Outsourcing in Modern Organisations

This article explores the impact of cultural differences on IT outsourcing and the critical challenges faced in managing offshore software development outsourcing contracts. It also discusses the benefits and risks of outsourcing in contemporary organizations.

Running head: OUTSOURCING IN MODERN ORGANISATIONS
Outsourcing in Modern Organisations
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1OUTSOURCING IN MODERN ORGANISATIONS
Article 1:
Gurung, A., & Prater, E. (2017). A research framework for the impact of cultural
differences on IT outsourcing. In Global sourcing of services: strategies, issues
and challenges (pp. 49-82).
This article by Gurung and Prater (2017) have addressed the oversight of the impacts
of culture differences on the IT outsourcing as well as the virtual teams. The authors have
also highlighted the extent of success achieved by the outsourcing in the modern day business
as well as the disadvantages it has laid on the contemporary organisations. The framework
provided by these authors in this article also include the concept of psychic distance in order
to gain a better understanding of the phenomenon of virtual teams and the success of
outsourcing. It is to note that this framework has contributed to a significant extent to the
recognition of virtual software teams that are operating in dynamic business environment of
the national boundaries, the individual preferences and the organisational practices that are
affected by the elements of trust, experience and cultural affinity.
Article 2:
Khan, S. U., & Khan, A. W. (2017). Critical challenges in managing offshore software
development outsourcing contract from vendors' perspectives. IET
Software, 11(1), 1-11.
Khan and Khan (2017) in this article have highlighted the critical challenges that the
vendors face in organisations in the process of execution and management of the OSDO
(Offshore software development outsourcing) contracts. With the same, they have also
analysed all the identified challenged on the basis of the variables like organisational size,
time and year. Lack of project management, poor monitoring system, failure in managing the
end-user expectations, unforeseen contingencies, lacking in the outsourcing relationship

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management, non-competitive product and service pricing, regulatory and IPR issues and
lack of negotiation strategies are some of the significant challenges faced by the vendors in
the different IT firms in contemporary world during managing the offshore software
development outsourcing contract. Moreover, Dinu (2015) in this context have also added to
this list claiming that inadequate specification and plan of outsourcing along with high
turnover of the vendor employees in the IT firms are also negative impacts of the OSDO
contracts.
Article 3:
Solli-Sæther, H., & Gottschalk, P. (2015). Stages-of-growth in outsourcing, offshoring
and backsourcing: back to the future?. Journal of Computer Information
Systems, 55(2), 88-94.
In this paper, Solli-Saether and Gottschalk (2015) have identified the different steps in
the IT companies. They include the in-house staff functions, the offshored function, the in-
house service function, the outsourced function as well as the back-sourced function.
However, it is to note that the author of this article have claimed that the growth in
outsourcing, off-sourcing and back-sourcing do influence the growth and development of the
entire organisation in positive way. They help in improving the competitive advantage of a
company and there are several firms that have decided for outsourcing some or the other IT
functions like the production, software development and maintenance for the highly skilled
external vendors (Solli-Saether & Gotttschalk, 2015). Furthermore, it is also to mention that
the different stages of growth model indicates a path for the evolution of the in-house
functions of the company by means of outsourcing and off sourcing functions.
Article 4:

3OUTSOURCING IN MODERN ORGANISATIONS
Murthy, D. N. P., Karim, M. R., & Ahmadi, A. (2015). Data management in
maintenance outsourcing. Reliability Engineering & System Safety, 142, 100-110.
This article by Murthy, Karim and Ahmadi (2015) have developed a framework for
the data management when the maintenance is outsourced. There is an increasing trend
towards the process of outsourcing of maintenance and the data collection problems are also
not addressed properly in many of the recent maintenance service contracts. These authors
have highlighted the advantage of maintenance outsourcing in businesses today. It support for
the specialised actuators and valves. It promotes the partnerships among the customers and
vendors and at the same time, reduces the costs of MRO (Maintenance, Repair and
Operation) for increasing their assets and return. With the same, maintenance outsourcing
also helps in effective asset management. As per the authors, it paves the way for effective
and better decision making and finally, helps in reducing the costs of MRO (Murthy, Karim
& Ahmadi, 2015).
Article 5:
Modibbo, U. M., Danladi, Y., Abubakar, F., Mohammed, I. M., Dauda, Y. M., Sani, F.,
& Adamu, J. J. (2018). OUTSOURCING LIBRARY SERVICES FOR
EFFECTIVE LIBRARY MANAGEMENT. GLOBAL JOURNAL OF APPLIED,
MANAGEMENT AND SOCIAL SCIENCES, 15.
As per Modibbo et al. (2018), outsourcing plays a very important role in the lower
cost models of the service delivery. As per the authors, decision to outsource is significantly
strategic in nature for most of the libraries due to the fact that it involves the weighing of the
potential associated cost saving against the outcomes of the loss in control over a particular
product or service. It helps buying skilled manpower at lower rates and improving efficiency
in a company. At the same time, it has also helped several libraries in contemporary world in

4OUTSOURCING IN MODERN ORGANISATIONS
increasing the productivity of in less time and reducing the cost of training and operating.
Furthermore, the information professionals and the Libraries can concentrate on the key
activities because of outsourcing the library services. However, the author have also
presented some criteria in order to select the outsource vendors and they are done on the basis
of reasonable cost, quality assurance control terms and exposure to the advanced skills and
technologies.
Article 6:
Ardagna, C. A., Ceravolo, P., & Damiani, E. (2016, December). Big data analytics as-a-
service: Issues and challenges. In 2016 IEEE International Conference on Big
Data (Big Data) (pp. 3638-3644). IEEE.
In this article, the various issues and challenges laid forwards by the big data analytics
have been assessed. As per the article, the level of complexity today and the shortage of
standardisation of the management of Big Data architectures showcase a significant barrier
towards the acceptance, adoption as well as the execution of the analytics, particularly for the
big organisations. With the same, the small and medium scale organisations are also not
including ample amount of knowledge and competencies (Ardagna, Cervolo & Damiani,
2016). Notwithstanding these facts, it is to note that this have also introduced two conflicting
needs that are required to be reconciled for unleashing the full potential of the companies and
they are- the requirement of combining the complex skills that are in relation to the data
analytics and outsourcing of the service as well as the system architectures and the next is of
improving the level of acceptance along with the usability of the Big Data technologies.
Article 7:
Khan, A. W., & Khan, S. U. (2015). Solutions for critical challenges in offshore software
outsourcing contract. Pakistan Academy of Sciences, 52, 331-344.

5OUTSOURCING IN MODERN ORGANISATIONS
In this article Khan and Khan (2015) have highlighted the practices and solutions in
order to helps the vendors in the organisations to control and address the critical challenges
that are faced by the vendors and are imposed by outsourcing of the services offered by the
companies. There are several challenges vendors face in contemporary organisations
comprising of unforeseen contingencies, lacking in the outsourcing relationship management,
non-competitive product and service pricing, regulatory and IPR issues and lack of
negotiation strategies etc. As per Khan and Khan (2015), these challenges can be overcome
by practices including defining awareness regarding the culture for reducing the gap,
avoiding misunderstanding by defining negotiation policy, training and interaction of the
staffs, defining a hotline in between supplier and clients, building trust in between the parties
involved in outsourcing, and arranging the face to face meetings in between the involved
outsourcing parties.
Article 8:
Lacity, M., Khan, S., & Carmel, E. (2016). Employing US Military Families to Provide
Business Process Outsourcing Services: A Case study of Impact Sourcing and
Reshoring. CAIS, 39, 9.
Lacity, Khan and Carmel (2016) in this paper have described the advantages of
outsourcing in the contemporary organisations. They have presented a case study on how a
start-up business process outsourcing (BPO) has helped a client restore business services. The
main idea of the authors here is to present the positive impact and effect of outsourcing
services. As per the authors, there are several benefits of outsourcing starting from efficiency
gains and cost savings and both of these aid to competitive advantages of a company.
Notwithstanding this fact, the paper has also claimed that loss of control over the outsourced
function is indeed a potential business risk involving outsourcing functions but all the risks

6OUTSOURCING IN MODERN ORGANISATIONS
can be eliminated by the advantages it possess. It not only cut down the cost but also reap the
benefits of strategic outsourcing like accessing skilled expertise, reducing
overhead, flexible staffing, and increasing efficiency, reducing turnaround time and
eventually generating more profit.
Article 9:
Zhang, Y., Liu, S., Tan, J., Jiang, G., & Zhu, Q. (2018). Effects of risks on the
performance of business process outsourcing projects: The moderating roles of
knowledge management capabilities. International Journal of Project
Management, 36(4), 627-639.
As per the article, through the BPO (Business Process Outsourcing) have the potential
of reduce down the costs and to enhance the competitive advantage of the firms,
implementing BPO projects is really unsatisfactory. The authors have also conduct a research
that claims that about 50% of outsourcers believe that their outsourced business processes do
not generate additional value. With the same, many of the participants have agreed on the
point that they do not reduce the expected business operation management cost and also do
not provide special knowledge. Also, as per the article there are several risk of BPO including
the organisational environmental risk, the execution risk, the complexity risk, the vendor risk
and the contract risk (Zhang et al., 2018). The study have also presented different measures in
order to address those risks. However, it indicates that project management, technical system,
and social system risks negatively affect BPO project satisfaction.
Article 10:
Dinu, A. M. (2015). The risks and benefits of outsourcing. Knowledge Horizons.
Economics, 7(2), 103.

7OUTSOURCING IN MODERN ORGANISATIONS
This article by Dinu (2015) have highlighted both the risks and benefits of the
outsourcing service in the contemporary business. The author of this article have claimed that
the companies that choose to opt for outsourcing service need to consider the advantages and
the risks very wisely and that, they need to take necessary measures for mitigating the related
risks and for organising their personnel regarding the advantages of outsourcing. Along with
describing different strategies for mitigating the risks, the article has also answered some
significant questions like why firms chose to outsource their business process and in what
potential outcomes they desire for. Also, they have mentioned that the choice of outsourcing
is so risky and complicated due to the fact that there is an increased regulatory inquiry of the
relationships of the companies with their service providers. According to Dinu (2015),
practicing protections while finalizing the outsourcing arrangement, learning from past
failures and selecting an established and experienced service supplier for making the
outsourcing project profitable for the organisation.

8OUTSOURCING IN MODERN ORGANISATIONS
References:
Ardagna, C. A., Ceravolo, P., & Damiani, E. (2016, December). Big data analytics as-a-
service: Issues and challenges. In 2016 IEEE International Conference on Big Data
(Big Data) (pp. 3638-3644). IEEE.
Dinu, A. M. (2015). The risks and benefits of outsourcing. Knowledge Horizons.
Economics, 7(2), 103.
Gurung, A., & Prater, E. (2017). A research framework for the impact of cultural differences
on IT outsourcing. In Global sourcing of services: strategies, issues and
challenges (pp. 49-82).
Khan, A. W., & Khan, S. U. (2015). Solutions for critical challenges in offshore software
outsourcing contract. Pakistan Academy of Sciences, 52, 331-344.
Khan, S. U., & Khan, A. W. (2017). Critical challenges in managing offshore software
development outsourcing contract from vendors' perspectives. IET Software, 11(1), 1-
11.
Lacity, M., Khan, S., & Carmel, E. (2016). Employing US Military Families to Provide
Business Process Outsourcing Services: A Case study of Impact Sourcing and
Reshoring. CAIS, 39, 9.
Modibbo, U. M., Danladi, Y., Abubakar, F., Mohammed, I. M., Dauda, Y. M., Sani, F., &
Adamu, J. J. (2018). OUTSOURCING LIBRARY SERVICES FOR EFFECTIVE
LIBRARY MANAGEMENT. GLOBAL JOURNAL OF APPLIED, MANAGEMENT
AND SOCIAL SCIENCES, 15.
Murthy, D. N. P., Karim, M. R., & Ahmadi, A. (2015). Data management in maintenance
outsourcing. Reliability Engineering & System Safety, 142, 100-110.

9OUTSOURCING IN MODERN ORGANISATIONS
Solli-Sæther, H., & Gottschalk, P. (2015). Stages-of-growth in outsourcing, offshoring and
backsourcing: back to the future?. Journal of Computer Information Systems, 55(2),
88-94.
Zhang, Y., Liu, S., Tan, J., Jiang, G., & Zhu, Q. (2018). Effects of risks on the performance
of business process outsourcing projects: The moderating roles of knowledge
management capabilities. International Journal of Project Management, 36(4), 627-
639.