Understanding Business Process Outsourcing

This assignment delves into the complexities of Business Process Outsourcing (BPO) by examining a collection of academic articles. It requires you to analyze various aspects of BPO, including its impact on competitive advantage, innovation, contractual challenges, and performance. Specific research papers are provided to guide your exploration of these themes.

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Business Research
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Introduction
In the current world we are living, business have devised new ways of thriving in order to
thrive effectively in the face of competition. It is important to note that competition is becoming
severe and every business yearns to become the best in its field of specialization. Among this
strategies is outsourcing where business make out official contract with third party service
providers. Since time in memorial, this business strategy was associated with large
manufacturing businesses but nowadays it has been adopted by other small-scale firms because it
proves successful in carrying out business operations .Outsourcing may take various forms,
which include back office sourcing of front office sourcing (Bharadwaj et al., 2010). With back
office sourcing, internal operations of a business such as human resources, accounting are
outsourced. On the other hand, front office outsourcing includes customer related services among
other key services.
As mentioned earlier, outsourcing is very vital in the operation of a business as it helps
increase the flexibility in some way. However, outsourcing of business increases the flexibility
of an organization in variety of ways (Bharadwaj et al., 2010). For instance, outsourcing vendors
offer services at a fee and hence employing the use of models such as remote outsourcing help
the company increase flexibility through changing fixed into costs. Secondly, outsourcing helps
increase its flexibility by making it pay more attention on its competencies with pressure from
outside demands (Bustinza & Arias-Aranda, 2010). Basing our argument on the importance of
outsourcing in business, this paper aims at looking at the advantages as well as disadvantages
associated with it in the global environment.

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Project objectives/overview
As prior stated, the aim of every business is to ensure it overdoes other competitors at a
fair competition. This can be achieved through employing of various strategies to see the
achievement of the set goals. We have to agree with the point that globalization has taken the
world and hence businesses have to change their old strategies and adopt new ones for the better.
Since time in memorial, companies have been using partnership as a business strategy to
improve results. Indeed partnership helps companies grow bigger with time and gives the
business a wide access to workers with adequate skills and experience. On the other side of
reality, some well-known companies have incurred losses because of outsourcing from the third
party agents.
This makes us raise some questions. For example, how can outsourcing be trusted by
businesses? It the effort of answering the above question we need to look at the positive as well
as the negative side of outsourcing. By doing so, we would be able to understand the
impact/effect of outsourcing in the current business trends. This project therefore hints at doing a
thorough discussion on the already existing literature review on outsourcing. It goes deep into
highlighting the advantages as well as the disadvantages associated with outsourcing process.
Project scope
There already exists information from peer-reviewed journals on the process of
outsourcing in business. This paper aims to provide a literature review from this already done
research. Moreover, real examples would be incorporated to bring some sense in the project. In
addition, these examples would seek to elaborate the goods and the ills of outsourcing in
business. From a general point of view, it is always advisable for businesses to co-work in

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collaboration with other enterprises in order to secure resources and increase the efficiency of the
workers.
This current project will not go without examining all this issues that are related to the process of
outsourcing in business. Looking at the existing gaps in the literature as well as the limitations
are some of the major concerns that cannot be left.
Literature review
Numerous researches have been conducted to examine the advantages and disadvantages
of our topic of concern, which is outsourcing.
Advantages of outsourcing in business
Cuts the cost and help out in the manufacturing process
It is important to note that every other business aims at minimizing the cost while
maximizing the profit at the same time. The will be no progress if a business incurs a lot of
expense in production than the one it ploughs back. Outsourcing process helps minimize the
expenditure of a business (Bustinza & Arias-Aranda, 2010). The question arises here, how does
it achieve this? This is because many large companies have a tendency of looking for cheap labor
from various parts of the world in order to minimize their cost of production. Normally, labor
from Far East countries like India, china and Arabia are cheap and hence companies from
western countries tend to divert their labor force from these regions (Zhang et al., 2006).
From a real example, most countries in the west including United States of America have
diverted there economy to the china. Assembling of electronics is nowadays done in china
simply because labor there is cheap and affordable. Moreover, we also need to look at another

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perspective in that through hiring labor from foreign countries, new trends and innovation come
along with these workers hence merge them to their business processes (Wüllenweber et al.,
2008). This is very good ways acquiring new technology as chances of protecting individual
innovations are minimal.
It is crucial to note that outsourcing leads to a corresponding increase in the quality of
after sell services in that the time spent in delivery is minimized too (Carnahan & Somaya,
2013). Also fostering innovation is also possible by utilizing the newly acquired labor.
Nowadays companies are investing a lot of capital in coming up with a kind of
infrastructure that sustains the production process. Remember there is need for a business to keep
at par with others other business in terms of technological advancements. However, with
outsourcing, this proves unimportant bearing in mind that most of production is performed by the
third party agencies (Nadkarni & Herrmann, 2010).
Citing some living examples, we all know about the famous Samsung Company that
deals with electronics ranging from mobile phones, radio, and television sets (McIvor, 2000).
Having discovered that the operation costs were high, this company decided to collaborate with
other companies to at least cut off some cost (Carnahan & Somaya, 2013). As a result, several
third party agents have collaborated with it. Through this collaborative role, Samsung has been
able to get a good reputation from many people through its superb after sell services, which
include giving a warrant (Carnahan & Somaya, 2013).
Apple Company is also known for its expensive and unique products. Apple merges its
operations with the Foxconn among other minor partners. Foxconn is delegated with the role of
manufacturing all mobile phones that come under the brand name of apple (Massini & Miozzo,

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2012). Through this strategy, Apple Company has been able to go global in that its products are
getting market in Asian countries and American countries.
Vital area focus of business
In the effort of implementing a business plan, a number of activities take place to affect
it. Some of this activities include carrying a though business market survey aiming to collect
information that would facilitate in making the final business plan as well decision (Halvey &
Melby, 2007). It is important to note that having a proper knowledge of current market trends
gives an upper hand to a business in competing favorably with other businesses.
Getting the recent market news is enhanced through large companies with various
research firms. Having the already existing market information, the business managers will
therefore be able to focus on the core issues of the business (Handley & Benton, 2009).
Consequently, minimal time would be used in drawing the business plan.
Assists in employee recruitment
Large companies are always faced with the problem of selecting a competent manpower.
This problem can be solved through outsourcing where companies the type of workers they think
fit for their organization (Javalgi et al., 2011).
Disadvantages of outsourcing business
Arising of issues relating to cost and pricing

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Considering the main aim of a business being to minimize the expenditure of the company, there
is exists unforeseen costs that come across in the process of outsourcing. Costs are incurred in
the process of contacting a third party agency (Lacity & Willcocks, 2012).All the money spent in
this process is the responsibility of the business but there is tendency by companies to fail to
include it in its expenses. In addition, money is used in following the legal procures of
contracting. All these costs tend to be excluded in the final company’s financial report hence this
makes part of hidden cost.
Fear of exposing classified information
It is beyond doubt that in the process of outsourcing, the company has to expose some of its
secrets to the contracting agency. This may be sometimes risky, as information may be made
known to the rivals. In addition, information relating to finance may be made public hence
posing a great threat to the company.
Gaps arising from the literature
Despite numerous researches done on this, there exist some gaps, for instance, there are no
intentions to counteract with the burning issues resulting from outsourcing, and hence it forms a
fertile ground for further research.
Research questions/hypothesis
1. What are the disadvantages and disadvantages of outsourcing in business?(primary)
2. Are there existing gaps that need to be addressed?
3. Is outsourcing an outdated strategy or latest strategy in business?
Research design and methodology

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Both qualitative and quantitative methods were employed in carrying out research on
outsourcing. Methods employed in collecting the data ranged from, observation, interview
among other methods. These methods proved to be effective and dependable in coming with
results that can be substantial (Mani et al., 2010). Indeed these methods used were the most
effective for the problem at hand. Random choice of participants was made. It is important to
note that data collected through direct observation was mainly qualitative and hence seemed hard
to people. In order to make it simple, drawing tools were used to present it (Lacity & Willcocks,
2013). Data collected through interview was quantitative and was more meaningful compared to
quantitative one.
Moreover, quantitative data collected was put into graphs to make it more meaningful tend
adverse research has been done on the same topic and hence a lot of information was available in
the internet that opened a platform for comparison.
Research limitations
The process of collecting the data was not smooth from the start to the end as several constraints
hindered its success. Some of these limitations included;
a) The formulation of research aims and objectives posed a problem, as there was the
feeling that the aims were so broad.
b) Also choosing data collection methods was also a problem as we were uncertain of which
method best suited the scope of study.
c) Coming up with a scope of discussion was not as easy task as we were not used to
producing such long academic papers.
Research plan/ time schedule

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In order to come up with successful research conclusions at the end, we had to come up with
strategy on how to spend out the available time. First, we had to come up a research goal, which
would act as our guide. Secondly, figuring out where to conduct the research was our next step in
our plan. This was followed by setting ways of conducting the study then the actual study.
Lastly, after gathering data we had to make sense out of the collected research.
Conclusion
Verily it is true beyond doubts that the main aim of company to outsource is to reduce the
expenditure in its operations expenditure. As mentioned earlier, sourcing of business operations
minimizes labor costs and manufacturing process (Lacity et al., 2010). A business will not be
worthy existence if the operation costs outdo the returns given back. Outsourcing helps a
company delegate some of it minor activities to other agencies hence concentrating on the core
issues. Hence, with this kind of business strategy, working day and night become easier.
However, there are some dangers associated with; outsourcing and some of these challenges are
so hard to be dealt with. It is clear when carrying out the process of outsourcing; some crucial
information can be leaked to competitors or malicious individual hence posing a great threat to
confidential business information. The gaps existing in the literature are that there are no
interventions put into place to deal with issues arising from outsourcing in business.

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Bibliography
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in business process outsourcing: an exploratory study. European Journal of Information Systems,
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Böhm, M., Leimeister, S., Riedl, C. and Krcmar, H., 2011. Cloud Computing–Outsourcing 2.0 or
a new business model for IT provisioning?.Application management, pp.31-56.
Bustinza, O.F., Arias-Aranda, D. and Gutierrez-Gutierrez, L., 2010. Outsourcing, competitive
capabilities, and performance: an empirical study in service firms. International Journal of
Production Economics, 126(2), pp.276-288.
Carnahan, S. and Somaya, D., 2013. Alumni effects and relational advantage: the impact on
outsourcing when a buyer hires employees from a supplier's competitors. Academy of
Management Journal, 56(6), pp.1578-1600
Javalgi, R.R.G., Gross, A.C., Benoy Joseph, W. and Granot, E., 2011.Assessing competitive
advantage of emerging markets in knowledge intensive business services. Journal of Business &
Industrial Marketing, 26(3), pp.171-180.
Lacity, M. and Willcocks, L., 2012.Outsourcing business and IT services the evidence of
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Lacity, M.C. and Willcocks, L.P., 2013. Outsourcing business processes for innovation. MIT
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