Outsourcing Business Functions: Advantages, Disadvantages, and Risks

This research report provides a detailed analysis of outsourcing business functions, exploring both the advantages and disadvantages associated with integrating third-party services into business operations. The project's objective is to assess the positive and negative aspects of outsourcing, focusing on its impact on business efficiency and turnover. The scope includes evaluating the financial benefits, strategies for developing outsourcing programs, and identifying the logical sequence of activities. The literature review highlights the potential for improved business performance and customer satisfaction through outsourcing, while also acknowledging the risks, such as data loss. The report uses a mixed-methods approach, including interviews, surveys, and questionnaires, to gather data and analyze the impact of outsourcing. The research design involves a detailed schedule and Gantt chart to manage the project's timeline, from topic selection to research assessment. The report concludes with a discussion of research limitations and references to support its findings, providing valuable insights for businesses considering outsourcing strategies.

Business Research October 6
2017

Contents
Introduction:...............................................................................................................................2
Project Objective........................................................................................................................2
Project scope..............................................................................................................................2
Literature review........................................................................................................................3
Research questions and hypothesis............................................................................................3
Research design and methodology.............................................................................................4
Schedule:....................................................................................................................................5
Gantt chart..................................................................................................................................7
Research Limitation:..................................................................................................................7
Conclusion..................................................................................................................................7
References:.................................................................................................................................7

Introduction:
The digital innovation in the global market creates the new value for the organization to
outsource their business operation to the other company for completing the activities and get
the desired output. The outsourcing program is utilized for saving the precious time of the
enterprise which was previously used in the completing the business processes. The precious
time can be used for other activities which help in improving the turnover of the enterprise
(Kremic, 2013). The short and long term sustainability of the enterprise can be maintained by
outsourcing the activities and maintaining good and healthy relationship with the third party.
The cost associated with the project activity scheduled can be reduced to an high extent to
complete the project under estimated budget. The research paper is designed to focus on the
advantages and disadvantages of outsourcing business functions.
Project Objective
The project objective is to focus on the positive and negative aspect associated with the
outsourcing of the business activity with the inclusion of third party in the working
curriculum of the enterprise. The fundamentals of the outsourcing program helps in analysing
the efficiency of the business operations which are undertaken for achieving the required
output. The focus should be given on determining the difference in the turnover of the
enterprise to analyse the benefit of using the outsourced program in the working environment
of the firm.
Project scope
The in-scope activities which should be undertaken in completing the project are mentioned
below:
 The difference in the turnover of the enterprise to analyse the benefit of using the
outsourced program in the working environment of the firm (Krell,2014).
 The strategies for developing the outsourced program to the third party
 Determining the logical sequence of activities to be coordinated on the outsourced
working program
 The recommendation of the customer to outsource the business activities to the third
party
 The positive aspect of the outsourced program

 The negative aspect of the outsourced program
 Improving the in-house capability of the enterprise.
Literature review
The Outsourcing of the activities are undertaken to improve the performance of the business
in regards to raising the satisfaction level of the associated customers which in turn helps in
increasing the turnover of the company. The quality of the outcome can be improved with the
inclusion of the third party but there is one major drawback of the outsourcing program that
the loss of data can occur in the working process of the enterprise (Milan, 2010). The benefits
of using the outsourcing program are that it is helpful in enhancing the business processes
and the human resource skills for completing the business activity (Mirza, 2015). The
globalization is the major factor responsible for outsourcing the business operation to the
other companies. The sale of the product can be improved by utilizing the marketing
strategies. The quality of the product can be optimized with the inclusion of outsourcing
fundamental program. By analysing the literature review, we predict that the financial growth
of the company can be improved by reducing the amount of budget spent on carrying over the
business operational procedures (Ray, 2009). The negative aspect which is associated with
the outsourcing program is that it is difficult to optimize the skills and expertise of the
working employees (Patricia, 2014).
Research questions and hypothesis
Primary research question:
What are the advantages and disadvantages of the outsourcing function?
Secondary research question:
How the productivity of the organization can be improved with the use of outsourcing
function?
How the cost can be reduced by deploying the business function to the third party?
What are the negative consequences of the outsourced function?
What are the risks mitigation plans should be undertaken?
Research Hypothesis:

It has been identified that the utilization of the outsourcing activities helps in producing the
quality product for increasing the efficiency and turnover of the company by attracting more
and more customers towards the enterprise (Tucker, 2011). The working structure helps in
increasing the efficiency of the employees. The assessment of the outsourced activities and
business process helps in reducing the workload from the enterprise working schedule
(Haveckin, 2012). It helps in identifying the advantages and disadvantages of the functions
used for outsourced on the third party working platform. The research hypothesis should be
prepared on the following framework:
Research design and methodology
The qualitative and quantitative approach is used for determining the advantages and
disadvantages of the working of the outsourcing program.

 Interview: The interview is arranged with the senior management of the company who
indulges the outsourcing program in the working curriculum of the enterprise.
 Observation and survey: The deployment of the business outsourced program should
be observed by carrying over survey on different companies to analyse the positive
and the negative impact of the outsourcing function (Iqbal, 2013).
 Questionnaire: The research questions helps in designing the questionnaire to get the
desired data for analysis of the research questions.
 Sampling: The method of sampling is used for testing the positive and the negative
impact of the outsourcing function on the sample undertaken.
 Ethical Issues: The analysis of the ethical issues helps in predicting the code of
conduct followed by the working employees to create an ethical environment on the
outsourced business platform.
Schedule:
Research
Activity
Program
Starting
date of the
research
Finishing
date of the
research
Explanation
Topic of research 09-Oct-17 10-Oct-17
The research study has been undertaken on
advantages and disadvantages associated with
the business operation which are outsourced”
Criteria for
selection of team
required
11-Oct-17 13-Oct-17
Criteria should be settled for analysis the
expertise of the participating unit which is
required for completing the research program
Material collected
for literature
review process
14-Oct-17 16-Oct-17
Data collection is the most important phase of
the research study. The relevancy and the
accuracy are the pillars for determining the data
according to the research project.
Analysis of data
documented in
the literature
review
17-Oct-17 19-Oct-17 The format should be created for writing the
result of the analysis of literature review
undertaken. The documentation helps in
reaching the conclusion for developing the draft

for the research study by setting down the
research questions.
Designing of
primary and
secondary
research question
20-Oct-17 23-Oct-17
The analysis of the literature review helps in
creating primary and secondary research
questions for taking the research study in the
right direction. The question should be based
on analysing the negative and positive effect of
outsourcing on the business performance.
Documentation of
draft for the
research study
24-Oct-17 26-Oct-17
The research draft helps in specifying the
project scope and the relevant outcome related
to the outsourced program.
Qualitative and
quantitative
research
methodologies
27-Oct-17 20-Nov-17
The research methodologies plays a vital role in
collecting the relevant and accurate data for
carrying over the research on outsourced
program
Proposal
reviewing 21-Nov-17 23-Nov-17 The accuracy of the draft should be reviewed
before submitting it for approval
Sanction of the
research draft 24-Nov-17 27-Nov-17 The research study continues after the sanction
from the researcher
Research analysis
phase 28-Nov-17 30-Dec-17
The analysis of the data helps in developing the
research document which provides the relevant
data to optimize negative and positive effect of
outsourcing on the business performance.
Research
assessment phase 01-Jan-18 10-Jan-18 Findings and evaluation of the research should
be clearly mentioned in the research document
Termination of
the research study 11-Jan-18 20-Jan-18 Termination of the research study

Gantt chart
Research Limitation:
The sample taken for the study is limited in its capacity for determining the functionality of
the outsourcing program. It is difficult to analyse the different views of the participant
correctly. The baseline for completing the research work is also limited.
Conclusion
The research proposal helps in determining the advantages and disadvantages of the
outsourced function with the inclusion of the third party. It has been identified that the quality
of the product can be optimized with the inclusion of outsourcing fundamental program.
References:
Haveckin, B. (2012). Information technology outsourcing by large organization. 1st ed.
[ebook]. http://vuir.vu.edu.au/19401/1/Brian_Haveckin.pdf [Accessed 26 Sep. 2017].
Iqbal, J. (2013). Outsourcing: A review of trends, winners, and loser and future direction. 1st
ed. [ebook]. http://ijbssnet.com/journals/Vol_4_No_8_Special_Issue_July_2013/9.pdf
[Accessed 26 Sep. 2017].
Krell, E. (2014). Outsourcing the finance and accounting function. 1st ed. [ebook].
http://www.cimaglobal.com/Documents/ImportedDocuments/tech_mag_outsourcing_the_fin
ance_and_accounting_functions_oct07.pdf.pdf [Accessed 26 Sep. 2017].
Kremic, T. (2013). Outsourcing decision support: A survey of benefits, risks, and decision
factor. 1st ed. [ebook]. http://ankara.lti.cs.cmu.edu/11780/sites/default/files/Outsourcing-
Survey.pdf [Accessed 26 Sep. 2017].

Millan, M. (2010). The benefits and risks of outsourcing. 1st ed. [ebook].
https://www.lexology.com/library/detail.aspx?g=e698d613-af77-4e34-b84e-940e14e94ce4
[Accessed 26 Sep. 2017].
Mirza, A. (2015). The impact of outsourcing on the organization and economy. 1st ed.
[ebook]. http://www.diva-portal.org/smash/get/diva2:831505/FULLTEXT01.pdf [Accessed
26 Sep. 2017].
Patricia, P. (2014). Advantages and disadvantages of outsourcing. 1st ed. [ebook].
https://smartchurchmanagement.com/advantages-and-disadvantages-of-outsourcing/
[Accessed 26 Sep. 2017].
Ray, G. (2009). Finance and accounting outsourcing: An empirical study of service
providers. 1st ed. [ebook]. [Accessed 26 Sep. 2017].
Tucker, J. (2011). The pros and cons of outsourcing. 1st ed. [ebook].
https://www.journalofaccountancy.com/issues/1998/jun/antonuci.html [Accessed 26 Sep.
2017].