Advantages & Disadvantages of Outsourcing Busines
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Added on 2020-04-01
Advantages & Disadvantages of Outsourcing Busines
Added on 2020-04-01
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RUNNING HEAD: Business ResearchBusiness ResearchAdvantages and Disadvantages of OutsourcingBusiness Functions
Table of ContentsIntroduction...........................................................................................................................................3Project Objective...................................................................................................................................3Project Scope.........................................................................................................................................3Literature Review..................................................................................................................................3Research Questions...............................................................................................................................5Research Design and Methodology.......................................................................................................6Research Methods.............................................................................................................................6Research approach............................................................................................................................6Collection of data..............................................................................................................................6Technique of sampling.......................................................................................................................6Reliability and Validity.......................................................................................................................7Ethical Consideration.........................................................................................................................7Research Limitations.............................................................................................................................7Research Schedule (Research Plan).......................................................................................................7Gantt chart........................................................................................................................................9Conclusion.............................................................................................................................................9References...........................................................................................................................................11
IntroductionThe research report is based on the topic ‘Advantages and Disadvantages of OutsourcingBusiness Functions’ and this section of the report will contain the details of the research datacollection and methods undertaken to complete the research. Outsourcing can be understoodas the process where the business organisations transfers their business functions to othercompanies to get them completed by paying a fee or price for it. It means that the businessfunctions can be completed by the outsiders rather than completing them by internal teams.This process is helpful in reducing costs of the business and brings expertise in the businessfunctions (Pratap, 2014). The research will highlight the advantages and disadvantages ofsuch process by collecting reliable data from different sources. This research report will alsoinclude the methods adopted for conducting the research.Project Objective The main objective of this research is to identify the advantages and disadvantages ofoutsourcing business functions. This objective will be achieved by going through variousresearch papers, journal articles, books and many other web sources of information. Theobjective is to determine whether the businesses should outsource their business functions ornot.Project ScopeThe scope of the research is wide as Outsourcing business functions is one of the significantdecisions which is taken by the companies. Different reviews and opinions given by variousauthors will be discussed in order to know whether it is beneficial to outsource businessfunctions or it is harmful for the privacy concerns of the company.Literature ReviewOutsourcing of business functions is a commonly used method nowadays by the businessorganisations. It is a significant tool for the companies through which the businesses can gettheir work done in reduced costs and with better perfection. It helps in deriving thecompetitive advantage for the businesses. There are several advantages of outsourcing the
business functions and also some of the disadvantages. Various authors have differentopinion about the same.It has been opined by Krstic and Kahrovic (2015) that Outsourcing of business functions leadto several advantages like building core competency, flexibility, reduction of costs andreduction in the required capital investment. Another opinion was given by Iqbal & Dad(2013) who said that the companies handover their functions to other companies to seekperfection and to focus on their core functions. This leads to the global advantages to thecompanies by letting them compete with the other organisations. The main reasons whybusinesses decides to outsource their functions includes improvement in the flow of cash,payments, staffing and in the whole business performance. Outsourcing is adopted by thebusiness to get competitive advantage at a global level. Because of the use of technologyaccessed from different parts of the world, the business is able to provide better services andproducts to the customers. This also enhances customer satisfaction and also enlarges thescope of the companies and their growth in the industry (Marvin, 2011).In contrast to the above views there are some of the authors which are against outsourcing thebusiness functions. In their view, outsourcing of the business functions can lead to the threatto privacy and confidentially of business functions of the company. It also includes somehidden costs which increases the overall cost of operations of the business. It also createssome of the quality issues with the functions which affect the customer satisfaction.Outsourcing can also lead to the loss of managerial control which creates a threat to theprivacy of the organisations. It can create issues between the parties and also the response andcommunication between the parties can slow down. In the views of Brcar (2011), outsourcingindustry will rise in future.Outsourcing of business functions can bring competitiveness in the organisations. There aremany examples which prove that outsourcing of the business functions can be advantageousas well as disadvantageous. According to Cowley (2004), the biggest example of failure ofoutsourcing is the case of cancellation of an outsourcing contract between JP Morgan andIBM where the contract of $5 billion was cancelled by JP Morgan and they started their in-house production facilities which was much more profitable for them. Another exampleshows the success story of outsourcing the business functions. The example is of P&G whichoutsourced its Research and Development activities which ultimately increased the overallrevenue of the company.
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