An Analysis of Business Outsourcing for Marks and Spencer

This report delves into the concept of business outsourcing, defining it as the practice of contracting out operations to reduce costs and enhance efficiency. It explores the advantages, such as cost reduction and improved quality, and disadvantages, including loss of control. The report focuses on Marks and Spencer as a case study, specifically examining their outsourcing of the human resource department. The literature review covers various aspects of outsourcing, including its usefulness, characteristics, and drawbacks, citing multiple academic sources. The analysis highlights the strategic implications of outsourcing, including its impact on productivity, profitability, and competitive advantages. The report concludes by emphasizing the importance of effective outsourcing strategies for businesses aiming for long-term sustainability and success, and how it impacts the business operations and its competitiveness.

BUSINESS RESEARCH

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
OBJECTIVE....................................................................................................................................3
SCOPE.............................................................................................................................................3
LITERATURE REVIEW................................................................................................................3
Concept of business outsourcing.................................................................................................3
Usefulness business outsourcing.................................................................................................4
Characteristics of business outsourcing......................................................................................5
Drawbacks of business outsourcing............................................................................................6
Effective business outsourcing....................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCE...................................................................................................................................9

INTRODUCTION
Outsourcing is the process where the organisation shifts their operation, department, task
or job to another external company in order to reduce the cost and enhance the efficiency of the
firm. In simple words, it can be said that when the functions of the company are contracted out to
third party either on-site or off-site of the business to perform their different activities speedily. It
is the cost saving technique which have the significant impact on manufacturing, marketing,
financing, investment decision etc. This report includes the different advantages and
disadvantages for outsourcing different functions of the organisation such as it help to reduce
cost, improve quality but at the same time all the decisions are taken by third-party companies so
organisation have no control over the those functions, operations or departments. Marks and
Spencer have been selected to continue this report. The organisation is outsourcing human
resource department so they can reduce the cost related to hiring and development of employees
as well as helps them to finds effective employees in the company.
OBJECTIVE
 To analyse the diverse kinds of outsourcing business functions (Business Outsourcing,
2016).
 To determine the advantages and disadvantages of outsourcing business for Marks and
Spencer
SCOPE
Present study will be more focused towards effective understanding of outsourcing
functions so that better outcome can be generated in respect to same. It has been noticed that by
having an effective evaluation of diverse values in regard to outsourcing the experts can
determine the advantages and disadvantages of sourcing (Sople, 2016). It is beneficial in order to
have development of outsourcing activities and its implication in business functions. It means the
study will provide better application of outsourcing services within Marks and Spencer.
LITERATURE REVIEW
Concept of business outsourcing
According to the views of McIvor, (2016) Business outsourcing is the practice or
technique where company can allocate certain job function to the outside workers or external

authorities instead of firm's employee.. The function is outsourced to the other company or any
individual. It has been become a trend in the human resource management practice so that better
outcome can be attained from the business. In respect to certain functions of organisation. Such
activities are allocated to the other or third-party company rather than handling them in house. In
the today's world, more and more companies, whether they are small or large, are turning their
business as outsource in order to grow in their specific or single field. On the contrary to this,
McIvor and Humphreys, (2016) said that outsourcing is process where the venture performs
different task, manufacture products and serve various services for thther organisation. The
function that other companies does can also be performed within organisation but it might
increase the overall cost of operation. It means the application of outsourcing is considered as
factor that reduces the cost and allows to enhance the work efficiency. , partmental functions can
be promoted in desired manner to meet the outcome.
According to the views of Gerbl and Humphreys, (2016) outsourcing is also called as the
business process outsourcing which state that it is process of hiring the other company or
individual either internationally or domestically to handle different activities of the business for
them. It is the common practice of small and medium size business which is done in order to
gain various skills and services which are hard to develop due to different reasons such as
financial resources, man power, inventory etc. It helps the organisation to focus on their core
competencies to cut the cost and enhance the work productivity. , with the passage of time, most
of the organisation have realised the significance of outsourcing the ness is that it provides a
monetary benefit to the in w the company. ntradictory view of Mann and Graham, (2016) it is the
situation where the nisation is not able to handle some operation of the business as well as it
enhances the cost, at that time, they employee other firm of person to do some work rather than
doing that work from the employees of the venture. This is the major factor that change and
enhance the production and distribution of the goods and services of organisation.
Usefulness business outsourcing
According to Lacity and Carmel, (2016) Outsourcing plays significant role in enhancing
the productivity and profitability of the organisation. Small and medium scale companies mostly
need to outsource some of their operations in order to ensure that work standards are maintained.
It also allows advancing the effective aspects in the operation. As well as it reduces the cost of
the company. There are several reason why business need to be outsourced. It includes the , that

n the core activities so that better aspects can be promoted in respect to the , when mental
growth. insideith this, the back office of the business also needs to be expanded so that better
support can be offered to sion, ice activities. at that allow them to reinforce those operations that
is significant without lacking for the quality and service in the back office. On the contrary to
this, Liu and Huang, (2017) argue that the other important factor that leads the organisation to
outsource is cost and efficiency saving, some department of the venture is complex are not
handled by them at that time, they need to hire other company so that the cost of organisation
reduces and serve greater efficiency to them with the quality of operation.
In accordance to McIvor, (2016) other than these two importance, the organisation need
to outsource due to growth and expansion, every firm need to do expansion to grow from the
survival stage, in order to do that they need to make investment on every department of the
organisation, which is not possible for the small and medium scale company, so it has become
important for them to outsource their some part of business to reduce the cost of investment and
they will effectively expand and grow to meet up their competitors. Gerbl and Humphreys,
(2016) argue that other important factor that influence the company to outsource is customer
support, there are several queries which is made by the different customer, it is significant for the
organisation to solve that quarries to solve the problems they are facing, if organisation Handel
different activities at a single time, they can not be effective. At that time, the firm will not able
to solve the different problems of clients so they need to outsource that department in order to
solve the queries and satisfy the customers.
Characteristics of business outsourcing
In view point of Fogarty and Bell, (2014) business outsourcing for any organisation is
required for management of entire business operations. However, it is helpful in cost
effectiveness and improving efficiency of entity. It influences productivity and profitability as
well competitive advantages for long term sustainability in market efficiently. In addition to this,
business outsourcing is useful for getting adjusted towards occurred changes in the company as
increases flexibility and improvements according to time and situation occurred. Therefore,
proper management of all business activities and quality of products can be improved efficiently.
In addition to this, it assures that business processes are carried in a right direction as well
implementation in business operations can be achieved systematically. Besides this, by analysing
all factors and tools of an organisation regarding business organisation, systematic listing of all

activities to be followed on are presented through business outsourcing. Overall, excess of
capital expenditures can be reduced that affects productivity and management of business
operations. In addition to this, various tools are used for business processes and outsourcing as
planning process for further activities and improving quality services of products produced by
organisation.
On the contrary to this, Sekaran and Bougie, (2016) claim that through business
outsourcing, strategies are not prepared as customer orientation. Including this, additional
expenses during legal formalities for making contract are incurred as well disturbance in
budgetary system is determined. However, there is risk of disclosing the confidential information
of business organisation. Similarly, business risks can also be occurred that impacts on entity and
its effectiveness adversely. Therefore, it is essential for any organisation to create contract of
outsourcing very carefully for sharing data and its portfolio. Besides this, various management of
business operations should be consideration of its managers therefore further upcoming obstacles
can be reduced. It influences effective management of all business operations and making
company as for competitive advantages. Hence, by considering on business outsourcing
advantages, top level managers of the entity must be aware of what is happening at workplace.
Drawbacks of business outsourcing
In opinion of Schwarz, (2014) whether business outsourcing is useful for management of
operations and improving quality services. But, considering all factors as positive and negative
are required for reducing risks occur in operations and effectiveness. However, company's aim in
respect of competitive advantages should less than costumer satisfaction with products provided
by it. In addition to this, several occurred risks obtained in entity as misuse of company's data
and inefficient marketability. Along with this, by critically evaluating business outsourcing and
its functions, it is recognised that there can be lack in interest of employees towards job
performance and contribution in team work. It reflects organisation's business, marketing and
competitive strategies negatively. Moreover, contracting to manage business operations of any
organisation in consideration of third party may face loss and inadequate resources as well funds
for further business operations. Apart from this, it is evaluated that company's outsourcing and
inefficiency in operations can be against of it.
As per the point of view of Roberts and et.al., (2013) it is recognised that business
outsourcing has several disadvantages such as; poor quality of goods, lack in communication

regarding business operations and action plan to be implemented. In this regard, various
obstacles and improper management of business operations can have that affects business plan in
the future time. Moreover, cash flow can be inadequate that affects sales revenue and profit
margin of the organisation. Accordingly, customer satisfaction and marketability of entity occurs
as challenge and competitiveness for longer time period. However, trust on contractors and
employees who are going to outsourcing of business is quite difficult. As well, consideration of
third party and involvement of company's employer in portfolio and its management is difficult.
Therefore, by considering all the factors, it is recognised that management of all business
operations can unable to manage so properly.
Author express their view that Kim and et.al., (2014) according to critical evaluation on
business outsourcing, mismanagement of operations can be gained. In this regard, production
and distribution system of organisation also get affected which is not so effective for a company
and its effectiveness. Therefore, for formulating and implementing strategies regarding business
operations, it is necessary to having involvement of managers and decision maker of the entity.
In addition to this, author also says like taking business outsourcing positively impacts on
business operations and further operations. Moreover, management of entire business activities is
related with further operation for competitive advantages for long time periodicity. Along with
this, making decisions related to business effectiveness and competitiveness affect profitability
and other factors. Therefore, for systematic business outsourcing, it is essential for any
organisation to prepare strategies for competitiveness and marketing activities efficiently.
Effective business outsourcing
According to Fogarty and Bell, (2014) business outsourcing has both positive and
negative aspects that affects business and competitive strategies. In accordance to this, for
contracting between two or more parties, it is essential to have consideration of third party.
Similarly, capital expenditures and planning for production and distribution of goods should be
in accordance to organisation's effectiveness and further implementation. In addition to this, it is
required for any organisation to select a trust worthy and loyal party for business outsourcing.
However, all capital expenditures and sales revenues should be in favour of organisation.
Including this, it is needed for any entity to consider ethical considerations for business activities
and marketing of goods. In addition to this, performance management of employees should be in
hand of organisation for asking their requirements and providing comfortability with individual's

job performance. Moreover, efficiencies and adopting technologies in accordance to the latest
time and proper infrastructure. Therefore, being aware of all activities and meetings with clients
should be consideration and proper acceptance of challenges.
As per the point of view of Schwarz, (2014) business outsourcing is useful for sharing
risks and preparing strategies according to current situation of the organisation. In this regard,
business performance and activities including production and supplement of goods can be
managed efficiently. There must be assurance of organisation's efficiency and proficiency
effectively that will be effective for effectiveness of business operations and proper management
of entire activities. In addition to this, it is also required for decision maker of entity to
contracting with authorised individual for business outsourcing and preparing strategies related
to business activities. Regarding cost effectiveness and investment on business operations, it is
required to consider expenses on different stages of manufacturing, production and
advertisement of products. In this regard, production and distribution system of products should
be consideration of decision maker generates different suggestions for quality improvements and
competitiveness.
In opinion of Kim and et.al., (2014) business outsourcing should be clear and trust
worthy for any organisation for security of data. . In this regard, marketability and
competitiveness of enterprise should be considered, of organisation and its further operations.
Therefore, business outsourcing for any organisation should be clear and efficient for contracting
between parties and operating business activities. Moreover, it is essential for any entity to select
contract party which is trust worthy and loyal also suggests organisation for reducing risks and
implementing strategies for proper management of entire business operations.
CONCLUSION
It can be concluded from the project report that the outsourcing is the process where the
organisation hires the other company to handle some of its activities or operations in order to
reduce cost and enhance efficiency. The report states that small and medium scale organisation
need to outsource their department due to several reasons such as focus on the core operation,
cost and efficiency saving, growth and expansion, customer support etc. There are several
advantages and disadvantages that organisation can attain through outsourcing of the business
operations. It also helps in enhancing work efficiency and reduce cost on investment so that
better outcome can be attained.

REFERENCE
Books and Journal
Fogarty, D. and Bell, P.C., 2014. Should you outsource analytics? MIT Sloan Management
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Evidence from the Business Process Outsourcing Industry. Information Systems
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Lacity, M. and Carmel, E., 2016. Employing US Military Families to Provide Business Process
Outsourcing Services: A Case study of Impact Sourcing and Reshoring. CAIS, 39, p.9.
Liu, S. and Huang, W. W., 2017. Effects of process and outcome controls on business process
outsourcing performance: Moderating roles of vendor and client capability risks.
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Mann, L. and Graham, M., 2016. The Domestic Turn: Business Process Outsourcing and the
Growing Automation of Kenyan Organisations. The Journal of Development Studies.
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McIvor, R., 2016. An analysis of the application of process improvement techniques in business
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Roberts, J.G. and et.al., 2013. A Review of Outsourcing of Services in Health Care
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Sekaran, U. and Bougie, R., 2016. Research methods for business: A skill building approach.
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Online

Business Outsourcing. 2016. [Online]. Available through:
<https://www.cognizant.com/industries-resources/communications/Business-Process-
Services-Redefining-Business-Process-Outsourcing.pdf>. [Accessed on 24th August
2017].