Impact of Outsourcing Web Development Projects on Business Performance

Running head: IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON
BUSINESS PERFORMANCE
Impact of outsourcing web development projects on business performance: Case study of
Singapore’s IT Industry
Name of the Student:
Name of the University:

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IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
Abstract
Outsourcing is such a strategic management model which transfer of business processes to other
company. It is a concept of day-to-day execution of one and more than one business functions to
be performed by the third part service provider those are insourcing of the business processes.
When the organization is outsourcing the activities, there is focus on retaining of core activities
and allow the organizations to handle of non-core activities. At the time of outsourcing, proper
organizational decisions are taken. It can improve the structure of cost along with profitability. It
helps to improve entire operational effectiveness. Outsourcing of business operations are fallen
under three categories such as increase in revenue, improvement capabilities and reduction of
cost. The study is focused on impacts of outsourcing on the organizational performance as well
as challenges into implementation of outsourcing. The businesses are mainly looking for
outsourcing of the financial and accounting functions to improve the business performance.

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IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
Acknowledgement
The research is conducted to enrich the experience of my life. The research enhances my
knowledge and skills on the selected research topic. With gaining of the knowledge, it give me
opportunity to face some challenges and overcome them. Without the guidance of my professors,
friends and family, I would not able to complete the study. They all contribute me to enhance my
knowledge on the research topic. I would also like to thank my supervisor -------------- for
providing me constant support and guidance during the entire research process. Without all their
help, I am not able to collect primary data and valuable resources. Finally, I would also like to
thank the professionals from the IT Industry who help me to participate in the survey. It also
provides us valuable results for the project work. All their support inspires and enlightens me to
go through the research process.
Heartfelt thanks and warmest wishes,
Yours Sincerely,

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IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
Table of Contents
Chapter 1: Introduction....................................................................................................................7
1.1 Introduction............................................................................................................................7
1.2 Background of the project.....................................................................................................7
1.3 Research aim and objectives..................................................................................................7
1.4 Research question..................................................................................................................7
1.5 Purpose of the research..........................................................................................................7
1.6 Overview of the research report............................................................................................8
Chapter 2: Literature Review...........................................................................................................9
2.1 Introduction............................................................................................................................9
2.2 Advantages of outsourcing in web development projects.....................................................9
2.3 Risks into IT outsourcing.....................................................................................................10
2.4 Web development projects and outsourcing issues.............................................................11
2.5 Theoretical literature review................................................................................................12
2.5.1 Strategic evaluation and outsourcing performance.......................................................13
2.5.2 Contractual completeness and outsourcing performance.............................................13
2.5.3 Relationship management and outsourcing performance.............................................14
2.6 Outsourcing practices..........................................................................................................14
2.7 Impacts on the business performance due to outsourcing...................................................15
2.8 Relationship between outsourcing and business performance into web development
projects.......................................................................................................................................17
2.9 Factors affect implementation of outsourcing in web development projects......................19
Chapter 3: Proposed Methodology................................................................................................22
3.1 Introduction..........................................................................................................................22
3.2 Research philosophy............................................................................................................22

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IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
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3.3 Research approach...............................................................................................................22
3.4 Research design...................................................................................................................23
3.5 Data collection and analysis................................................................................................24
3.5.1 Data collection methods...............................................................................................24
3.5.2 Data analysis methods..................................................................................................25
3.6 Population and sample.........................................................................................................25
3.7 Ethical considerations..........................................................................................................26
3.8 Research limitations.............................................................................................................26
3.9 Research Timeline...............................................................................................................27
3.10 Summary............................................................................................................................27
Chapter 4: Results and analysis.....................................................................................................28
4.1 Introduction..........................................................................................................................28
4.2 Quantitative analysis............................................................................................................28
4.3 Summary..............................................................................................................................47
Chapter 5: Conclusion...................................................................................................................48
5.1 Conclusion...........................................................................................................................48
5.2 Linking with objectives.......................................................................................................48
5.3 Recommendations................................................................................................................49
5.4 Further scope of the study....................................................................................................49
References......................................................................................................................................50
Appendix........................................................................................................................................55
Survey Questionnaire.................................................................................................................55

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IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
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Table of Figures
Figure 4.1: Gender of respondents.................................................................................................29
Figure 4.2: Age group....................................................................................................................30
Figure 4.3: Years working in IT industry......................................................................................30
Figure 4.4: Company engages into IT outsourcing.......................................................................31
Figure 4.5: IT activity impact on cost and revenue of organization..............................................32
Figure 4.6: Reason for outsourcing is financial advantages..........................................................33
Figure 4.7: Effect of cost driven outsourcing on organizational performance..............................34
Figure 4.8: Outsourcing reduces time taken to develop new products..........................................35
Figure 4.9: Satisfaction of customers with company’s products...................................................36
Figure 4.10: Development of new products and services for maintaining of competitiveness.....37
Figure 4.11: Outsourcing innovation is better and faster for improvement of business
performance...................................................................................................................................38
Figure 4.12: Outsourcing enables to concentrate on efforts to build and expand best world
competencies..................................................................................................................................40
Figure 4.13: Outsourcing creates flexibility in organizational structure and strategy...................41

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IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
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Table of tables
Table 4.1: Gender..........................................................................................................................29
Table 4.2: Age group of respondents.............................................................................................29
Table 4.3: Years working in IT industry.......................................................................................30
Table 4.4: Company engages into IT outsourcing.........................................................................31
Table 4.5: IT activity impact on cost and revenue of organization...............................................32
Table 4.6: Reason for outsourcing is financial advantages...........................................................33
Table 4.7: Effect of cost driven outsourcing on organizational performance...............................34
Table 4.8: Outsourcing reduces time taken to develop new products...........................................35
Table 4.9: Satisfaction of customers with company’s products....................................................36
Table 4.10: Development of new products and services for maintaining of competitiveness......37
Table 4.11: Outsourcing innovation is better and faster for improvement of business performance
.......................................................................................................................................................38
Table 4.12: Outsourcing enables to concentrate on efforts to build and expand best world
competencies..................................................................................................................................39
Table 4.13: Outsourcing creates flexibility in organizational structure and strategy....................41
Table 4.14: Summary output of regression analysis conducted for hypothesis 1.........................42
Table 4.15: ANOVA table of regression analysis conducted for hypothesis 1.............................43
Table 4.16: Coefficient table of regression analysis conducted for hypothesis 1.........................43
Table 4.17: Summary output of regression analysis conducted for hypothesis 2.........................44
Table 4.18: ANOVA table of regression analysis conducted for hypothesis 2.............................44
Table 4.19: Coefficient table of regression analysis conducted for hypothesis 2.........................44
Table 4.20: Summary output of regression analysis conducted for hypothesis 3.........................45
Table 4.21: ANOVA table of regression analysis conducted for hypothesis 3.............................46
Table 4.22: Coefficient table of regression analysis conducted for hypothesis 3.........................46

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IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
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Chapter 1: Introduction
1.1 Introduction
The research report is based on “Impact of outsourcing web development projects on
business performance”. The business functions are growing increasingly complex by means of
globalization, competition as well as technology at rapid pace. Husted and de Sousa-Filho (2017)
noted that handling of aspects of the business operations is difficult for organization to view the
suppliers as the cooperative partners. Bhardwaj and Rana (2015) indicated that outsourcing is
shifted function either in whole from main organization towards the third party. Outsourcing is
contractual relationship among external vendor as well as enterprise in which the vendors are
assumed responsibility for more of the enterprise business functions. Outsourcing of business
operations are fallen under three categories such as increase in revenue, improvement
capabilities and reduction of cost.
1.2 Background of the project
1.3 Research aim and objectives
The aim of this report is to analyze the impact of outsourcing web development on the
business performance. Following are the objectives such as:
 To determine the extent of outsourcing into business performance in web
development projects
 To determine relationship between outsourcing and business performance into
web development projects
 To determine the factors affect implementation of outsourcing
1.4 Research question
What is the impact of outsourcing web development projects on business performance?
1.5 Purpose of the research
The purpose of this study is to understand specific measures on the dimensions of
organizational performance as well as interrelationships to understand relationships among