The effectiveness and cost reduction has led to most of the companies to be experienced and specialised in various specified areas. This has paved way for the companies to move forward in the process of outsourcing. Conventionally, outsourcing has been undertaken generally for the peripheral operations that are inclusive of catering, cleaning and security related activities (Rhodes et al. 2016). However, in the current time period, it is primarily concentrating on more complex activities of the businesses that are inclusive of the manufacture, design, distribution, marketing and information systems.
The countries that are based mainly in Europe and US, outsourcing has significant part to play in the organizational strategy. Actually, there has been evidence of the fact that outsourcing with a definite strategy will develop the overall business strategy for a firm.
Mani and Barua (2015) cited that outsourcing has been looked upon to the most effective way to mitigate cost and enhance the performance of the companies. For example, Zailani et al. (2017) cited that the specialist in relation to the supply market can develop the usefulness of their employees by giving training in relation to the software system and even offering much higher salaries in order to attract more trained personnel in all the companies rather than very few integrated companies. Furthermore, Muhammad et al. (2015) highlighted that the vast development in the supply market has even triggered the process of outsourcing for the services and the products across various industries that includes computer assembly, airline, automotive, financial services and entertainment.
Telecommunication industry is even one kind of industry. The key focus of the research has been based on how outsourcing has been helpful in the development of the operational activities in most of the companies. There have been numerous studies that have provided extensive data in relation to the process of outsourcing along with their net result (Gantman 2017). The extent of outsourcing has been helpful in the determination of the products and the processes that is helpful in the development of the companies as a whole.
The development of outsourcing has developed after the advent of globalization and it is even seen that after globalization various industries from all over the globe have been mixing up with each other and therefore has been providing extensive services which in the earlier time period, the companies that are taking this assistance were unable to deliver themselves. O’Neill, Sohal and Teng (2016) have addressed that the process of outsourcing has reduced the cost for the companies and even has improved the degree of efficiency of the products and services they offer. The process of outsourcing is an interesting topic and very limited researches have been undertaken on this topic and therefore this topic has been taken into consideration in order to have an idea about the impact and the changes that have taken place in the overall business plan and operational activities of the companies that have incorporated outsourcing and have been making use of the same.
This research has concentrated mainly on 10 multinational companies that are operational in Australia and would be looking to assess and evaluate their outsourcing plans and strategies in relation to their operational activities. In the current time period, it is seen that most of the companies have been taking assistance of the outsourcing strategy. There are several sectors that comes within the outsourcing sector and this is inclusive of the security, catering, cleaning, and healthcare, information technology, legal, construction services etc. Australia is slowly making its mark in the use of the outsourcing process but the countries that mostly make use of outsourcing have been USA and UK (Edvardsson and Teitsdóttir 2015). There are several outsourcing services that a company can make use of but in order to make the research clear and precise the outsourcing process in relation to Information Technology in the multinational companies would be taken into consideration. Huo, Gu and Prajogo (2016) cited that most of the companies regard Information Technology to be their overhead cost. It is seen that this services can be undertaken in locations that are offshore and can be delivered with the assistance of internet. Hamed MoosaviRad, Kara and Ibbotson (2014) explained that it is the believe of the economists that offshore outsourcing of the business activities is not very much different from the international trade in services that leads to profits from the trade for both the nations.
Onshore and offshore outsourcing of the Information and Technology assistance is a key part of the Australian economy that is currently globalised. The companies that are operational in Australia have to take care of their strategic implications towards the IT offshore outsourcing and the companies have been looking IT as a product that can be outsourced to the companies that are offering the lowest bid. Faisal and Raza (2016) highlighted the impact of IT outsourcing on the knowledge of the outsourcer their assets, satisfaction and performance.
Hay, Stewart and Botica Redmayne (2017) have cited that businesses that are looking forward to mitigate their costs by terminating the onshore employees may not be performing for their best interests of the companies in the long term and by doing so the companies may lose their professional expertise, creativity and intellect. In the same manner, outsourcing may even lead to the depletion of the knowledge of the outsourcer, which implicates the fact that outsourcing can lead to sacrifice of the long term asset knowledge in order to attain the gains from the short term activities.
However, there are instances, where it is seen that outsourcing with respect to IT in the companies are profitable for the companies that are related to the IT and therefore outsourcing the IT related activities to one of the best IT related companies would enhance their level of productivity and efficiency level as well. This would influence the companies to concentrate on the activities in which they are experts and thereby enhance their level of work (Iden and Eikebrokk 2015). Hence, there are pros and cons for the process of outsourcing and therefore the current research that has been undertaken would be helpful in the creation of a better idea with respect to the impact of outsourcing on some of the multinational companies that are operational in Australia.
Outsourcing has been one of the key sectors that have developed in the recent times. There are several features that are offered with the help of outsourcing but along with the positive side, there are certain negative aspects as well. Outsourcing has been active in the Australian economy and the companies functional in this economy for a very long time (Bice 2015). However, there have been limited researches on outsourcing of Information Technology for the multinational companies in Australia. It is due to this fact that this research has been undertaken in order to provide a clear and lucid idea about the impact outsourcing has on the Information Technology of the companies in Australia.
The problems and the issues that are pertinent with this topic has been the factor that has motivated in the undertaking of this research. There has been a dilemma among the companies in Australia with respect to the incorporation of outsourcing in the Information Technology. They are in the mindset that outsourcing Information Technology may leak their information to the external parties and thereby creating the risk of reaching of the information to their competitors (Gilani and Jamshed 2016). They are even in the opinion that outsourcing Information Technology would make them vulnerable with respect to their privacy and security. However, there are positives for the process of outsourcing simply due to the fact that outsourcing would reduce their overhead costs and this in a way would increase their extent of profit and even enhance their quality of performance with respect to the products and services they offer (Schneider and Sunyaev 2016). It is due to these issues and problems that this research has been undertaken in order to determine the impact of outsourcing and whether they are a boon to the companies or are a threat to their long term gains and performance.
The aim of the research has been to discover the aspect in accordance to which the research paper would move ahead. Accordingly, the aim of the research has been to assess the efficiency of outsourcing among various functions and how it can innovate the process of development in the companies.
The objectives in relation to the topic have been determining the specific areas in accordance to the aim that would be addressed and stressed in order to attain the aim of the paper. The objectives are highlighted as follows:
Outsourcing refers to a business strategy agreed by the companies for contracting out the business process and the operational functions to another party. The evolution of outsourcing is evident across different types of services which are offered today. The components within outsourcing topic deals with the reasons for the companies to outsource and their types along with the benefits they attain. In early 20th century, companies were not seen to use outsourcing like the present day. The conceptualization of outsourcing gained popularity in 1989. The process started with companies hiring external suppliers for the various types of the ancillary services. Industrial revolution brought a paradigm shift in outsourcing and the way companies did business (Vorontsova and Rusu 2014). The market for goods was followed by a quick expansion and the profits were also seen to increase. The outsourcing service in general are inferred as project outsourcing, operating outsourcing, processional process and manufacturing process. Overtime outsourcing has gained popularity with more forms of outsourcing services arising and companies looking forward to minimize business while focusing on performance improvement. Outsourcing is recognised to include domestic contracting, foreign contracting, near shoring and offshoring services (Chakravarty et al. 2014).
The advent of globalization had created anticipation that outsourcing will be developing and therefore this would increase the revenue of the outsourcing industry. It is seen that most of of the outsourcing activities are IT related. Maduka Nuwangi et al. (2014) explained outsourcing to be the practice of the activities of shifting any kind of activities that had been previously administered internally to the external parties with the help of a long term agreement and associated to the transfer of the vendor. Alonso, Clifton and Díaz-Fuentes (2015) cited that outsourcing has been found to be variable from the financial to the purchasing decision. It is even seen that the strategy of outsourcing has become the answer for reducing cost as well as strengthening the competencies of the companies that are functioning in the current time period.
The recognition of the compatible fit within the information system and the company has been regarded as significant issues in the information system management in alongside with the current focus on the business processing outsourcing. Lin, Jalleh and Huang (2016) have addressed that the interest of research in the information system outsourcing has been regarded to be a huge part of information system along with the organizational alliance, which initiated a long time back.
This kind of factor types concentrates in the significance of the joint venture effort of the outsourcer and the provider of service in order to innovate. Petrova and Marinova (2015) discovered that joint venture estimation and the renewal process is vital for developing the innovative ideas. Westphal and Sohal (2016) had provided some practical recommendations in order to assist these joint processes that are practice with the help of their experience driven and non-scientific articles. The sharing of knowledge has a vital impact on the success of outsourcing, especially on the capability to innovate and develop IT technology in accordance to the renewal of the business. Lucia-Palacios et al. (2016) explained that shared vision and the extent of trust encourage the sharing of knowledge. In order to mitigate the extent of dependency on the individuals, a process of sharing and documented sharing is essential over the implicit knowledge. Glaister (2014) addressed the relationship based on the added value and therefore added the fact that added value has more potential for innovation in co-work then within an arm’s length relationship with precise and clear responsibilities. Hence, it can be implied that outsourcing is essential in the current time period simply due to the fact that the extent of competition and globalisation would require various innovative styles and strategies with the help of which development of the companies are possible (Lu, Hirschheim and Schwarz 2015).
Professional Outsourcing refers to the process pertaining to administrative support, accounting, legal and other specialized services. This is one of the common instance of outsourcing which has a potentially high cost savings related to the arrangement type. In this process of the outsourcing the companies are seen to pay for the services which are facilitated to them and resulting in considerable amount of reduction in the cost of the overheads (Liu et al. 2015).
This form of outsourcing refers to a common professional outsourcing practice. This is relating to seeking technological assistance outside the organization applicable for all or only a part of the information technology. The companies involved in the use of such an outsourcing process range from infrastructure to the, software development or maintenance support. In the recent times, all types of business have adopted this as a common platform to take IT assistance. For instance, a company involved in the outsourcing of the IT service will need to go through lesser cost burden of assigning the contract to a third party. This also allows the third party to build their personal IT team. In different types of the other instances the enterprise may involve in the acquiring of outsourcing strategy because it is not able to afford the data storage facility on its own, cannot afford to buy the services or maintain its own data storage service (Nyameboame and Haddud 2017).
Most of the large corporations takes the assistance of IT outsourcing and external international IT outsourcing. In various other research papers, it is recognised that IT outsourcing would take place in case a company outsources its IT management services to a less third party, which can operate it in a less expensive contract. In several occasions the IT outsourcing has resulted in external international IT outsourcing as well as external domestic IT outsourcing. The external domestic outsourcing strategy is termed with the baseline stage for the IT outsourcing. The advent of external domestic IT outsourcing has led the companies to enter into the outsourcing relation with the domestic IT service provider. The example of such as IT outsourcing can be seen with Kodak’s decision to outsource the IT needs to IBM. However, in the present times, the business entities are no longer restricted to the outsourcing as per the needs of the domestic IT service providers. This is the point when international IT service providers are seen to playing an active role. It needs to be further identified that functions of the IT outsourcing seen to be involved in terms of the various types of the wireless services. This allows the organizations to operate with low IT cost for communication. In addition to this, it is possible to transfer the IT activities anywhere across the globe. This also suggests that the IT outsourcing relationships are able to exist at any location (Lok and Baldry 2015).
Multisourcing is identified as an important strategy for the provision of the present services of the IT. The term multisourcing is depicted to be applicable to any business referring to the outsourcing of the IT services and linking the same in terms of the needs of the external and the internal IT service providers who are in the pursuit of the business goals. This strategy was seen to be initially introduced in 2005 within a market technology research firm and large enterprises in which the IT technology and operations are contracted among multiple vendors. The specific types of the IT service are associated to the multi-source leverages in which the specialist is able to focus on a single function of IT management (Zailaniet al. 2017). Additionally, multisourcing is referred as the outcome focused concept which is integrated with partner relationship thereby providing better visibility in the status of the project information and ensuring no or little conflict of interest between the functions. Despite of this, in multisourcing a network of governance and relationship requires a measurement for the matter (Butler and Callahan 2014).
The concept of manufacturer outsourcing gained popularity in the U.S. in 21st century and it is widely adopted by the other countries as well. This strategy of the outsourcing has been depicted to be responsible for transferring of the blue-collar jobs to third party for the different reasons of the expertise pertaining to the time to market, human capital and several types of the other cost factors. Since the advent of manufacturer outsourcing the white-collar jobs for various industries has been outsourced to the blue-collar work (Kovacich et al. 2017).
Focusing on the main sectors of the outsourcing, this process of outsourcing is another common method adopted by the companies involved in the production of the goods and also understanding of the various types of the outsourcing services. The services associated to the Manufacturer are typically industry specific in nature. For instance, an automobile manufacturer may include outsourcing arrangement for installation of windows into their exiting model. The primary task of such an outsourcing service is recognised with the quality issues and interruption of the production line. Several researchers believe that this outsourcing has a significant role for the survival of both small and mid-sized companies and upgrade theory equipment continuously. This is also depicted to be necessary for the competing in the market during shrinking of the product lifecycles (Nathans 2015).
This method of outsourcing relates to a specific internal procedure which is process oriented in nature. At present it is common to outsource the specific operational aspects to the other companies which are specialized in a specific service. Bakeries are seen to outsource the delivery of packaged cake to the courier company such as UPS and FedEx. This form of outsourcing contract needs to be incorporated with all the details such as customer contract, costs and timeliness of the delivery. Such an information is seen to be conducive for the companies in terms of focusing on the strength and improve the overall service provided to the customers thereby reducing time and cost. The process outsourcing further refers to process of the handing over the process of outsourcing from the public sectors like armed forces, fire department and police to the profit-making corporations (Paramonova, Ivner and Thollander 2015).
The outsourcing conceit is also applicable for the operational activities. This type of the outsourcing service is seen to be evident with the various types of the manufacturing units which provide the opportunity for the specific operational activities to be controlled by third party companies. For instance, the maintenance of the machines and equipment repair can be acquired with such an outsourcing service. The various types of the other operational activities may include property management, cleaning services, facilities maintenance and landscaping (Gunasekaran et al. 2015).
There are many organizations which have trouble in managing only a portion of the entire project. In this case, the company may adopt project outsourcing to complete only a portion of the project. The outsourcing is seen to be ranging among the individuals as well as the specialized units. It has been also seen that such service may be contracted to either to the complete projects or only a part of the projects. There may be several numbers of reasons for doing so including the outsourcing the skill, people and saving cost. This is considered as an appealing choice to contract an individual who is in-house or working long term to train someone especially if the function is commonly dealt with IT outsourcing (Thayer, Tremblay and McCoy 2015).
In the early 20th century and 19th century it was unconventional to outsource specialized unit or a specialized company located outside the country. At present the main notion of the outsourcing outside the country is becoming extremely common and also encouraged as a smart business strategy. The practice of offshoring refers to outsourcing the business functions to another country. In general, the work is offshored for reducing the labour expenses. At times, the outsourcing uses the strategic way to enter the new market and tap talent which was unavailable in the domestic market. India, Indonesia and China are regarded to emerge as dominant countries for outsourcing offshore. The main rationale for this is seen with the fluidity of outsourcing with improved telecommunications capacity (Žitkien? and Blusyt? 2015).
The companies sending the manufacturing jobs US to countries like China and India are depicted to be low cost and there is no brainer in the outsourcing decision. However, such manufacturers have realized that offshoring the production services to the countries like China and India may not prove to be cost effective in nature. The US based companies have started to bring the capacity of the offshoring manufacturing capacity back to home country. It has been inferred as the reversal of the transfer of a business operation back to the home country. The benefits in particular are discerned with several factors such as increasing price of oil which has affected the shipping costs, which needs to be corrected with reshoring options. In addition to, this, the companies are seen to be adopting to this strategy for accounting to the duties, custom charges, extended time for shipping and delays in the offshoring. Some of the other companies can go further and adopt insourcing, which entails that the outsourced process handled by the third party in house firms to accomplish the objective of vertical integration (Kang et al. 2014).
The companies are depicted to outsource minimize the cost which may be uncured because of the peripheral or “non-core” business expenses, production costs, high taxes, labor costs or excessive government regulation. The primary incentive to the outsourcing activity is further depicted to be higher in the U.S. with implementation of high corporate tax and mandating of other benefits such as Medicare, safety protection and social security. The rationale for the outsourcing among other countries may range from several types of the reasons such as minimizing and having a control of the operating cost. Moreover, some of the other benefits need to be inferred in terms of improved focus on the company. Improved access to the world class capabilities is seen as another reason of outsourcing along with freeing the internal resources for several types of other purposes. The various types of the other rationale for the outsourcing are depicted with streaming and increasing the overall efficiency for time consuming functions. Lastly, according to several other research study it is inferred that outsourcing is conducive in maximizing of the external resources (Schwarz 2014).
The advent of globalization and complexity in the supply chain with greater higher physical distance between production-floor employees and higher management is often seen with the change management methodologies for inspection and taking the feedback which may not be as direct to the internal process. This implication often results in assimilation of the new communications methods like Issue tracking systems, time tracking software and cost estimation software for schedule-assessment. The different types of the customer service and communications is evident in the area of call centre companies as the experience of the workers working in such an industry may suffer from the lower end-user-experience as a result of outsourcing (Wachira, Brookes and Haines 2016).
The process of data analysis is only possible with the help of the data that would be collected in accordance to the topic. Hence, research methodology plays a vital role with the help of which an idea can be ascertained with the help of which a course is streamlined with respect to which the type of data that would be used and the process that would be used in order to collect the data. In this respect, a research approach as well a research design has been prepared that would signify the models and theories that have been used for this paper.
The philosophy addresses the ideology that would be followed in this paper with the help of which collection of the data is possible and accordingly an idea can be obtained with the help of which better results can be discovered. There are three of kinds of philosophies and depending on the topic the philosophy is selected. In this manner, the three philosophies are known to be positivism philosophy, interpretivism philosophy and realism philosophy (Yigitbasioglu 2015). In accordance to the topic that has been taken into consideration positivism philosophy has been selected and therefore extensive explanation with respect to the topic would be done so that better results can be discovered. The other philosophies have not been selected as they are not able to address the factors and the elements that are desirable with this topic.
The approach of the research addresses the models and theories that would be used in order to collect the data and thereafter understand what sort of result is desired from the process of outsourcing. There are several kinds of theories and models that can be utilised but the choice is made on the basis of the topic. The two kinds of approaches that are available for use are deductive and inductive approach (Abdul?Halim et al. 2016). However, in accordance to this topic that looks to understand the impact of outsourcing it is seen that deductive approach would be used as no new models and theories have been constructed but on the other hand the theories and the frameworks that have been used earlier in previous researches have been used. Hence, deductive approach is preferred over inductive approach.
The research design addresses the process and the method that would be used for the purpose of creating a guideline that would be followed with the help of which outcome that is needed is acquired. It is seen that the guideline that would be followed would be helpful in the development of the outcome that is desirable. The guideline provides an aspect that would be followed with the help of which better research and analysis can be done. Lahiri (2016) addressed the fact that there are three kinds of designs that can be selected and it is seen that they are known to be descriptive research design, explanatory research design and exploratory research design. However, in relation to the topic that is considered in this paper, it is seen that descriptive research design has been selected because of the fact that all the aspects can be explained in a detailed manner with the help of which better and effective outcome can be ascertained. It is seen that qualitative as well as quantitative data would be taken into consideration and therefore all these aspects would be explained with the help of which the impact of outsourcing can be understood in a better way. It is even seen that in relation to outsourcing, there are various kinds of processes that are available and it is seen that the one that is useful for the development of the operational activities would be understood in an effective manner.
Primary data is is known to be the data that is collected from the selected respondents with the help of which the information in accordance to the topic can be ascertained (Wan et al. 2017). The topic of outsourcing has been a developing concept and therefore the perception of the employees who are working in the companies who are making use of outsourcing needs to be understood. Hence, primary data is essential for this research.
Quantitative data is referred to the data that constitutes of the data which are in numerical figures with the help of which an understanding and impact of outsourcing on the companies can be understood in a better manner (Chaplin 2017). In accordance to the paper, survey analysis would be done from the employees who are working in the companies that are making use of outsourcing and thereby better understanding and results can be gathered in an effective manner.
Qualitative data is known to be the data that refers to the perceptions and the point of view of the participants. In this kind of data the mind set and the answers of the respondents are understood and accordingly assessments would be done (Khan et al. 2017). In this manner, interview has been done for the selected for the managers of the companies that have been selected and accordingly the results can be gathered.
This is one of the key area of the paper as addressing the process of collecting the data would determine the effectiveness of the data and accordingly the process that is ideal for this research. It is due to this fact that primary data has been collected from the respondents who are working in the 10 multinational companies that are making use of outsourcing process has been selected. A total of 50 respondents have been selected from the 10 multinational that have been selected has been taken into consideration and they are provided with a close ended questionnaire with the help of which their feedback and their perceptions can be understood. In the same way, interview has been undertaken from 5 managers of the 10 multinational companies in order to gather their feedback and their responses with respect to the process of outsourcing and accordingly the impact it has on the companies and their employees as well.
The evaluation of the data is done with the help of various statistical tools that are important for the completion of the research. It is seen that SPSS analysis has been undertaken with the help of which better and authentic results can be undertaken. The feedback from the questionnaire are converted into figures and thereafter inserted in the SPSS software with the help of which effective outcome of the paper has been ascertained.
The data evaluation technique and process has been taken into consideration with the help of which better and authentic results can be ascertained. The paper has undertaken qualitative data analysis as well as quantitative data analysis process and each one of them would be explained in an explicit manner.
Gender |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
Female |
38 |
76.0 |
76.0 |
76.0 |
Male |
12 |
24.0 |
24.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
This question is associated to having an understanding of the gender of the respondents. It is seen that 76% of them are female and the rest of 24% are male. This addresses that most of the employees who have been chosen are female with respect to male.
Age Group |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
18-25 years |
6 |
12.0 |
12.0 |
12.0 |
26-35 years |
13 |
26.0 |
26.0 |
38.0 |
|
36-45 years |
19 |
38.0 |
38.0 |
76.0 |
|
46-55 years |
8 |
16.0 |
16.0 |
92.0 |
|
56 years and above |
4 |
8.0 |
8.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
The age group of the respondents reveal that 38% of them are within the age group of 36-45 years and 26% of them are within the age group of 26-35 years. 16% of them are within the age group of 46-55 years and 12% are within the group of 18-25 years. Only a handful of 8% are 56 years and above and thereby explaining that the respondents are middle aged.
Reason for outsourcing |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
Focus on the objectives of the business |
16 |
32.0 |
32.0 |
32.0 |
Risk sharing |
12 |
24.0 |
24.0 |
56.0 |
|
Make use of the resources that are not available |
16 |
32.0 |
32.0 |
88.0 |
|
Cost |
4 |
8.0 |
8.0 |
96.0 |
|
Others |
2 |
4.0 |
4.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
The question associates to the understanding of the fact why outsourcing has been used. The results show that 32% feel in order to focus on the objectives of the business and 24% have the feeling for the purpose of sharing of the risks. 32% of the other respondents even feel that outsourcing is helpful in making use of the resources that are not available to the companies. 8% of the respondents feel the reason has been cost and only 4% feel that there are other factors for the purpose of outsourcing.
Outsourcing had a positive impact on the organizations |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
Strongly agree |
15 |
30.0 |
30.0 |
30.0 |
Agree |
15 |
30.0 |
30.0 |
60.0 |
|
Neutral |
15 |
30.0 |
30.0 |
90.0 |
|
Disagree |
5 |
10.0 |
10.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
This question tries to find out whether outsourcing has a positive impact on the companies and the results that have been obtained has been very interesting. It is seen that 30% strongly agree to this point and 30% agrees to this point. The same percentage of 30% have remained neutral and the rest of 10% have disagreed to this point. This explains that positive impact is attained with the help of outsourcing for the companies.
The future of outsourcing is a prospective one |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
Strongly agree |
13 |
26.0 |
26.0 |
26.0 |
Agree |
22 |
44.0 |
44.0 |
70.0 |
|
Neutral |
11 |
22.0 |
22.0 |
92.0 |
|
Disagree |
4 |
8.0 |
8.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
The question asked has been looking to find out whether future of outsourcing is a positive one and it is seen that 44% have agreed to this point and 26% have strongly agreed. 22% on the other hand have remained neutral and a small section of 8% have disagreed to this point. It is therefore seen that outsourcing has potential for development in the coming future.
Outsourcing had an impact on the economy |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
Strongly agree |
13 |
26.0 |
26.0 |
26.0 |
Agree |
22 |
44.0 |
44.0 |
70.0 |
|
Neutral |
10 |
20.0 |
20.0 |
90.0 |
|
Disagree |
4 |
8.0 |
8.0 |
98.0 |
|
Strongly disagree |
1 |
2.0 |
2.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
This question is looking to gather the data as to whether outsourcing has an impact on the economy. The results signifies that 44% have agreed and 26% have strongly agreed. It is seen that 20% have remained neutral and 8% have disagreed to this point. Only 2% of the respondents have strongly disagreed to this point and thereby addressing the fact that outsourcing has an impact on the economy.
The outsourcing decision would impact the future strategic options and alternatives |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
Strongly agree |
8 |
16.0 |
16.0 |
16.0 |
Agree |
31 |
62.0 |
62.0 |
78.0 |
|
Neutral |
8 |
16.0 |
16.0 |
94.0 |
|
Disagree |
3 |
6.0 |
6.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
This question has tried to discover the fact that whether the decision of outsourcing would impact the future strategic options and alternative and accordingly 62% have agreed to this point and 16% have strongly agreed as well. It is seen that 16% have remained neutral and 6% have disagreed to this point. It can therefore be said that future strategic option and alternatives are impacted with the help of outsourcing.
The impact of outsourcing would have an impact on the customers |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
Strongly agree |
15 |
30.0 |
30.0 |
30.0 |
Agree |
20 |
40.0 |
40.0 |
70.0 |
|
Neutral |
13 |
26.0 |
26.0 |
96.0 |
|
Disagree |
2 |
4.0 |
4.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
This question has looked to answer whether outsourcing has an impact on the customers. 40% of them have agreed to this point and 30% have strongly agreed. 26% have stayed neutral and only 4% have disagreed. It is therefore seen that impact on the customers are seen with the help of outsourcing.
Outsourcing helps in the development of the core competencies of the companies |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
Strongly agree |
17 |
34.0 |
34.0 |
34.0 |
Agree |
25 |
50.0 |
50.0 |
84.0 |
|
Neutral |
4 |
8.0 |
8.0 |
92.0 |
|
Disagree |
4 |
8.0 |
8.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
This question is asked in order to have an understanding of whether outsourcing helps in the development of the core competencies of the companies. The outcome suggests that 50% of them agreed to this point and 34% have strongly agreed. 8% have remained neutral and the rest of 8% have disagreed to this point. The respondents therefore feel that core competencies of the company are improved and developed with the help of outsourcing.
Long term commitment towards the development of relationship with the help of outsourcing is identified |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
Strongly agree |
18 |
36.0 |
36.0 |
36.0 |
Agree |
19 |
38.0 |
38.0 |
74.0 |
|
Neutral |
8 |
16.0 |
16.0 |
90.0 |
|
Disagree |
5 |
10.0 |
10.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
In accordance to the question that looks to answer the fact that the long term commitment towards the development of the relationship with the help of outsourcing is identified addresses the fact that 38% have agreed to this point and 36% have strongly agreed to this point. 16% of them have remained neutral and the rest of 10% have disagreed to this point.
Outsourcing reduces the extent of risk for the companies |
|||||
Frequency |
Percent |
Valid Percent |
Cumulative Percent |
||
Valid |
Strongly agree |
22 |
44.0 |
44.0 |
44.0 |
Agree |
16 |
32.0 |
32.0 |
76.0 |
|
Neutral |
9 |
18.0 |
18.0 |
94.0 |
|
Disagree |
3 |
6.0 |
6.0 |
100.0 |
|
Total |
50 |
100.0 |
100.0 |
This question has tried to discover the fact as to whether outsourcing reduces the extent of risk for the companies and accordingly 44% have strongly agreed and 32% have agreed. 18% of them have looked to remain neutral and the rest of 6% have disagreed to this point.
The overall analysis of all the question determines the fact that outsourcing has been for the betterment of the companies who have been making use of it and therefore can be said that outsourcing is a key aspect for all the companies in the current time period.
The process of correlation analysis is undertaken in order to provide a brief idea about the extent of mutual relationship and understanding among the variables that have been taken into consideration. The extent of relationship being positive would explain the fact that all the variables directly related to each other and therefore would provide extensive development of the companies with the help of outsourcing. It is seen that this extent of relationship would lead to developments in the outsourcing process with the help of which better results and actions can be undertaken. The correlation analysis for the concerned topic has been given as follows:
Correlations |
|||||||||
Outsourcing had a positive impact on the organizations |
The future of outsourcing is a prospective one |
Outsourcing had an impact on the economy |
The outsourcing decision would impact the future strategic options and alternatives |
The impact of outsourcing would have an impact on the customers |
Outsourcing helps in the development of the core competencies of the companies |
Long term commitment towards the development of relationship with the help of outsourcing is identified |
Outsourcing reduces the extent of risk for the companies |
||
Outsourcing had a positive impact on the organizations |
Pearson Correlation |
1 |
.525** |
.346* |
.298* |
.376** |
.191 |
.149 |
.276 |
Sig. (2-tailed) |
.000 |
.014 |
.035 |
.007 |
.184 |
.302 |
.052 |
||
N |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
|
The future of outsourcing is a prospective one |
Pearson Correlation |
.525** |
1 |
.514** |
.253 |
.499** |
.306* |
.423** |
.193 |
Sig. (2-tailed) |
.000 |
.000 |
.076 |
.000 |
.030 |
.002 |
.179 |
||
N |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
|
Outsourcing had an impact on the economy |
Pearson Correlation |
.346* |
.514** |
1 |
.449** |
.334* |
.310* |
.345* |
.183 |
Sig. (2-tailed) |
.014 |
.000 |
.001 |
.018 |
.028 |
.014 |
.203 |
||
N |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
|
The outsourcing decision would impact the future strategic options and alternatives |
Pearson Correlation |
.298* |
.253 |
.449** |
1 |
.344* |
.304* |
.311* |
.409** |
Sig. (2-tailed) |
.035 |
.076 |
.001 |
.015 |
.032 |
.028 |
.003 |
||
N |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
|
The impact of outsourcing would have an impact on the customers |
Pearson Correlation |
.376** |
.499** |
.334* |
.344* |
1 |
.503** |
.369** |
.265 |
Sig. (2-tailed) |
.007 |
.000 |
.018 |
.015 |
.000 |
.008 |
.063 |
||
N |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
|
Outsourcing helps in the development of the core competencies of the companies |
Pearson Correlation |
.191 |
.306* |
.310* |
.304* |
.503** |
1 |
.610** |
.289* |
Sig. (2-tailed) |
.184 |
.030 |
.028 |
.032 |
.000 |
.000 |
.042 |
||
N |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
|
Long term commitment towards the development of relationship with the help of outsourcing is identified |
Pearson Correlation |
.149 |
.423** |
.345* |
.311* |
.369** |
.610** |
1 |
.250 |
Sig. (2-tailed) |
.302 |
.002 |
.014 |
.028 |
.008 |
.000 |
.080 |
||
N |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
|
Outsourcing reduces the extent of risk for the companies |
Pearson Correlation |
.276 |
.193 |
.183 |
.409** |
.265 |
.289* |
.250 |
1 |
Sig. (2-tailed) |
.052 |
.179 |
.203 |
.003 |
.063 |
.042 |
.080 |
||
N |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
50 |
|
**. Correlation is significant at the 0.01 level (2-tailed). |
|||||||||
*. Correlation is significant at the 0.05 level (2-tailed). |
The analysis that has been done for data that has been collected reflects the fact that outsourcing has a positive impact variable has positive relationship with the other variables. It is seen that some of the variables are highly related and some of the variables are positive but the extent of relationship is low. The other variable which is future of outsourcing is a prospective one addresses the fact that there exists positive correlation in accordance to the other variables as well.
The same is seen for the variable outsourcing decision on the future strategic options and this variable has shown positive relationship and therefore changes in one variable would have an impact on the other variables as well. The variable related to outsourcing on the customers shows a positive relationship but the relationship is very low as the figures have been close to 0. In this manner, the other variables that have been addressed explains the fact that there exists positive relationship and some of the variables are highly correlated as the figures have been close to 1 and some of the variables have been close to 0. It is therefore seen that a positive and high correlation is existent with the help of which better extensive answers can be ascertained.
Reliability Statistics |
|
Cronbach’s Alpha |
N of Items |
.735 |
11 |
Item-Total Statistics |
||||
Scale Mean if Item Deleted |
Scale Variance if Item Deleted |
Corrected Item-Total Correlation |
Cronbach’s Alpha if Item Deleted |
|
Gender |
21.50 |
27.643 |
-.009 |
.748 |
Age Group |
19.92 |
26.687 |
-.010 |
.777 |
Reason for outsourcing |
20.46 |
23.886 |
.240 |
.741 |
Outsourcing had a positive impact on the organizations |
20.54 |
22.539 |
.454 |
.704 |
The future of outsourcing is a prospective one |
20.62 |
22.240 |
.562 |
.690 |
Outsourcing had an impact on the economy |
20.58 |
22.575 |
.459 |
.704 |
The outsourcing decision would impact the future strategic options and alternatives |
20.62 |
23.302 |
.546 |
.698 |
The impact of outsourcing would have an impact on the customers |
20.70 |
22.337 |
.583 |
.688 |
Outsourcing helps in the development of the core competencies of the companies |
20.84 |
22.749 |
.522 |
.697 |
Long term commitment towards the development of relationship with the help of outsourcing is identified |
20.74 |
21.747 |
.565 |
.687 |
Outsourcing reduces the extent of risk for the companies |
20.88 |
23.618 |
.368 |
.717 |
The reliability is done in order to determine the degree to which all the variables are reliable in accordance to this topic. It is seen that Cronbach’s Alpha value is calculated with the help of which better results can be determined. Cronbach’s Alpha is known to be the estimate of the reliability of any sort of psychometric test. It is known to be the estimated correlation of the two tests that assesses the similar construct. This helps in the creation of a proper understanding that the average correlation of a set of items in a precise estimate of the aggregate correlation of all the items that is pertinent to a specific construct. In accordance to the assessment of the topic, it is seen that the Cronbach’s Alpha value has been 0.735 and this value is an acceptable value. Hence, it can be ascertained that all the variables that have been taken into consideration are reliable and therefore it can be stated that outsourcing has significant impact on the operational activities of a company and therefore the companies that are making use of this service is making precise profits and have been lower their extent of costs and has even been able to attain capital gains.
The interview process has been done by selecting 5 managers from the 10 multinational companies. The managers have been asked open ended questions with the help of which their feedback and perception on the process of outsourcing has been determined. It is seen that a total of 5 questions have been asked and the answers of the managers have been evaluated on an overall basis in order to reach a conclusion.
The first question that has been has been whether cost reduction is possible with the help of outsourcing and it is seen that 3 of the managers are confident about the fact that outsourcing has been able to reduce their level of cost. On the other hand, one manager is not certain about the cost reduction factor while the remaining manager felt that no room for cost reduction has been possible with the help of outsourcing.
The next question that has been asked to the managers has been the fact that whether sharing of risk is possible with the help of outsourcing and whether this is a positive sign for the company. 4 out of the 5 managers have agreed to the fact that risk sharing is done with the help of outsourcing and they have a feeling that this one of the key factors that have motivated the companies to incorporate the process of outsourcing. They have expressed the fact that outsourcing is a positive sign for the companies as it reduces their burden and accordingly improves the operational activities as well. Only one manager has expressed his view that risk sharing is not possible entirely even though feels that outsourcing is a positive sign for the companies.
The next question that is asked to the managers has been the fact that whether outsourcing has been able to meet the core business objectives. The responses of the managers expresses the view that all of them are not entirely confident that outsourcing has been able to meet the objectives of the business as they have expressed their view that objectives of the company is possible with the help of management activities of the firm.
The next question that was asked to the managers has been whether outsourcing process has reduced the burden of work from the employees. It is seen that most of the managers have expressed the fact that the burden of work for the employees in the department where outsourcing has been incorporated has reduced whereas the other employees from various other departments are still working with the same burden that was existent earlier. It can therefore be stated that only a specific group of employees from the department where outsourcing has been done.
The last and the final question that has been asked to the manager has been whether outsourcing leads to the injection of additional capital from the market. The managers have pointed out the fact new capital is created when the operational activities are enhanced and outsourcing has been a factor that leads to operational development and hence, most of the managers have expressed the fact that outsourcing does not at all levels are able to bring about additional capital from the market.
Therefore, the overall evaluation of the interview addresses the fact that outsourcing has been able to enhance the activities of the company and it can be stated that outsourcing has positive impact on the operational activities of a company.
Conclusion
Outsourcing is one of the most aspects of conducting business in today’s ultra-competitive business environment. This research on the impact of outsourcing on various companies has helped in delving into the deeper aspects of the topic of outsourcing. As has been stated above, this research has been completed by making use of both primary as well as secondary data. Both quantitative as well as qualitative data has been used for completing this research. As has been seen above, both the approaches of taking interviews and conducting questionnaires to the various business activities. Various important aspects of this work of outsourcing by various companies had been found out while conducting the interviews and questionnaires. It is the practice of hiring resources from outside of a business organisation for handling the different kinds of repetitive and information technological functions. It helps the main company which is outsourcing its functions in delegating the similar kind of monotonous tasks, which are repetitive in nature. It helps the main company in focusing on the most important functions, saves their time, and helps in delegating the other secondary functions to the outsourcing companies. The directors and the management of the company which outsources its activities, take their time in focusing on some of the important tasks on which their attention is required. As has been discussed above one of the most important reasons which compels a company to resort to the act of outsourcing its activities, is the act of reducing its costs and operating expenses. Moreover, after conducting this comprehensive research on this subjects, some important observations have been made, as have been indicated above. The company outsourcing its activities gets rejuvenated and starts focusing on its core business activities with a renewed focus, which helps in lending a core competitive advantage from its competitors, and as mentioned above, by outsourcing the activities to some of the specialised companies which have considerable experience in handling such kind of tasks, thus adding to increased efficiency. However, there here we have also seen some of the negative aspects, which outsourcing has to offer, along with its barrage of positive impacts on the performance and working of various companies. The companies which are performing the outsourcing activities might have commit bad service delivery, or it might be instable and can go out of the marketing at any time and even the security aspects of the work entrusted to them might be compromised. However, despite all these kinds of negative impacts and disadvantages, the overall impact of outsourcing on the business activities and on the overall performance of the companies remains a positive one. All these kinds of positive impact has a welcoming effect on the performance of the companies. It is only because of this that has enabled the companies of today welcome and embrace the idea of outsourcing with open arms. It has brought about a distinctive level of advantage compared to the companies which have refrained from initiating the act of outsourcing. Thus, it can be concluded that there has been a large scale impact of a positive nature of outsourcing on the companies of today.
Outsourcing has served to be a boon for both the companies which outsource their activities and functions and also for those companies which provide the outsourcing services. For both these kinds of companies, the activity of outsourcing can be done in a better way and for this purpose some recommendations are provided. For the companies which perform the outsourcing services for big Multinational companies, a long standing professional relationship is created which begins to develop and it helps this company in opening a door to the other multinational corporations. This professional relationship helps the outsourcing company in opening a vistas of various opportunities. With increased focus on outsourcing, the MNCs could lend their hand in improving the infrastructure and by providing other facilities for their betterment, in this way a mutually cohesive relationship gets established. Taking preventive measures and steps, consistent monitoring and taking all the different safety measures could go a long way in improving the outsourcing of different kinds of activities from company to company. Lucidity and transparency of activities, among the outsourcing company and the outsource service providing company could go a long way in improving the outsourcing services. Digitalising the relations in this era of digitalisation would also go a long way in improving the different aspects of outsourcing. Usage of proper compliance management systems can also help the outsourcing providing companies in helping them to understand the needs and requirements of the companies which are delegating its activities. Conducting periodic investigations at regular intervals of time also helps in bettering the job of outsourcing. This would help in evaluating the overall quality of the outsourcing contract. This would help in improving the overall aspect of outsourcing in the future.
Research in any arena of business is the cornerstone of success. Without adequate amount of investment in the research and development arena of any business venture, nothing can grow out of it. Outsourcing of activities of businesses, is not an exception to all this. In the future, with the advent of new kind of technology, outsourcing of services will be done on a large scale. Amongst the new technologies which are going to take the world by storm is the cloud computing technology. In the future years, outsourcing and cloud sourcing will merge and will provide real opportunities of growth for the outsourcing industry. With the development of the smaller nations, in the wake of large scale digitalisation, outsourcing of activities of the big businesses, would only continue to increase. This would enable the increased amount of research into this arena, which would open new areas and vistas of business opportunities and research work. The increased and improved amount of research about the new businesses and other kinds of outsourcing topics would help in improving the overall quality of outsourcing services. Such kind of technological innovations in the future would go a long way in improving the arena of outsourcing.
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