Outsourcing: Success Factors and Challenges

This assignment delves into the complexities of outsourcing, examining its potential for success and inherent challenges. It analyzes key factors influencing outsourcing success, such as strong partnerships with providers, the delivery of high-quality services, and effective contractual governance mechanisms. The assignment also explores the implications of outsourcing on information security and value creation within organizations. Students are encouraged to critically evaluate various theoretical frameworks and empirical studies related to outsourcing.

Running head: BUSINESS RESEARCH
Business Research
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
1.0 Introduction................................................................................................................................3
1.1 Problem Statement.................................................................................................................3
2.0 Project Objective.......................................................................................................................4
3.0 Project Scope.............................................................................................................................4
4.0 Literature Review......................................................................................................................4
4.1 Trends in Outsourcing Business Function.............................................................................4
4.2 Advantage of Outsourcing Business Function......................................................................5
4.3 Disadvantage Outsourcing Business Function......................................................................6
4.4 Proper Ways of Outsourcing Business Functions.................................................................7
4.5 Gap Opportunities..................................................................................................................7
4.6 Hypotheses.............................................................................................................................7
5.0 Research Questions....................................................................................................................8
5.1 Primary Question...................................................................................................................8
6.0 Research Design and Methodology...........................................................................................9
6.1 Qualitative Research..............................................................................................................9
6.1.1 Process of Qualitative Research.....................................................................................9
6.1.2 Approaches to Reliability and Validity..........................................................................9
6.1.3 Data Collection Method................................................................................................10
6.1.4 Sampling and Sample Size...........................................................................................10

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6.1.5 Variable Specification..................................................................................................10
6.2 Quantitative Research..........................................................................................................11
6.2.1 Quantitative Research Design Process.........................................................................11
6.2.2 Research Instrument.....................................................................................................11
6.2.3 Sampling and Sample Size...........................................................................................12
6.2.4 Data Analysis................................................................................................................12
6.2.5 Questionnaire Design....................................................................................................12
6.2.6 Reliability and Validity.................................................................................................12
7.0 Research Limitation.................................................................................................................13
8.0 Time Schedule.........................................................................................................................13
9.0 Conclusion (Expected Outcome).............................................................................................14
Reference List................................................................................................................................15

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1.0 Introduction
Outsourcing business functions defines subcontracting some non-core business activities
and functions to third party providers and contractors. Organizations mostly outsource some
parts if their business functions like accounting, human resource, payroll, information
technology, customer service and lot more (Mukherjee, Gaur and Datta 2013). There are two
types of business process outsourcing namely offshore outsourcing and nearshore outsourcing. In
offshore outsourcing, organizations are more likely to contract for their non-core business
functions with the contractor outside of their country (Mani and Barua 2015). In nearshore
outsourcing, organizations are more likely to contract for their non-primary business functions
with the contractors within their domestic country. Outsourcing business functions facilitate the
organizations towards freeing up some time and resources, which can in turn help them to
concentrate on core business functions. However, outsourcing business function is also
associated with security risks, as the organizations require sharing some important information
with the outsourced organization.
This research proposal will be highlighting on the advantage and disadvantage of
outsourcing business function. In order to gather specific information, the research will be
conducted on Telstra and its associated outsourcing business functions. The proposal will set
effective research questions and methodologies for collecting accurate research information.
1.1 Problem Statement
Outsourcing business functions helps in reducing workloads of the employees in an
organization. It also facilitates in incorporating expert knowledge in the business process for
increased business performance. However, while assessing the outsourcing business functions of

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Telstra, it can be seen that the organization is facing lack of managerial control on their
outsourcing business functions (Steven, Dong and Corsi 2014).
2.0 Project Objective
 To identify the advantage of outsourcing business functions in Telstra
 To recognize the disadvantage of outsourcing business functions in Telstra
 To examine the best ways of outsourcing business functions
3.0 Project Scope
The scope of research proposal is to assess the trends of outsourcing business functions.
Furthermore, the proposal will also evaluate the advantage of outsourcing business functions on
Telstra. The proper will also recognize the disadvantage associated with the business process
outsourcing in Telstra.
4.0 Literature Review
4.1 Trends in Outsourcing Business Function
Australian organizations are joining the global rush of business process outsourcing. Over
the past few decades, there is an increasingly growing trend of outsourcing business process
among the Australian organizations. As per Oshri, Kotlarsky and Gerbasi (2015), Australia has
been considered as the largest market for outsourcing business functions. Moreover, the
outsourcing business functions of Australian organizations have been projected for $4.6-Billion.
Furthermore, Hsu, Liou and Chuang (2013) opined that NAB of Australia has taken decision to
outsource more IT functions to India.

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USA UK Australia
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
2010
2012
2014
Figure 1: Trends of Outsourcing Business Functions
(Source: Liu et al. 2015)
The above figure is indicating that outsourcing business functions is rapidly increasing in
Australia in comparison to United Kingdom and USA. Outsourcing business functions is mostly
seen among the manufacturing, telecommunication and accounting organizations. Furthermore,
Wiengarten, Pagell and Fynes (2013) opined that Australia organizations are more likely to
outsource their non-core business activities in India, Philippines and China.
4.2 Advantage of Outsourcing Business Function
Outsourcing business function actually leads to cost advantage for the organization. The
organizations need to pay salary to the employees of their own branch for the task, which they
outsource to the outsourcing companies. On the other hand, Abdul-Halim et al. (2014) opined
that organizations are more likely to outsource their business activities in such countries, where

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the wage rate of the employees is quite low. It can actually save organizational cost of the
organizations. Kitcher et al. (2013) opined that outsourcing organizations are highly equipped
with special expert and technical equipment. Therefore, the main organizations can get best
talent from the outsourcing companies and apply them in improving the quality of products and
service. In this way, the organizations can enhance customer satisfaction through provide unique
quality products and services. Liu et al. (2015) pointed out that business process outsourcing
facilitates the organization to frees up some time and energies towards, which they can use in
concentrating on core business functionalities. Furthermore, BPO also facilitates in gaining the
advantage of time horizon, where the organization can get delivery of their projects in exact time
from the outsourced organizations.
4.3 Disadvantage Outsourcing Business Function
Outsourcing business process is associated with some hidden cost. Cezar, Cavusoglu and
Raghunathan (2013) pointed out that the parent organizations need to pay additional charge to
the outsourcing companies, when any changes occurred in the project. On the other hand, BPO
can also lead to security risk for the parent organizations. Moreover, in BPO relationship, the
parent organizations need to share huge important information with the outsourcing companies.
In such situation, it can lead to security risk for the parent companies, if the outsourcing
companies misuse that information with a bad intention. Furthermore, Mani and Barua (2015)
opined that in BPO relationship, the parent organizational often face lack of managerial control
over the outsourcing organizations. Moreover, there is huge risk in synchronization of
deliverables between the parent organizations and outsourcing organizations, which can even
lower the quality of the products or service.

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4.4 Proper Ways of Outsourcing Business Functions
Organizations can huge benefits from the outsourcing business function, if they can
manage it in proper ways. Moreover, organizations should evaluate various business process
outsourcing companies based on their business requirement and choose the one, which suites
best for them. The parent organization should ensure that the outsourcing companies have
understood their business objectives proper. Proper documentation is also necessary for BPO for
avoiding any confusion and legal complications. Furthermore, the parent organizations should
frequently communicate with the outsourcing organizations and track the performance level of
the outsourcing companies (Oshri, Kotlarsky and Gerbasi 2015).
4.5 Gap Opportunities
The literature review may have lack of authenticity due to inadequate access to secondary
data sources. However, these gaps can be minimized in future through increasing access to wide
secondary sources. It can also minimize the gaps in the quality of the literature review.
4.6 Hypotheses
H0: Outsourcing business functions have advantages on the business performance of Telstra
H1: Outsourcing business functions have no advantages on the business performance of Telstra

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5.0 Research Questions
5.1 Primary Question
 What are the advantages and disadvantages of outsourcing business function on the
business performance of Telstra?
This research question will evaluate advantages and disadvantages of outsourcing
business function on the business performance of Telstra. Therefore, this research question will
help in getting accurate and ultimate research result.
5.1 Secondary Questions
 What is the impact of outsourcing business functions on business performance of Telstra?
This research question will evaluate the overall impact of outsourcing business functions
on the business performance of Telstra. Proper evaluation of this particular research question will
assess the profit level of Telstra through outsourcing business functions.
 What are the effective ways of outsourcing business functions?
This research question will be highly significant towards minimizing the issues in the
research study through provide effective ways for outsourcing business functions.

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6.0 Research Design and Methodology
6.1 Qualitative Research
6.1.1 Process of Qualitative Research
Figure 2: Qualitative Research Process
(Source: Farooq and O'Brien 2015)
6.1.2 Approaches to Reliability and Validity
Validation process refers to collection and analysis of collected data for assessing its
level of accuracy. It encompasses entire experimental concept and compares the research results
with all the research requirement of scientific research method (Lather and Pierre 2013). This
research study will use statistical measures for assessing validity of the qualitative data collected
from the respondents. Reliability test assesses the consistency of the collected data. It indicates
GeneralResearchQuestionsSelectionofRelevantSubjectCollectionofRelevantDataInterpretDataTheoreticalFrameworkWriteUpFindings

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the repeatability of the research findings. High degree of reliability in the collected data would
lead to same type of research findings and result over the time. Moreover, reliability is directly
related to the validity of a specific measure. Inter method reliability approach will be used in this
research study for assessing the reliability of the gathered data.
6.1.3 Data Collection Method
Data collection method is the most important activity for collecting most accurate and
relevant information regarding the research topic (Lather and Pierre 2013). In this research study,
interview method will be used for collecting qualitative information about the research topic.
Moreover, effective interview session will be arranged with the managers of Telstra for knowing
detailed and subjective information about the advantage and disadvantage of outsourcing
business functions.
6.1.4 Sampling and Sample Size
3 managers of Telstra will be selected for arranging effective interview session and
collecting core organizational specific information regarding the research topic. Furthermore,
simple random sampling method will be used for collecting qualitative data, where the
respondents will be gathered at their convenient place.
6.1.5 Variable Specification
 Independent Variable: Outsourcing Business Functions
 Dependent Variable: Business Performance

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6.2 Quantitative Research
6.2.1 Quantitative Research Design Process
Figure 3: Quantitative Research Design Process
(Source: McCusker and Gunaydin 2015)
6.2.2 Research Instrument
Research instrument is the most important component for collecting relevant information
about the topic of the research (Farooq and O'Brien 2015). This research study will use survey
method for collecting authentic quantitative information regarding the research topic. In this
survey method, survey questionnaires will be circulated among the selected respondents of the
research study. The respondents will be asked to respond to the survey questionnaires from their
own perspectives. Moreover, the survey questionnaires will be related to the advantage and
disadvantage of outsourcing business functions in Telstra.
TheoryHypothesis/ResearchQuestionsResearchDesignDeviseMeasuresofConceptSelectRespondentsDataCollectionDataPreparationAnalysisandInterpretationDrawingConclusionReportWriting

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6.2.3 Sampling and Sample Size
In order to conduct survey method, 50 employees from Telstra will be selected for
knowing about the advantage and disadvantage of outsourcing business functions in Telstra.
Moreover, the research study will use simple random sampling method for gathering useful
information, where the respondents will be assembled at their suitable location for enhancing
their participation level.
6.2.4 Data Analysis
The method of data analysis facilitates in converting the general information to specific
information for enhancing the quality of the research result (McCusker and Gunaydin 2015).
This research study will use statistical method of data analysis. In this analysis, the measures of
mean, median, mode and standard deviation will be used for extracting accurate meaning of the
collected data. Therefore, statistical method will enhance the quality of the research outcome.
6.2.5 Questionnaire Design
In case of survey questionnaires, this research study will use closed ended questions for
gathering authentic information about the research topic from the employees of Telstra. On the
other hand, in case of interview method, open ended questions will be used for collecting
detailed qualitative information from the managers of Telstra.
6.2.6 Reliability and Validity
Statistical measures will be used for assessing the validity of the collected information.
Furthermore, the consistency of the collected data will be evaluated through Inter method
reliability approach. It will measure the repeatability of the research result.

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7.0 Research Limitation
Every academic research can have some limitation, which can negatively influence the
research outcome. In case of this research study, the time limitation can limit the access of
adequate respondents, which can hamper the quality of the research information. On the other
hand, the research result of this research study can also be hampered for the budget limitation of
the research study. Moreover, the budget limitation can hamper the accessibility of more
authentic secondary sources of data, which can also have impact on the quality of the research
information.
8.0 Time Schedule
Month 1 Month 2 Month 3 Month 4 Month 5
Milestones Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Week 9 Week 10 Week 11 Week 12 Week 13 Week 14 Week 15 Week 16 Week 17 Week 18 Week 19 Week 20
Introduction
Designing problem
Designing Research objectives
Designing research structure
Literature Review
Analyzing concepts and models
Developing critical analysis
Identifying similar issues from industries
Methodology
Designing research approach
Designing research tools and techniques
Identifying secondary data collection method
Findings and Analysis
Developing themes
Interpreting data
Conclusion
Summary of research
Suitable recommendation
Figure 4: Time Schedule
(Source: Created by Author)

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9.0 Conclusion (Expected Outcome)
While concluding the study, it can be said that outsourcing business functions can have
both positive and negative impact on the performance level of an organization. From the
evidence of literature review, outsourcing business functions facilitates the organizations in
reducing organizational cost and enhancing the quality of the product and service. However,
outsourcing business functions have some hidden cost associated with it. It also has lack of
managerial control on the outsourcing companies. Therefore, it is expected that outsourcing
business functions can have both advantage and disadvantage on the business performance of
Telstra.

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Reference List
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success: leveraging on partnership and service quality. Sage Open, 4(3), p.2158244014545475.
Cezar, A., Cavusoglu, H. and Raghunathan, S., 2013. Outsourcing information security:
Contracting issues and security implications. Management Science, 60(3), pp.638-657.
Farooq, S. and O'Brien, C., 2015. An action research methodology for manufacturing technology
selection: a supply chain perspective. Production Planning & Control, 26(6), pp.467-488.
Hsu, C.C., Liou, J.J. and Chuang, Y.C., 2013. Integrating DANP and modified grey relation
theory for the selection of an outsourcing provider. Expert Systems with Applications, 40(6),
pp.2297-2304.
Kitcher, B., McCarthy, I.P., Turner, S. and Ridgway, K., 2013. Understanding the effects of
outsourcing: unpacking the total factor productivity variable. Production Planning &
Control, 24(4-5), pp.308-317.
Lather, P. and St. Pierre, E.A., 2013. Post-qualitative research. International Journal of
Qualitative Studies in Education, 26(6), pp.629-633.
Liu, C., Huo, B., Liu, S. and Zhao, X., 2015. Effect of information sharing and process
coordination on logistics outsourcing. Industrial Management & Data Systems, 115(1), pp.41-63.
Mani, D. and Barua, A., 2015. The impact of firm learning on value creation in strategic
outsourcing relationships. Journal of Management Information Systems, 32(1), pp.9-38.

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McCusker, K. and Gunaydin, S., 2015. Research using qualitative, quantitative or mixed
methods and choice based on the research. Perfusion, 30(7), pp.537-542.
Mukherjee, D., Gaur, A.S. and Datta, A., 2013. Creating value through offshore outsourcing: An
integrative framework. Journal of International Management, 19(4), pp.377-389.
Oshri, I., Kotlarsky, J. and Gerbasi, A., 2015. Strategic innovation through outsourcing: the role
of relational and contractual governance. The Journal of Strategic Information Systems, 24(3),
pp.203-216.
Steven, A.B., Dong, Y. and Corsi, T., 2014. Global sourcing and quality recalls: An empirical
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Management, 32(5), pp.241-253.
Wiengarten, F., Pagell, M. and Fynes, B., 2013. The importance of contextual factors in the
success of outsourcing contracts in the supply chain environment: the role of risk and
complementary practices. Supply Chain Management: An International Journal, 18(6), pp.630-
643.