core functions of the enterprise are provided to the third party to give outsourcing services in completing the business operations (Ray, 2009). The experts opinion is that the performance of the business can be improved with the use of outsourcing process because it helps in adding values to the business activities. The competitive advantage can be gained by utilizing the fundamental tools of outsourcing. The activities of the organization are improved in every sector of the business by using the process of outsourcing like human resource, finance and accounting, IT, and others. The flexibility in the process helps in improving the quality of work done for completing the business operations (Mirza, 2015). The resources of the organization can be efficiently utilized for reducing the cost incurred on the project completion. The globalization is the major factor for the involvement of open market strategies in completing the business operation. The long term growth of the organization can be improved with the effective selection of outsourcing partners. The in-house capabilities of the organization can be improved with the reduction in the cost associated with the completion of the processes (Patricia, 2014). The human resource skills can be improved with the inclusion of training and development program to prepared them according to the requirement of the global market. The marketing strategies of the enterprise can be improved which results into the increasing sale of the product by attracting new customers towards the organization. The high quality services can be provided to the customers by providing business operations to be performed by the third party (Garg, 2016). It has been analysed that in spite of several advantages there are some negative aspect too such as confidentiality of the information is kept at high risks due to the interference of the third party in completing the business operations. The capability of sustaining quality of the product can be improved. The data leakages can be the result of outsourcing. It helps in providing new opportunities to the utilization of the resources in the effective manner.

Disadvantages of Using Outsourcing

The literature review helps in analysing the use of outsourcing in the financial sector. It helps in the development of cost saving program for the organization. The core skills of the employees can be sharpening according to the business requirement. The stability can be attained in the liquidity state of the enterprise (Krell, 2014). The capability of the information technology and system can be improved. We have determined that the productivity of the enterprise can be improved with the effective utilization of the outsourcing program. It helps in providing flexibility to the business processes which are being undertaken by the organization. The major disadvantage of the outsourcing is that the skills, knowledge, experience of the working employees are not fully utilized to present new ideas and innovative technique to enhance the operational performance of the enterprise. It is difficult to analyse best outsourcing company for increasing the efficiency of the enterprise.

The various approaches are used for determining the advantages and disadvantages of the outsourcing technology. The competitive advantage can be gained with the strategic implementation of the outsourcing activities (Millan, 2010). The efficient use of intellectual properties helps in improving the turnover of the enterprise. The following hypothesis is identified with the analysis of the literature review:

1. The core skills of the employees can be effectively improved
2. The strategic evaluation helps in identifying the satisfaction level of the customers and the working employees with the inclusion of outsourcing program
3. Identifying the views and opinions of the working employees on the negative and positive aspect of the outsourcing terminology.
4. Helps in identifying the profit generated by the outsourcing program

The following framework is identified with the analysis of the research hypothesis:

The research design is prepared for collecting data related with the research questions prepared to take over the research study on identifying the advantages and disadvantages of the outsourcing program (Kremic, 2013). The research design helps in developing the strategies for the research study to take the research in right direction which helps in identifying the expected outcome of the research study program. Qualitative and quantitative research methodologies will be scheduled for collecting relevant and accurate data required for the research to know the real outcome of outsourcing the business operation with regards to the impact on company’s performance. The following diagram shows the research design overview:

The following methods are used for collecting information related to the impact of outsourcing on the effective working of the enterprise:

• Observation method: The observation of the different organization which has undertaken outsourcing under their working curriculum helps in analysing the facts and figures to determine the positive and the negative aspect of outsourcing. We have analysed that the outsourcing is the cost effective program which helps in completing the project within time and budget but the major disadvantage of the outsourcing program is that the knowledge and the experience of the working employees of the organization is not utilized to its full extent. No new innovation comes under curriculum of the business activities.
• In-depth interview approach: It is peer to peer organization of the interview with the top executives of the enterprise to analyse the impact of outsourcing on the working structure of the business (Haveckin, 2012).
• Questionnaire: The questions are prepared for collecting the answers from large population sample at a time. The structured format should be prepared for the documentation of the views and opinion of the participating units. The experience of the working employees in the environment of outsourcing program helps in providing clear details about the benefits and drawbacks of the outsourcing methodology. The open ended questionnaire is taken under consideration for recognizing the respondent behaviour of the working employees.
• Ethical consideration: The ethical laws and policies should be used for conducting a good research strategy for knowing the real situation of the outsourcing in the global market. It helps in identifying the need of outsourcing with the innovation and growth of the digital world (Iqbal, 2014).
• Text based analysis: This methodology helps in analysing the previous research work to find the relevant facts and figure associated with the outsourcing program.

• Sampling method: This method is used for performing descripting statistical approach on the small sample of the population. It helps in carrying over outsourcing activities for the small period of time to analyse the positive and negative aspect of the outsourcing program (Tucker, 2011).
• Statistical Testing: The statistical testing is performed on the data collected in relation with the efficiency of the outsource program on the other organization which are working on the tactics of outsourcing.

The limitation of the research depends on the formulation of scope required for carrying out research activity program. The efficient communication techniques are not used while conducting interviews with the high officials and top executives of the enterprise. The data collected is not well documented in the structured format (Hila, 2013). The research activities are not completed within the scheduled time of the project.

Research Activity Program	Starting date of the research	Finishing date of the research	Explanation
Selection of the research topic	28-Sep-17	29-Sep-17	The topic selected for carrying over the research is “Advantages and disadvantages of outsourcing the business functions”
Team members selection process	29-Sep-17	01-Oct-17	The analysis of the skills and expertise helps in selecting the team members and provided them their responsibilities to carry over the research study
Collection of data for literature review	02-Oct-17	04-Oct-17	The multiple sources can be used for gathering details required to complete the literature review.
Process of literature review	05-Oct-17	07-Oct-17	The information should be written in the well-structured format which is collected from reviewing the literature review. It helps in understanding the research questions designed for the research study
Development program of the research question	08-Oct-17	10-Oct-17	The primary and secondary research questions should be designed for undertaking the research in the right direction
Preparation of the draft according to the research topic	11-Oct-17	20-Oct-17	It helps in specifying the research objective and scope of the research and what will be the possible outcome of the research study on outsourcing of the business operation
Methodologies used for carrying out research	21-Oct-17	15-Nov-17	Qualitative and quantitative research methodologies will be scheduled for collecting relevant and accurate data required for the research to know the real outcome of outsourcing the business operation with regards to the impact on company’s performance
Reviewing of the research proposal	16-Nov-17	23-Nov-17	The researcher should approved the draft to carry over further research in determining the advantages and disadvantages of outsourcing the business operations to the third party
Research proposal approval	24-Nov-17	25-Nov-17	Researcher signed for approving the draft
Analysis phase of the research	26-Nov-17	31-Dec-17	The data should be analysed which is collected from multiple sources and research methodologies
Evaluation phase	01-Jan-18	10-Jan-18	The analysis and the findings of the research helps in gaining expected outcome of the research
Closure of the research study	11-Jan-18	20-Jan-18	Completion of research on the topic “Advantages and disadvantages of outsourcing the business functions to the third party”

Conclusion

In this paper, we have focused on looking into the benefits and drawbacks of outsourcing which plays a vital role in improving the turnover of the organization. The implementation of the research methodology helps in identifying positive and negative aspect of the outsourcing policies. The high quality services can be provided to the customers by providing business operations to be performed by the third party. Data leakages and loss of confidentiality is the major disadvantage associated with the inclusion of third party to complete the business activities.

References

Garg, J. (2016). The changing trends of outsourcing business operation to India. 1st ed. [ebook]. https://www.rigelnetworks.com/changing-trends-outsourcing-business-operations-india/ [Accessed 26 Sep. 2017].

Haveckin, B. (2012). Information technology outsourcing by large organization. 1st ed. [ebook]. https://vuir.vu.edu.au/19401/1/Brian_Haveckin.pdf [Accessed 26 Sep. 2017].

Hila, C. (2014). Outsourcing within the supply chain management framework. 1st ed. [ebook]. https://conferinta.management.ase.ro/archives/2014/pdf/31.pdf [Accessed 26 Sep. 2017].

Iqbal, J. (2013). Outsourcing: A review of trends, winners, and loser and future direction. 1st ed. [ebook]. https://ijbssnet.com/journals/Vol_4_No_8_Special_Issue_July_2013/9.pdf [Accessed 26 Sep. 2017].

Krell, E. (2014). Outsourcing the finance and accounting function. 1st ed. [ebook]. https://www.cimaglobal.com/Documents/ImportedDocuments/tech_mag_outsourcing_the_finance_and_accounting_functions_oct07.pdf.pdf [Accessed 26 Sep. 2017].

Kremic, T. (2013). Outsourcing decision support: A survey of benefits, risks, and decision factor. 1st ed. [ebook]. https://ankara.lti.cs.cmu.edu/11780/sites/default/files/Outsourcing-Survey.pdf [Accessed 26 Sep. 2017].

Millan, M. (2010). The benefits and risks of outsourcing. 1st ed. [ebook]. https://www.lexology.com/library/detail.aspx?g=e698d613-af77-4e34-b84e-940e14e94ce4 [Accessed 26 Sep. 2017].

Mirza, A. (2015). The impact of outsourcing on the organization and economy. 1st ed. [ebook]. https://www.diva-portal.org/smash/get/diva2:831505/FULLTEXT01.pdf [Accessed 26 Sep. 2017].

Patricia, P. (2014). Advantages and disadvantages of outsourcing. 1st ed. [ebook]. https://smartchurchmanagement.com/advantages-and-disadvantages-of-outsourcing/ [Accessed 26 Sep. 2017].

Ray, G. (2009). Finance and accounting outsourcing: An empirical study of service providers. 1st ed. [ebook]. [Accessed 26 Sep. 2017].

Sarifuzzaman, M. (2011). The impact of outsourcing on the company performance. 1st ed. [ebook]. https://dspace.bracu.ac.bd/bitstream/handle/10361/2993/12282018.pdf?sequence=1 [Accessed 26 Sep. 2017].

Tucker, J. (2011). The pros and cons of outsourcing. 1st ed. [ebook]. https://www.journalofaccountancy.com/issues/1998/jun/antonuci.html [Accessed 26 Sep. 2017]