Outsourcing Impact on NAB Performance

This assignment analyzes the impact of outsourcing business functionalities on the performance level of National Australia Bank (NAB). It explores how BPO can potentially minimize costs and enhance project quality through expert knowledge, while acknowledging the risks associated with reduced managerial control. The analysis draws upon various research studies to understand the complexities of outsourcing in a banking context.

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 Functions...........................................................................4
4.2 Advantage of Outsourcing Business Function......................................................................5
4.3 Disadvantage of Outsourcing Business Functions................................................................6
4.4 Proper Ways of Outsourcing Business Functionalities.........................................................7
4.5 Gap Opportunities..................................................................................................................7
4.6 Hypotheses.............................................................................................................................7
5.0 Research Questions....................................................................................................................8
5.1 Primary Question...................................................................................................................8
5.2 Secondary Questions.............................................................................................................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 Validity and Reliability..........................................................................9
6.1.3 Method of Data Collection...........................................................................................10

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6.1.4 Sampling and Sample Size...........................................................................................10
6.1.5 Specification of Variable..............................................................................................10
6.2 Quantitative Research..........................................................................................................11
6.2.1 Quantitative Research Design Process.........................................................................11
6.2.2 Research Instrument.....................................................................................................11
6.2.3 Sample Size and Sampling...........................................................................................12
6.2.4 Data Analysis................................................................................................................12
6.2.5 Questionnaire Design....................................................................................................12
6.2.6 Reliability and Validity.................................................................................................13
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 process refers to the practice of subcontracting some parts of
business process of an organization to third party service provider. Outsourcing is performed for
freeing up some valuable time and resources towards concentrating on core business activities
(Butler and Callahan 2014). The most frequent outsourcing business responsibilities are like
payroll, human resources, accounting, customer service, information technology and lots more.
Over the few decades, various reputed business organizations have adopted the practice of
outsourcing business functions instead for making partnership with other companies and sharing
profits with them. Outsourcing business process actually enhances the quality of the products and
services with the specialized equipment and talents of outsourcing companies. However, the
parent companies can have lack of direct managerial control on the outsourcing companies,
which can often hamper the standard of the products and services.
This research proposal will focus on both the advantage and disadvantage of
outsourcing business functions on business performance. In order to conduct the research
study specifically, the research study will select NAB (National Australia Bank) for gathering
specific information about the research topic. The research proposal will frame effective research
question and apply appropriate research methodology for collecting effective research
information.
1.1 Problem Statement
Outsourcing business process facilitates in reducing the organizational cost through
outsourcing business activities in the countries having low wage rate of employees. It can also
enhance the quality of the organizational project through specific talent and equipment of the

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outsourcing organizations. However, over the few years, NAB is facing the issues with the
security level and managerial control in the business process outsourcing (BPO) (Runar
Edvardsson and Durst 2014).
2.0 Project Objective
 To be aware of the benefits of performing outsourcing business functions in NAB
 To be aware of the limitations of performing outsourcing business functions in NAB
 To propose best ways of performing outsourcing business functions in NAB
3.0 Project Scope
This research proposal will measure the advantage of outsourcing business functionalities
on organizational growth. The proposal will also examine the limitations of business process
outsourcing on the performance level of the organizations. Apart from that, the research proposal
will provide the best way for performing outsourcing business functions.
4.0 Literature Review
4.1 Inclination in Outsourcing Business Functions
The BPO trend in Australia is expected to grow over next 5 years, as the organizations
are inclined towards offshore locations for seeking new business opportunities. According to
Han and Mithas (2013), the business process outsourcing functions of Australia organizations
have been estimated for an amount of $4.6-Billion. With the proliferation of automation in
information technology, BPO has become a growing trend in Australia. Most of the Australian
organizations are more likely to outsource their business function in India and China for taking
the advantage of flexible labour market and low cost production.

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Figure: Outsourcing Trends in Different Industries
(Source: Solli-Sæther and Gottschalk 2015)
4.2 Advantage of Outsourcing Business Function
Outsourcing Business Function seems to have most obvious benefits on business
performance in terms of cost advantage. Teo and Bhattacherjee (2014) pointed out that
organizations can effectively outsource their business functions to such countries, where the
wage rate of the employees is less. It can actually save the overall organizational cost. On the
other hand, Lu, Meng and Goh (2014) opined that organizations can outsource their business
responsibilities to such vendors, who are actually specialized and expert in the specific fields.
Therefore, the parent organizations can have wide access to skill labor for their specific projects.
On the other hand, outsourcing vendors are best equipped with expert knowledge and
equipments, which enhance the quality of projects. Furthermore, outsourcing vendors often share
the risk of failed projects, which can minimize the impact of loss on the parent organizations.

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Johnson, Wilding and Robson (2014) pointed out that BPO allows an organization
towards freeing up some valuable time and resources for concentrating on their core business
values. In this way, the parent organizations can better develop innovation in their business
through concentrating on their research and development areas. Apart from that, outsourcing
business functions can also provide the advantage of different time horizon in offshore
outsourcing, where the parent organizations can get delivery of their projects quite before the
deadline without any delay.
4.3 Disadvantage of Outsourcing Business Functions
In outsourcing process, managerial control of the business activities mostly belongs to the
outsourcing companies. Hence, the parent organizations face lack of managerial control over the
outsourced business functions. In such situation, the outsourcing companies are not driven by the
same standard of parent companies, which can lead to deviation of standard of the project from
the actually set standard of the parent companies. Marshall et al. (2015) opined that BPO has
some legal procedures associated with it, which can enhance the overall cost of the organization.
Apart from that, there are also some hidden costs in BPO process. The outsourcing companies
demand additional change in case of any changes in the project requirement, which leads to
additional organizational cost. Furthermore, Gerbl et al. (2015) pointed out that outsourcing
business functionalities have also security risks, which can hamper the business performance of
the parent organizations. Moreover, the parent organizations often need to share vital information
with the outsourcing companies. In such situation, the parent companies can face the security
risks, if the outsourcing companies misuse that information.

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4.4 Proper Ways of Outsourcing Business Functionalities
Outsourcing business functions can really be helpful for enhancing business performance,
if it is handled properly. The parent organizations should properly select the outsourcing vendors
based on the specific business requirement for avoiding any risks. Apart from that, the parent
organizations should ensure that outsourcing organizations have proper understanding of the
business objectives (Chou, Techatassanasoontorn and Hung 2015). It will ensure that the
outsourcing companies will prepare the project as per the standards of the parent organizations.
Furthermore, the parent organizations should frequently communicate with the outsourcing
companies for tracking their performance level.
4.5 Gap Opportunities
The literature review of this research study can have lack of authenticity, as there is
limited access to huge secondary sources. However, such gaps can be effectively bridged
through adequate access to secondary sources.
4.6 Hypotheses
H0: NAB can have great advantage through business process outsourcing
H1: NAB can have great advantage through business process outsourcing

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5.0 Research Questions
5.1 Primary Question
 What are benefits and limitations associated with outsourcing business activities in
relation to business performance of NAB?
This research question will present most important information about the research topic.
This research question will primarily focus on the main benefits and challenges of outsourcing
business functions.
5.2 Secondary Questions
 How business process outsourcing influence on the business performance o NAB?
This research question will majorly focus on the impact of business process outsourcing
on the business process NAB. Moreover, this research question will evaluate the profit and loss
associated with the outsourcing business functions on the business performance of NAB.
 How outsourcing business functions can effectively be used in NAB?
Evaluation of this research question will actually mitigate the issues of the research study.
Moreover, this research study will provide best ways of handling BPO.

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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: Tuohy et al. 2013)
6.1.2 Approaches to Validity and Reliability
Validation is the process, which examines the accuracy level of the data collected from
the respondents. The validation process encompasses complete experimental concept and
compare the research outcome with the standard requirement of the scientific method of research
(Roberts 2013). Statistical method will be used in this research study for assessing the validity of
the collected qualitative data. On the other hand, reliability measures the consistency of the
GeneralResearchQuestionsSelectionofRelevantSubjectCollectionofRelevantDataInterpretDataTheoreticalFrameworkWriteUpFindings

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collected data collected from the respondent. Moreover, reliability actually measures the
repeatability of the research outcome. This research study will use “Inter method reliability
approach” for assessing the reliability of the collected data.
6.1.3 Method of Data Collection
Method of data collection is considered to be the most significant activity in any research
study. It can provide most significant and relevant information regarding the topic of the
research. In this research, interview session will be chosen for collecting effective qualitative
data regarding the research topic. Moreover, the managers of NAB will be interviewed
effectively for gathering authentic research information about their business process outsourcing.
6.1.4 Sampling and Sample Size
In order to conduct qualitative research, this research study will select 3 managers of
NAB. The core organizational specific information gathered from managers will enhance the
quality of the research outcome. Furthermore, simple random sampling method will be selected
for gathering the respondents at their preferred location.
6.1.5 Specification of Variable
Independent Variable Outsourcing Business Functions
Dependent Variable Performance Level of Business
Table 1: Variable Specification
(Source: Created by Author)

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6.2 Quantitative Research
6.2.1 Quantitative Research Design Process
Figure 3: Quantitative Research Design Process
(Source: Choy 2014)
6.2.2 Research Instrument
Research instrument is an extremely important component, which collects useful and
authentic information about the topic of the research (Tuohy et al. 2013). In this research stud,
survey method will be chosen for collecting accurate quantitative information about the research
topic. In survey method, effective set of survey questionnaires will be frames and these
questionnaires will be shared out with the selected respondents of the research study. In case of
this research, the research questionnaires will be circulated among the employees of NAB.
TheoryHypothesis/ResearchQuestionsResearchDesignDeviseMeasuresofConceptSelectRespondentsDataCollectionDataPreparationAnalysisandInterpretationDrawingConclusionReportWriting

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Moreover, these employees will be allowed to respond to these questionnaires completely from
their own views.
6.2.3 Sample Size and Sampling
In case of survey method, 50 employees from NAB will be chosen for collecting
information about the advantages and disadvantages about the BPO on the business process. The
respondents will be assembled through simple random sampling method, which collect the
respondents at their desired location.
6.2.4 Data Analysis
Data analysis is the most significant method for assessing the accurate value and meaning
of the collected data (Choy 2014). Therefore, it facilitates in enhancing the quality of the
research outcome. Statistical method will be applies for analyzing the quantitative data. In this
statistical method, the measures like mean, median, mode and standard deviation will be applied
for assessing the accurate meaning of the collected data. In this way, the extraction of right
meaning and evaluating of those meanings of the collected data will improve the value of the
research outcome.
6.2.5 Questionnaire Design
Closed ended questions will be used for the questionnaires used in the survey method. On
the other hand, open ended questions will be used for conducting interview session, which will
be detailed information concerning the research topic.

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6.2.6 Reliability and Validity
Statistical measures will be applied for evaluating the validity of the collected data. On
the other hand, Inter method reliability approach will be applied for measuring the consistency of
the collected data.
7.0 Research Limitation
Any limitation in the research study can have huge impact on the outcome of the research
study. Due to time limitation, it may not be possible to access more numbers of respondents for
collecting huge information. It can actually hamper the quality of the research outcome. On the
other hand, it may not also possible to access wide secondary sources due to budget limitation,
which can also have major impact on research outcome.
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:)

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9.0 Conclusion (Expected Outcome)
In conclusion, it can be said that outsourcing business responsibilities can have both
optimistic and pessimistic impact on the business performance of an organization. From the
secondary sources of the literature review, it can be known than BPO actually minimizes overall
organizational cost and improve the quality of the projects with expert knowledge. However,
lack of direct managerial control can sometimes hamper the project quality. Hence, it is expected
the outsourcing business functionalities will have both positive as well as negative impact on the
performance level of business on NAB.

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Reference List
Butler, M.G. and Callahan, C.M., 2014. Human resource outsourcing: Market and operating
performance effects of administrative HR functions. Journal of Business Research, 67(2),
pp.218-224.
Chou, S.W., Techatassanasoontorn, A.A. and Hung, I.H., 2015. Understanding commitment in
business process outsourcing relationships. Information & Management, 52(1), pp.30-43.
Choy, L.T., 2014. The strengths and weaknesses of research methodology: Comparison and
complimentary between qualitative and quantitative approaches. IOSR Journal of Humanities
and Social Science, 19(4), pp.99-104.
Gerbl, M., McIvor, R., Loane, S. and Humphreys, P., 2015. A multi-theory approach to
understanding the business process outsourcing decision. Journal of World Business, 50(3),
pp.505-518.
Han, K. and Mithas, S., 2013. Information technology outsourcing and non-IT operating costs:
An empirical investigation. Mis Quarterly, 37(1).
Johnson, G., Wilding, P. and Robson, A., 2014. Can outsourcing recruitment deliver
satisfaction? A hiring manager perspective. Personnel review, 43(2), pp.303-326.
Lu, Q., Meng, F. and Goh, M., 2014. Choice of supply chain governance: Self-managing or
outsourcing?. International journal of production economics, 154, pp.32-38.

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Marshall, D., Ambrose, E., McIvor, R. and Lamming, R., 2015. Self-interest or the greater good:
How political and rational dynamics influence the outsourcing process. International Journal of
Operations & Production Management, 35(4), pp.547-576.
Roberts, T., 2013. Understanding the research methodology of interpretative phenomenological
analysis. British Journal of Midwifery, 21(3).
Runar Edvardsson, I. and Durst, S., 2014. Outsourcing of knowledge processes: a literature
review. Journal of Knowledge Management, 18(4), pp.795-811.
Solli-Sæther, H. and Gottschalk, P., 2015. Stages-of-growth in outsourcing, offshoring and
backsourcing: back to the future?. Journal of Computer Information Systems, 55(2), pp.88-94.
Teo, T.S. and Bhattacherjee, A., 2014. Knowledge transfer and utilization in IT outsourcing
partnerships: A preliminary model of antecedents and outcomes. Information &
Management, 51(2), pp.177-186.
Tuohy, D., Cooney, A., Dowling, M., Murphy, K. and Sixsmith, J., 2013. An overview of
interpretive phenomenology as a research methodology. Nurse Researcher, 20(6), pp.17-20.