Impact of Outsourcing Function on Business Performance of Vodafone

This research proposal is concerned with assessing the impact of outsourcing function on the business function of Vodafone. The literature review will explore the theoretical background associated with the outsourcing process. The research design and methodology includes qualitative research with internal validity approach and simple random sampling technique.

Running head: BUSINESS RESEARCH
Business Research: Assignment 2
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
1. Introduction..................................................................................................................................3
2. Project Objective.........................................................................................................................3
3. Project Scope...............................................................................................................................4
4. Literature Review........................................................................................................................4
4.1 Concept and Impact of Outsourcing Function on Business Performance.............................4
4.2 Issues in Outsourcing Function.............................................................................................6
4.3 Effective Outsourcing Strategy..............................................................................................7
4.4 Justification for Literature Problem and Gap Opportunity....................................................7
4.5 Justification of Hypothesis....................................................................................................8
5. Research Question.......................................................................................................................8
5.1 Primary Question...................................................................................................................8
5.2 Secondary Questions.............................................................................................................8
6. 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 Sampling.......................................................................................................................10
6.1.4 Sample Size..................................................................................................................10
6.1.5 Data Collection Method................................................................................................10

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6.1.6 Variable Specification..................................................................................................11
6.2 Quantitative Research..........................................................................................................11
6.2.1 Quantitative Research Design Process.........................................................................11
6.2.2 Research Instrument.....................................................................................................11
6.2.3 Quantitative Data Analysis Process..............................................................................12
6.2.4 Sampling and Simple Size............................................................................................12
6.2.5 Questionnaire Design....................................................................................................12
6.2.6 Reliability and Validity of Data....................................................................................13
7. Research Limitation...................................................................................................................13
8. Time Schedule...........................................................................................................................14
9. Conclusion.................................................................................................................................14
Reference List................................................................................................................................15

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1. Introduction
Outsourcing business function defines delegating some non-primary business functions to
other business provider. Most frequently outsourced business functions are like payroll, human
resource management, accounting, information technology, customer service and many others
(Uluskan, Joines and Godfrey 2016). Offshore outsourcing occurs, while organizations
subcontract a third party company outside of their own country. On the other hand, nearshore
outsourcing occurs, while organizations subcontract a third party organization within their
domestic country. Outsourcing business function helps the organizations to free up some of their
valuable resources and time. Hence, they can easily concentrate on their core business activities
for building up their brand in the market. Likewise, Vodafone has majorly focused on off shore
outsourcing process, where the organization has outsourced some of its business activities to
third party companies outside of its domestic country (Lahiri 2016). It has assisted the
organization to reduce its overall business cost and improve its business performance. Moreover,
outsourcing function plays an important role in enhancing organizational performance. This
research proposal is concerned with assessing the impact of outsourcing function on the business
function of Vodafone. Moreover, the research proposal will select appropriate research methods
and design for assessing right research information regarding the outsourcing of Vodafone.
2. Project Objective
 To find out the degree of outsourcing on organizational performance of Vodafone
 To recognize the challenges of outsourcing in regards to organizational performance of
Vodafone

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 To assess the influence of outsourcing in enhancing the organizational performance of
Vodafone
 To recommend successful outsourcing process to Vodafone
3. Project Scope
The scope of the project is to assess the impact of outsourcing function on the business
performance of Vodafone. The literature review will explore the theoretical background
associated with the outsourcing process. Such theoretical underpinning and empirical evidence
will boost the confidence of the organizations towards adopting outsourcing function for
increased business performance. The literature review has also huge scope of broadening the era
of outsourcing function by explaining the impact of outsourcing function on business
performance. Furthermore, the authentic information of the literature review can also provide
effective secondary information to the further researcher on the topic of outsourcing.
4. Literature Review
4.1 Concept and Impact of Outsourcing Function on Business Performance
Outsourcing function is related with subcontracting a specific function to a third party
organization. Alonso, Clifton and Díaz-Fuentes (2015) opined that global trends of globalization
have encouraged the organizations towards outsourcing some of their business functions to
specialized third party organization. This process facilitates the organizations towards freeing up
some of their values resources, which in turn help them in concentrating on their primary
business functions for leading competitive advantage. As per Perdikaki, Peng and Heim (2015),
the core competency theory of outsourcing has defined outsourcing function as collective

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knowledge of parent organization and outsourced organization towards fostering competitive
advantage to business.
Outsourced business organizations are mostly equipped with specialized expertise and
equipment for performing a certain business function. Lahiri (2016) opined that outsourced
vendors are often quite better than the parent companies in performing a certain business
function. They the vendors are equipped with specialized resources and equipments. In this way,
outsourcing business function ultimately enhanced the quality of business function leading to
improved business performance. The empirical evidence of Telstra has demonstrated high
quality technical service provided to the customers after outsourcing the technical department to
IBM. On the other hand, Gunasekaran et al. (2015) opined that outsourcing function minimizes
the necessity of hiring employees and special equipments for performing a certain business
function in house. Hence, the cost hiring employees and purchasing special equipments is
minimized to a larger extent. Furthermore, the organization can also reduced the cost of wage
provided to the employees by outsourcing the business function to a less developed country than
their domestic country. In this extent, the evidence of IINET can be highlighted, which has
outsourced its technical department to India for reducing the cost of wage for the department. On
the other hand, Vodafone has outsourced its call centre and legal processing activities to India
and Egypt (Goldschmidt and Schmieder 2017). Hence, the organization has got access to low
cost employees in those developing countries, which has ultimately reduced its overall business
cost.
Sandeep and Ravishankar (2015) stated that outsourcing function facilitates an
organization to free up their valuable time and resources. Hence, they can easily use such
valuable time and resources to the research and development department for fostering innovative

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business concept. In this way, the organizations can lead to high level of competitive advantage
in the market. According to Mani and Barua (2015), outsourcing business function can also
minimize the risk factor of the organization. Moreover, the organization outsources some of their
responsibilities to the third party organizations through outsourcing functions. Hence, the
outsourced companies properly set the risk mitigation planning for the outsourced business
function. In this way, the organizations can reduce their business risk by sharing with the
outsourced vendors. Vodafone has outsourced its IT department to IBM India for getting
expertise help from them, which has ultimately improved the quality of its information
technology and telecommunication featured provided to the customers.
4.2 Issues in Outsourcing Function
In outsourcing process, the organizations sign contract with a third party company for
getting done a specific business function from them. According to Teo and Bhattacherjee (2014),
the parent companies have to hand over some their managerial control over the outsourced
function. In such situation, the parent companies loss their managerial control over their
outsourced business function. Hence, lack of managerial control over the business function lead
to several issues in the business. On the other hand, Goldschmidt and Schmieder (2017) opined
that the outsourced vendors are not fully aware of the core business standards of the parent
companies. Hence, they may be incapable of maintaining the core standard in completing the
outsourced business function. In this way, the quality of business function may get hampered in
outsourcing function. Furthermore, Spithoven and Teirlinck (2015) opined that outsourcing
function often leads to threats of security and confidentiality for the parent companies.
Moreover, the organizations often have to share some sensitive information with the outsourced
vendor for getting the business function done by them. In such situation, the organizations may

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face threats of security, while the sensitive information is mistreated by the outsourced vendor.
In can ultimately leads to severe loss of business leading to ineffective business performance. In
case of outsourcing the IT department, Vodafone must have to transmit some significant and
sensitive organizational information to the overseas third party vendors of India and Egypt. In
such situation, the organization always faces threats of potential information security breaches.
One of the other issues of outsourcing function is negative customer perception, which
leads to ineffective business performance. According to Steven, Dong and Corsi (2014), the
subcontractors are often incapable of providing adequate information to the customers. Such
inadequate information may lead to high level of customer dissatisfaction. Likewise, the call
centre employees of Vodafone in India and Egypt have lack of detailed and core knowledge of
business information. Hence, sometimes, they fail to provide accurate information to the
customers. In this way, outsourced call centre activity ultimately leads to negative customer
perception about the business. Moreover, the outsourced vendors are not aware of all business
information regarding the parent companies. Hence, they are not capable of providing
satisfactory information to the customers on their request. In this way, outsourcing function can
also lead customer dissatisfaction leading to lower business performance.
4.3 Effective Outsourcing Strategy
The organizations should communicate with the outsourced business organization for
communicating their business goals properly. In this way, the outsourced vendors will be aware
of the core organizational standards of the parent companies. Hence, they will able to maintain
the standard of parent organization in the outsourced business function. On the other hand, the
organization should choose right outsourced vendor, which have desired skills and equipments
for perfectly completing the job. In this way, the organizations can get quality work from the

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right outsourced companies. Furthermore, the managers of the parent organizations should
restrict their sensitive business information from the outsourced vendors. It will help the
organizations to protect their sensitive business information from the mistreatment by the
outsourced vendors.
4.4 Justification for Literature Problem and Gap Opportunity
From the summary of literature review, it can be seen that there are still certain areas,
which are untouched regarding the outsourcing concept. Furthermore, there is lack of proper
empirical evidences to support the research topic. In such situation, the literature gap and
problem denotes lack of proper information, which can reduce the quality of research outcome.
However, in-depth research and empirical evidence can provide gap opportunity for the further
research in the same research area.
4.5 Justification of Hypothesis
The whole summary of literature review demonstrates the influence of outsourcing
function on business performance. The section can evaluate several influence of successful
outsourcing function on business performance. However, the literature review has also
demonstrated the issues of outsourcing function on business function. Hence, the hypothesis of
assignment 1 is justified in the literature review.
5. Research Question
5.1 Primary Question
 How outsourcing functions can influence the business performance of Vodafone?

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This question will extract the main and core information regarding the research topic.
Moreover, this question will serve the main purpose of the research by directly gathering the
information regarding the impact of outsourcing function on business performance.
5.2 Secondary Questions
 What are the challenges of outsourcing function on the business performance of
Vodafone?
This question will gather some contradicting information in the area of research. Moreover,
such information will prove the solidity of the hypothesis and research variables. Hence, the
information gathered from this question will enhance the authenticity of the research outcome.
 How Vodafone can implement successful outsourcing function towards enhancing
business performance?
This question will actually serve the problem area of the overall research. Moreover, this
question is actually targeted at mitigating the issues highlighted in the research. Hence, it will
help in contributing to the actual purpose of the research.
6. Research Design and Methodology
6.1 Qualitative Research
6.1.1 Process of Qualitative Research
1. Step 1: Identifying Research Problem
2. Step 2: Literature Review
3. Step 3: Collection of Data

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4. Step 4: Interpretation and Analysis of Data
5. Step 5: Assessing the Quality of Data
6. Step 6: Research Reporting
6.1.2 Approaches to Reliability and Validity
Reliability is the quality of the measurement procedures, which are used in collecting
data for conducting research. Moreover, a measure is considered to be reliable, while it provides
consistent result over the time (Lewis 2015). Inter rated reliability approach will be applied in the
research for evaluating the data consistency. On the other hand, validity represents the solidity
and accuracy of the research result (Choy 2014). Moreover, validity measures leads to
authenticity of the research result. This research will use internal validity approach for
measuring the accuracy of information gathered in the research. Internal validity will help in
avoiding the confounding independent variable for providing authenticity in the research
outcome.
6.1.3 Sampling
Sampling is the statistical procedure used in selecting right individual and observations
for collecting authentic information regarding the research topic (Dumay and Cai 2015). This
research will select simple random sampling technique in which each selected respondent gets
equal chance of being involved in data collection process. Moreover, in random sampling each
sample has equal probability of being chosen. On other hand, in simple random sampling
process, the sample is gathered in their convenient place for providing proper information
regarding the topic of the research.

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6.1.4 Sample Size
Sample size determines the number of individual or observations to be chosen in the
research for collecting authentic information. In this research, 5 managers of Vodafone will be
chosen for qualitative research purpose.
6.1.5 Data Collection Method
Data collection method is tremendously significant to gather the useful research
information (McCusker and Gunaydin 2015). Both primary and secondary source will be
assembled to find out effective research information. The secondary sources will be associated
with authentic journals, books and websites. However, primary data source will primarily
applied in this research. In primary method, the research will use qualitative technique for
collecting descriptive information regarding the research. Moreover, interview will be arranged
with the managers of Vodafone for collecting the core organization information regarding the
outsourcing function of the organization.
6.1.6 Variable Specification
Independent Variable: Outsourcing Function
Dependent Variable: Business Performance
6.2 Quantitative Research
6.2.1 Quantitative Research Design Process
1. Developing Research Question
2. Determine the Key Ideas
3. Selecting Research Method
4. Choosing Framework

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5. Adapting Audience
6. Research Design
7. Data Analysis
8. Research Report
6.2.2 Research Instrument
Research instruments are the methods and technique to collect relevant and useful
information regarding the research topic (Lewis 2015). The most commonly used research
instrument in primary research is survey. This research will also use survey technique to collect
most relevant information regarding the topic of the research. In survey method, structured
questionnaire sets will be arranged, which will be relevant to the research topic. Moreover, these
questionnaires will be distributed among the employees of Vodafone for collecting their opinion
regarding the impact of outsourcing on business performance.
6.2.3 Quantitative Data Analysis Process
Data analysis converts the general information of the collected data into precise
information for enhancing the quality of overall research outcome (Choy 2014). This research
will use SPSS technique for analyzing the collected data from the selected respondents. In this
technique, the research will use chi-square test for evaluating the actual meaning of the collected
data. Chi-square test assesses the fit between the observed data and those that are expected
theoretically. Moreover, the test also calculates the independence of two categorical variables for
assessing their relationship. In this way, such analysis can provide most authentic research result.

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6.2.4 Sampling and Simple Size
In quantitative research design, the research will use simple random sampling method for
providing equal probability to the selected respondents to participate in the data collection
process. Moreover, the chosen respondents will be assembled at their suitable location to proceed
with data collection. The research will select 50 employees of Vodafone for collecting useful
research information from them.
6.2.5 Questionnaire Design
Question design is the process of design the questionnaires to be distributed among the
selected respondents (McCusker and Gunaydin 2015). This research will use open end question
in designing the questionnaires to be distributed among the employees of Vodafone. In such
questionnaires, the respondents will answer the questions by saying just “yes” or “No”.
6.2.6 Reliability and Validity of Data
Reliability assesses the consistency of measures used in collection of data. The research
will use internal reliability for assessing the response collected from the selected respondents. On
the other hand, validity is used for testing the accuracy of the data collected from the selected
respondents. The research will use convergent validity for assessing accuracy of the collected by
correlating them with similar other variable.
7. Research Limitation
This research can face the limitation of time and money for gathering most authentic
information. Moreover, with lack of adequate time, it may not be possible to gather adequate
respondent to collected most accurate information. It can ultimately limit the quality of the

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collected data. On the other hand, with lack of adequate money, it may not be possible to collect
adequate secondary sources. It can ultimately limit the sources of data collection.
8. 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 1: Time Schedule
(Source: Created by Author)
9. Conclusion
In conclusion, it is evident that outsourcing function can both influence business
performance positively as well as negatively. However, outsourcing function can lead to high
level of business performance, while it is dealt with crucial manner. This function can help
organizations to get access to specialized knowledge and expertise of third party organization for
getting some of their business function done. However, threats of information security are
always associated with outsourcing process. The empirical evidence of the research proposal is

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showing positive impact of outsourcing on business performance. Hence, it is assumed that
outsourcing function will positively influence the business performance of Vodafone.
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