Outsourcing in Organizations: Advantages and Disadvantages - A Case Study of IBM

This report discusses the advantages and disadvantages of outsourcing in organizations, with a case study of IBM. It covers the literature review, research questions, research design and methodology, expected outcomes, and limitations.

Assignment 2
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Contents
Introduction................................................................................................................................4
Project objective.........................................................................................................................4
Project scope..............................................................................................................................4
Literature review........................................................................................................................5
Justification................................................................................................................................6
Research question.......................................................................................................................7
Primary research questions.....................................................................................................7
Secondary research questions.................................................................................................7
Research design and methodology.............................................................................................7
Qualitative research................................................................................................................7
Quantitative research..............................................................................................................7
Sample size.............................................................................................................................8
Sampling.................................................................................................................................8
Variables.................................................................................................................................8
Data collection........................................................................................................................8
Data analysis...........................................................................................................................9
Expected outcomes/conclusion..............................................................................................9
Reliability and validity...........................................................................................................9
Research limitation...............................................................................................................10
Time plan.................................................................................................................................10

Reference..................................................................................................................................11
Introduction
The process of outsourcing these days considered as most common operation where
contacting out business activities and procedure to third party companies. Th advantages of
outsourcing can be major and it covers elements like cost saving and effectiveness of gains to
major competitive gains. On the contrary, there is loss of control over many outsourced
activities is usually a potential or major business challenge. One must focus closely on the
benefits and drawbacks of outsourcing before determining to contact out any operation or
business activity (Alwasel et al., 2017).
Project objective
The main focus is on the whole discussion where one can analyse where the objectives is to
aim on the gain and drawbacks of outsourcing associated to company like IBM. The function
of outsourcing of the operations takes place, one has to see that there are main benefits and
drawbacks associated with it (Clark and Urwin, 2017). As a part of literature review, the
report will aim on concept of outsourcing and its role in organization.
Project scope
The concept of outsourcing is based on allocating a particular business function to a specialist
external service organization. There are times, when a company cannot deal with all features
of business procedure internally. In addition, some procedure is temporary as well as the
company never intend to recruit in-house professionals to work in tasks (Falkenbach et al.,
2016). When any function is outsourced to other companies, one must take accountability of
carrying out the functions and also maintaining the assets of the company. But, before
outsourcing any elements of the business to a third-party vendor, it is important to gain clarity

on benefits and drawbacks of outsourcing. At the same time, the process of outsourcing
shows a range of advantages of the company, it can also pose challenges if not rightly
outsourced to the right kind of service providers.
Literature review
Advantages
There are number of factors associated why any organization may opt for outsourcing a
specific task, job or a procedure. For instance, some of identified advantages of outsourcing
consist of many benefits discussed below:
1. Improved level of attention on core business functions: the concept of outsourcing can
free up of the organization to pay attention on its current strengths, permitting the
workforce to focus on the main tasks as well as on the upcoming strategy (Modibbo et
al., 2018).
2. Increased level of effectiveness: the process of outsourcing can free up the business
that is specialize in the procedure or service that want them to carry out for
organizations can assist companies to accomplish a highly productive, effective
service, usually of higher quality.
3. Highly controlled costs: cost saving can be accomplished by outsourcing function that
can assist people in releasing capital for purposes of investment in other activities of
the business.
4. Increase in overall reach: the function of outsourcing can provide high access to
capacities and facilities otherwise not affordable as well as accessible.
5. Great competitive gain: the process of outsourcing can assist people leverage skills or
knowledge along with finished supply chain.

6. The process of outsourcing can also assist to make the business highly flexible as well
as agile to adapt to transforming marketing issues and conditions, while giving cost
savings and service phase improvements (Palm, 2016).
Disadvantages
The function outsourcing consists of dealing with direct level control on business activities or
procedure to a third party. Following are some of problems while implementing outsourcing:
1. Service delivery: the process can fall behind time or sometime far below expectations.
2. Security and confidentiality of the company can also be at risk and can be a biggest
challenge for the company.
3. Flexibility issues: outsourcing contract can sometimes prove to be very rigid in order
to help or accommodate transformation (Palm, 2016).
4. Management challenges: transformations at the outsourcing organization can lead to
some kind of friction.
5. Instable condition: the process of outsourcing taken up by organization can go out of
organizations.
Justification
The process of outsourcing when conducted offshore, at the same time higher cost effective,
can show additional issues like hidden costs of provider select or handover, many and cost-
based layoffs of domestic workforce who will not be completely relocated globally.
Sometimes, simple management of the offshore association can prove so many issues
because of time zones, so many languages or preferences of culture. A company like IBM
over the years have accomplished a competitive gain when comparison is made along with
competition (Schniederjans et al., 2015). The competitive gain can be attained by the

organization when operations are outsourced to the third party. The impact can also be seen
on the whole consumer service and also all the resources in association with decision that are
determined. Such organizations mainly aim on right kind of analysis by many scientists over
fifty-six competitors and also many customers of the company. The scientist further state that
there must be right association when the outsourcing of so many services is finished as it
focuses on bringing improvisation in the operations.
Research question
Primary research questions
1. What are the advantages and disadvantages of outsourcing in organization?
Secondary research questions
1. What is the impact of outsourcing?
2. What are the various functions that can be outsourced for the company?
3. Are their any variations in terms of quality while adopting outsourcing activities?
4. What are different ways in which outsourcing can be used for the company?
Research design and methodology
Qualitative research
This kind of research will thus be used with the help of detailed questionnaire that will have
many open ended and closed ended queries. This is why, the concurrent triangulation-based
research principle will be utilised like that the qualitative and quantitative data collected will
be evaluated differently however interpreted collectively (Vaxevanou and Konstantopoulos,
2015).
Quantitative research
For the quantitative research along well, structured interviews will be performed to the
similar number of candidates on phone and face to face. This will make sure that every

interview will have the similar kind of questions. In addition, comparison between many
kinds of respondents will be comfortably made related on the aggregated of the obtained
solutions (Vaxevanou and Konstantopoulos, 2015).
Sample size
After recognizing the population, it is crucial for the authors to clearly draw a sample from
the current population. The current sample shows population being evaluated and therefore,
the findings of the current sample population can be rightly interpreted on to show the study
population.
Sampling
The study will cover random yet simple sampling methods that will be utilised to interview
many candidates, answer the research queries and evaluate the current hypothesis. The
current study will be based on the main concept to decide the efficiency of the data collection
techniques before the main survey (Wachira et al., 2016).
Variables
The elements in the current research will be categorized as dependent as well as independent.
The dependent elements will consist of age, gender and many other elements of the
respondents. The independent elements will consist of the nature of business, at the same
time they also utilise the standard processes of outsourcing and level of efficiency.
Data collection
The candidates here will be asked to submit the filled questionnaires back to author after in
few times. The answers receiving from the survey and interviews will be entered in Microsoft
Excel and coded as correct. The data will then be exported with data analysis software,
analysing as well as data is presented usage descriptive statistics like means and many other
techniques (Wachira et al., 2016).

Data analysis
The answers achieved from the survey will be recorded electronically. The data will then be
transferred in Microsoft Excel as well as code in right manner. The information will then be
exported into various version of SPSS with data analysis software and presented data with a
usage in descriptive based statistics like means and other tools (Wallo and Kock, 2018). In
addition, multilinear model of regression will be utilised to find the efficiency of outsourcing
in companies.
Expected outcomes/conclusion
The procedure of outsourcing contains international and regional contract and also consist of
shifting the business procedure. The process of outsourcing is focussed on different practices
that assist in management of the control of the public sector along with private companies. it
is a business activity where all the parties are recruited externally of the organization so that
all the services and functions can be finished in right manner (Wallo and Kock, 2018). This is
a methodology that assist the organization to accomplish growth in the current competitive
market. It must be analysed that the process of outsourcing is finished on the regional and one
of the global platforms so that business functions can be properly managed.
Reliability and validity
The usage of mixed methodologies in research is related with threats to reliability and
validity of the outcome accomplished. For the primary information an evaluation for validity
and reliability will be performed to find out to understand whether similar outcome can be
reproducible (Wallo and Kock, 2018). But, in case of secondary data, there is no requirement
to carry the evaluation since the data will have already published as well as signed as passed
in the process of outsourcing.

Research limitation
The research however will need more resources to collect ample data to provide answer the
set-out research queries. At the same time, many sources of data will be utilised to be
confident with varied research findings, which most likely cover many sources of data which
will be used or portrayed as it might not be highly collaborative by nature and therefore one
could be an option of discrepancy of outcomes (Wallo and Kock, 2018). There are number of
respondents who will base their outcome as there are those who have important business
organizations. Because some of the candidates will be out of reach will be sent to many
candidates where people might be possibility of bias as per the ability to read or write or in
some cases use internet-based service.
Time plan
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 1: Time Schedule

Reference
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Services in Higher Education in Saudi Arabia. In Design Solutions for User-Centric
Information Systems (pp. 124-136). IGI Global.
Clark, G. and Urwin, R., 2017. The Outsourced Chief Investment Officer Model of
Management and the Principal–Agent Problem.
Falkenbach, H., Jylha, T., Levy, D., McAllister, P. and Remoy, H., 2016. Outsourcing
Property Management? A Comparative Study (No. eres2016_149). European Real Estate
Society (ERES).
Modibbo, U.M., Danladi, Y., Abubakar, F., Mohammed, I.M., Dauda, Y.M., Sani, F. and
Adamu, J.J., 2018. OUTSOURCING LIBRARY SERVICES FOR EFFECTIVE LIBRARY
MANAGEMENT. GLOBAL JOURNAL OF APPLIED, MANAGEMENT AND SOCIAL
SCIENCES, 15.
Palm, P., 2016. Information for decision-making in in-house and outsourced real estate
management organisations. Facilities, 34(13/14), pp.891-905.
Schniederjans, M.J., Schniederjans, A.M. and Schniederjans, D.G., 2015. Outsourcing and
insourcing in an international context. Routledge.
Vaxevanou, A. and Konstantopoulos, N., 2015. Basic principles the philosophy of
outsourcing. Procedia-Social and Behavioral Sciences, 175, pp.567-571.
Vaxevanou, A. and Konstantopoulos, N., 2015. Models referring to outsourcing
theory. Procedia-Social and Behavioral Sciences, 175, pp.572-578.
Wachira, W., Brookes, M. and Haines, R., 2016. Viewing the impact of outsourcing from a
Kenyan perspective. Asian Journal of Management Science and Economics Vol, 3(1).

Wallo, A. and Kock, H., 2018. HR outsourcing in small and medium-sized enterprises:
Exploring the role of human resource intermediaries. Personnel Review.
Appendix