Outsourcing Web Dev Projects' Impact on Business Performance
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Literature Review
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This document provides a comprehensive literature review focused on the impact of outsourcing web development projects on business performance, particularly within Singapore's IT industry. It explores the advantages and risks associated with IT outsourcing, examines the relationship between outsourcing and various aspects of business performance (including financial gains, innovation, and flexibility), and identifies factors affecting the implementation of outsourcing strategies. The review references numerous academic sources to build a theoretical framework and highlights the increasing complexity of business operations in the face of globalization and rapid technological advancements. The document also includes a research methodology section, detailing the proposed approach for data collection and analysis, including quantitative methods and ethical considerations. The study uses survey questionnaires to gather data from IT professionals and employs regression analysis to test hypotheses related to the impact of outsourcing on cost, innovation, and organizational flexibility. The research aims to provide insights into how businesses can effectively leverage outsourcing to improve their overall 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:
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.
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.
2
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,
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
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
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
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
5
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
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
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
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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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
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
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
PERFORMANCE
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
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
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
8
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
various organizational actions. The organizational performance is encompassed of three areas
such as financial, shareholder return performance as well as product market.
1.6 Overview of the research report
The researcher has being completed a partition of the research topics such that the topic is
emphasized in comprehensive manner.
Introduction: The particulars of selected research topic are labelled so that the reader can
comprehend subject of this research topic. In this particular chapter, concept of outsourcing web
development projects is described. Further the investigation aim as well as objectives are
specified which helps in improved understanding of the selected research topic.
Literature review: In this section, models as well as ideas helps researcher to understand
selected research topic and areas of study. With help of the literature sources, the researcher tried
to evaluate the concepts of outsourcing in standardized manner. The critical perspective of this
study helps to observe the pros as well as cons into particular topic.
Research methodology: The research methods help in gaining data collection concerned
on the research topic is also mentioned. The research methodology helps to guide path which can
principal to improved study of selected topic besides aid to gather detailed concepts related to
this research study. Choices of the researcher techniques are being monitored by application of
appropriate justifications so that chosen methods are appropriate.
Results and analysis: Based on collecting of data as well as information, the researcher is
opted to analyze sources such that proper results are generated in apprehension to the selected
research topic. Analyzing of impact of outsourcing web development projects on business
performance are analyzed in this particular chapter which helps the researcher to better
understand of topic. This chapter helps to understand of techniques as well as methods based on
participant’s responses.
Conclusion and recommendations: This chapter provides detailed overview of the
selected research topic which comprise of results of the research subject. Based on the research
objectives, the scholar tried to regulate the accomplishment level of this topic.
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
various organizational actions. The organizational performance is encompassed of three areas
such as financial, shareholder return performance as well as product market.
1.6 Overview of the research report
The researcher has being completed a partition of the research topics such that the topic is
emphasized in comprehensive manner.
Introduction: The particulars of selected research topic are labelled so that the reader can
comprehend subject of this research topic. In this particular chapter, concept of outsourcing web
development projects is described. Further the investigation aim as well as objectives are
specified which helps in improved understanding of the selected research topic.
Literature review: In this section, models as well as ideas helps researcher to understand
selected research topic and areas of study. With help of the literature sources, the researcher tried
to evaluate the concepts of outsourcing in standardized manner. The critical perspective of this
study helps to observe the pros as well as cons into particular topic.
Research methodology: The research methods help in gaining data collection concerned
on the research topic is also mentioned. The research methodology helps to guide path which can
principal to improved study of selected topic besides aid to gather detailed concepts related to
this research study. Choices of the researcher techniques are being monitored by application of
appropriate justifications so that chosen methods are appropriate.
Results and analysis: Based on collecting of data as well as information, the researcher is
opted to analyze sources such that proper results are generated in apprehension to the selected
research topic. Analyzing of impact of outsourcing web development projects on business
performance are analyzed in this particular chapter which helps the researcher to better
understand of topic. This chapter helps to understand of techniques as well as methods based on
participant’s responses.
Conclusion and recommendations: This chapter provides detailed overview of the
selected research topic which comprise of results of the research subject. Based on the research
objectives, the scholar tried to regulate the accomplishment level of this topic.
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IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
Chapter 2: Literature Review
2.1 Introduction
The study is explored to involve into web application development into the outsourcing
projects and find out the potential challenges. The literature study is included of overview of IT
sourcing, history as well as advantages, disadvantages. It is also covered of issues related to
outsourcing web development projects. Chatterjee (2017) suggested that the performance of
organization is comprised of actual output and results of organization as measured to the
intended outputs. Outsourcing is an effective tool into web development projects as it helps to
improve of time control as it reduces complexity into operations by transfer of the business
activities to third party organization. The organizational performance is encompassed of three
areas of outcomes of firm such as financial performance, product market performance in addition
to shareholder return. The study is focused on impacts of outsourcing on the organizational
performance as well as challenges into implementation of outsourcing (Golini, Kalchschmidt and
Landoni 2015). This particular chapter is provided of research gaps identified furthermore
comprehensive conceptual framework.
2.2 Advantages of outsourcing in web development projects
Outsourcing from the outside vendors are helping to produce of goods as well as services
produced in-house that continues to rise. Carrillo, Druehl and Hsuan (2015) stated that
businesses are outsourced for various reasons such as they are required to reduce cost to become
competitive in IT marketplace. The business can also improve quality in addition to speed of
software requirements and development in IT projects. Hair Jr et al. (2015) concluded that
outsourcing begins to offer of greater value than before. It allows the business firms to
concentrate on resources on core businesses. Most outsourced business functions are included of
information technology as well as human resources (Gurung and Prater 2017). The justification
for outsourcing is economic. The business organizations determined that they can able to prepare
business inexpensively by employed with the outsiders than to rely on interior workforces.
Outsourcing started with the manufacturing sector besides it is constant into IT and service sector
as consequence to underlying position to software goods as well as facilities (Handley and Angst
2015). It becomes importance into IT sector as it has ability to reduce cost, add of business
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
Chapter 2: Literature Review
2.1 Introduction
The study is explored to involve into web application development into the outsourcing
projects and find out the potential challenges. The literature study is included of overview of IT
sourcing, history as well as advantages, disadvantages. It is also covered of issues related to
outsourcing web development projects. Chatterjee (2017) suggested that the performance of
organization is comprised of actual output and results of organization as measured to the
intended outputs. Outsourcing is an effective tool into web development projects as it helps to
improve of time control as it reduces complexity into operations by transfer of the business
activities to third party organization. The organizational performance is encompassed of three
areas of outcomes of firm such as financial performance, product market performance in addition
to shareholder return. The study is focused on impacts of outsourcing on the organizational
performance as well as challenges into implementation of outsourcing (Golini, Kalchschmidt and
Landoni 2015). This particular chapter is provided of research gaps identified furthermore
comprehensive conceptual framework.
2.2 Advantages of outsourcing in web development projects
Outsourcing from the outside vendors are helping to produce of goods as well as services
produced in-house that continues to rise. Carrillo, Druehl and Hsuan (2015) stated that
businesses are outsourced for various reasons such as they are required to reduce cost to become
competitive in IT marketplace. The business can also improve quality in addition to speed of
software requirements and development in IT projects. Hair Jr et al. (2015) concluded that
outsourcing begins to offer of greater value than before. It allows the business firms to
concentrate on resources on core businesses. Most outsourced business functions are included of
information technology as well as human resources (Gurung and Prater 2017). The justification
for outsourcing is economic. The business organizations determined that they can able to prepare
business inexpensively by employed with the outsiders than to rely on interior workforces.
Outsourcing started with the manufacturing sector besides it is constant into IT and service sector
as consequence to underlying position to software goods as well as facilities (Handley and Angst
2015). It becomes importance into IT sector as it has ability to reduce cost, add of business
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IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
values and impact on the financial performance. Earlier studies are showed that outsourcing is
increasing of trends. There are some of the reasons due to which the companies are decided to
outsource such as:
Cutting of capital costs: At the time of setting of office companies, there is required to
invest in equipments such as servers and software. Outsourcing is helped to reduce initial cost as
well as have information system (Gurung and Prater 2017).
Continuous operation: Finishing of the projects on time is considered as competitive
advantage for IT companies. Having offshore vendors with significant time differences for the IT
companies mean there is continuous operations (Liu and Yuliani 2016). There is a huge benefits
from time differences and follow the 24*7 services.
Cheap labor costs: There is time required for the company to recruit IT personnel as well
as provide of training. It is estimated that IT professionals those are able to save around 40% of
expenses into operations in case of company which is based in US (Handley and Angst 2015).
Due to outsourcing of web development projects, the cost savings is ranged from 15-40%.
Reduction of completion time of project: Demands of IT industry is changing. It is
required for the companies to become flexible and quick to adapt of changes. When a company
is chosen to outsource then it is able to tap the workers as well as professionals those have
required know how of changing technology, providing the companies advantages over the
training of personnel and cut down the completion time of project (Hodge 2018).
2.3 Risks into IT outsourcing
Most of the companies are discovered that the cost savings become less than the vendors
which are promised. The companies are found that their savings are dropped after two years.
Nicholson, Babin and Briggs (2017) stated that when propriety technology becomes an issue,
then there is a big problems of outsourcing which caused of security concerns. The companies
are protective to the customer’s data as well as relationships that they think about some of the
functions such as customer services towards outside sources. Carrillo, Druehl and Hsuan (2015)
analyzed that outsourcing is not delivered properly all the time. The managers are prepared to
outsource and the company thought that outsourcing is not able to meet with their expectations.
The cost savings are not satisfied to the customers and the result is that outsourcing becomes a
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
values and impact on the financial performance. Earlier studies are showed that outsourcing is
increasing of trends. There are some of the reasons due to which the companies are decided to
outsource such as:
Cutting of capital costs: At the time of setting of office companies, there is required to
invest in equipments such as servers and software. Outsourcing is helped to reduce initial cost as
well as have information system (Gurung and Prater 2017).
Continuous operation: Finishing of the projects on time is considered as competitive
advantage for IT companies. Having offshore vendors with significant time differences for the IT
companies mean there is continuous operations (Liu and Yuliani 2016). There is a huge benefits
from time differences and follow the 24*7 services.
Cheap labor costs: There is time required for the company to recruit IT personnel as well
as provide of training. It is estimated that IT professionals those are able to save around 40% of
expenses into operations in case of company which is based in US (Handley and Angst 2015).
Due to outsourcing of web development projects, the cost savings is ranged from 15-40%.
Reduction of completion time of project: Demands of IT industry is changing. It is
required for the companies to become flexible and quick to adapt of changes. When a company
is chosen to outsource then it is able to tap the workers as well as professionals those have
required know how of changing technology, providing the companies advantages over the
training of personnel and cut down the completion time of project (Hodge 2018).
2.3 Risks into IT outsourcing
Most of the companies are discovered that the cost savings become less than the vendors
which are promised. The companies are found that their savings are dropped after two years.
Nicholson, Babin and Briggs (2017) stated that when propriety technology becomes an issue,
then there is a big problems of outsourcing which caused of security concerns. The companies
are protective to the customer’s data as well as relationships that they think about some of the
functions such as customer services towards outside sources. Carrillo, Druehl and Hsuan (2015)
analyzed that outsourcing is not delivered properly all the time. The managers are prepared to
outsource and the company thought that outsourcing is not able to meet with their expectations.
The cost savings are not satisfied to the customers and the result is that outsourcing becomes a
11
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
problem and have potential to solve it (Liu and Wang 2014). In some of the cases, outsourcing
reduces ability of company to respond to market, and it slows efforts to bring of new products to
market. The suppliers is failed to bring and provided of quality services which affect the
reputation of company with the customers. Husted and de Sousa-Filho (2017) argued that on one
hand there are benefits of IT outsourcing while it comes with various risks. Following are the
outsourcing risks which are analyzed as follows:
Loss of control: As the companies are outsourcing the IT services from third party,
therefore various confidential data are handled by the vendor and service provider (Liang et al.
2016). In these cases, the company loses the control as well privacy over the data to analyze of
outsourcing services.
Privacy and security: The companies are requested to outsource of IT functions from the
foreign partners seem to be vulnerable regards loss of privacy. As there is various information
technology which works with data as well as privacy, then there is possibility of leakage of
confidential data for the IT companies (Liu and Wang 2014). It is required while making of
agreement with the vendors, and then the issues are related to privacy as well as security.
Loss of IT expertise: When the company is decided to outsource of its IT functions from
the third party company, then the IT staffs are required in less numbers. The staffs can able to
understand how the business is operated with extra cost and companies decided to reduce the
operating cost (Palinkas et al. 2015). Expertise IT experts are required to be selected in this case.
2.4 Web development projects and outsourcing issues
Turban et al. (2015) stated that dependence on the web is increased on regular basis.
Systems as well as applications are built from the web, quality as well as reliability. In modern
day, handling of web development project is complex. It comes from visual design, user
interface design and it is required of planning, designing, testing as well as quality checks (Moon
et al. 2016). There are some of the issues which are raised due to outsource of web development
projects such as:
Strategic issues: The common issues related to outsourcing are resources, costs, tapping
of expertise and time factors. It accesses into the company what the expertise are lacked. After
determining of objectives related to outsourcing, the company can able to determine specific sets
IMPACT OF OUTSOURCING WEB DEVELOPMENT PROJECTS ON BUSINESS
PERFORMANCE
problem and have potential to solve it (Liu and Wang 2014). In some of the cases, outsourcing
reduces ability of company to respond to market, and it slows efforts to bring of new products to
market. The suppliers is failed to bring and provided of quality services which affect the
reputation of company with the customers. Husted and de Sousa-Filho (2017) argued that on one
hand there are benefits of IT outsourcing while it comes with various risks. Following are the
outsourcing risks which are analyzed as follows:
Loss of control: As the companies are outsourcing the IT services from third party,
therefore various confidential data are handled by the vendor and service provider (Liang et al.
2016). In these cases, the company loses the control as well privacy over the data to analyze of
outsourcing services.
Privacy and security: The companies are requested to outsource of IT functions from the
foreign partners seem to be vulnerable regards loss of privacy. As there is various information
technology which works with data as well as privacy, then there is possibility of leakage of
confidential data for the IT companies (Liu and Wang 2014). It is required while making of
agreement with the vendors, and then the issues are related to privacy as well as security.
Loss of IT expertise: When the company is decided to outsource of its IT functions from
the third party company, then the IT staffs are required in less numbers. The staffs can able to
understand how the business is operated with extra cost and companies decided to reduce the
operating cost (Palinkas et al. 2015). Expertise IT experts are required to be selected in this case.
2.4 Web development projects and outsourcing issues
Turban et al. (2015) stated that dependence on the web is increased on regular basis.
Systems as well as applications are built from the web, quality as well as reliability. In modern
day, handling of web development project is complex. It comes from visual design, user
interface design and it is required of planning, designing, testing as well as quality checks (Moon
et al. 2016). There are some of the issues which are raised due to outsource of web development
projects such as:
Strategic issues: The common issues related to outsourcing are resources, costs, tapping
of expertise and time factors. It accesses into the company what the expertise are lacked. After
determining of objectives related to outsourcing, the company can able to determine specific sets
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