HI6008 - Woolworths Australia: Outsourcing Advantages & Disadvantages

This report examines the advantages and disadvantages of business process outsourcing, using Woolworths Australia as a case study. It begins with a literature review, exploring the concept of outsourcing and its potential benefits, such as cost reduction and increased efficiency, as well as its drawbacks, including potential cultural confusion and information leakage. The research identifies a gap in the existing literature regarding the factors that affect outsourcing and business functioning. The report formulates hypotheses related to increased productivity and reduced operational costs through outsourcing. Primary and secondary research questions are posed to guide the investigation, employing both qualitative and quantitative research methods, including questionnaires. The findings suggest that outsourcing can enhance business efficiency and profitability. Limitations of the research include time constraints and data collection challenges. The report concludes that outsourcing is a key factor in enhancing competencies, productivity, and efficiency, and highlights the effectiveness of the chosen research methodology. Desklib provides access to similar solved assignments for students.

Assignment 2
1

Table of Contents
Introduction: -..................................................................................................................................3
Project Objective: -..........................................................................................................................4
Project scope: -................................................................................................................................5
Literature Review............................................................................................................................6
Research Gap and hypothesis..........................................................................................................8
Research questions...........................................................................................................................9
Research design and methodology................................................................................................10
Research findings...........................................................................................................................13
Research limitation........................................................................................................................14
Time schedule................................................................................................................................15
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
2

Introduction: -
Business Process Outsourcing is a process by which a company outsources its work to any other
service provider. The internal functions of a business are outsourced to an external organisation
specializing in the management of those functions. Usually, the non-core operations of a
company are outsourced. This is a cost cutting technique. Companies outsource functions like a
call centre, market research, call centre, engineering, etc. In this research, the impact of
outsourcing is shown taking into the context the business of Woolworths Australia.
3

Project Objective: -
The objective of the project is to highlight the advantages and disadvantages of outsourcing of
business operations to third parties. This study also helps us in understanding the importance of
outsourcing. Herein this research is also formulated to effectively complete the research taking
into consideration both the forms of the methodology used in the research.
4

Project scope: -
This project focusses on the advantages and disadvantages of outsourcing business functions. It
begins with the review of the literature and further includes the theories, the advantages and
disadvantages of business function outsourcing. Further, this study presents the research
methodology, analyses of the study. The last part of the project discusses the conclusion of the
research (Silverman, 2016).
5

Literature Review: -
According to Troacă and Bodislav, (2012), outsourcing is an activity in which there is a
performance of the various forms of the services which helps in enhancing the productivity of
the business. This also helps in reducing the costs of the business. It helps in enhancing the jobs
and the services of the employees and support the company in the long run. It helps in the
development of the economies of scale. The outsourcing used in the working of Woolworths
helps the business to attain the benefits of the competitive advantages (Troacă and Bodislav,
2012). The functions of outsourcing help in enhancing the business competencies and also the
results. This also helps in the development of the employment opportunities in the working of
Woolworths. The functional costs of the business are reduced with the help of this feature and
company can attain the benefits of the competitive advantages. It also helps in enhancing the
support provided to the employees.
Outsourcing is such an act which basically assists in the fulfilment of the internal operations of
the business. It is widely used by the Australian organisations to enhance the level of the
productivity and the efficiency. It also helps in providing the quality services and also enhances
the level of the productivity. This is an act basically works with increasing the size of the
organisational working and the environment. This also helps in the effective management of the
retail sector and its workings in the competitive environment and the business applications.
Advantages and disadvantages of outsourcing:
According to Somjai, (2017), the function of the outsourcing in the business organisation and the
working is very significant. This major advantage which is observed in the Woolworths is the
reduction of the costs structure of the business. The reduction in the costs allows the business to
focus on the main core areas of the organisation which helps in enhancing the business growth
and the profitability (Somjai, 2017). It also helps in improving the costs related to the expertise
control and the quality services. It also aids the company in terms of the benefits assessed related
to the costs structure and the workings.
According to Tayauova, (2012), this also leads to develop the confusion among the consumers
regarding the issues related to the culture and the varied level of understanding. The individuals
6

are not aware of the benefits derived from the outsourcing and their usage. The risks related to
the leakage of the information outsourced are also faced by the company. This form of difficulty
develops the ineffectiveness in the work scenario and the applications (Tayauova, 2012).
7

Research Gap and hypothesis
In this research, the main gap identified that the less focus is given to the factors which affect the
outsourcing and the business functioning. It basically lays focus on the advantages and the
disadvantages persuaded by the outsourcing (Williamson and Johanson, 2017). This research
basically concentrates on the method which focuses on the increased efficiency and the reduction
in the costs. The basic assumptions which are developed in this research are provided thereunder:
Hypothesis 1: Increased productivity and the efficiency is involved with the factors such as
availability of experts.
Hypothesis 2: Operational costs are reduced with the usage of the outsourcing.
8

Research questions
The basic questions which are identified from the research are provided thereunder:
Primary questions:
Question 1: Mention the benefits and the issues of outsourcing?
Secondary questions:
Question 1: Mentions the impacts of the outsourcing on the business organisation?
Question 2: Are the acts of outsourcing proves to be beneficial for the business?
9

Research design and methodology
The research design is such which covers the facts on the basis of which the research is based.
The research methodology which is used in this research is provided thereunder:
Qualitative research:
The qualitative research is the one which takes into consideration various factor such as the
articles, journals while analysing the data. This research basically covers the various forms such
as interviews, observation, etc. The research taken is complete and reliable in all the aspects and
contains the factual results.
Quantitative research:
In this form of the research the factors such as the numerical terms and the figures, statistics are
taken into consideration to develop the results. The method basically covers the various forms
such as the surveys, interviews, etc. The quantitative research is such which is factual and
reliable in nature. This research helps in the effective evaluation of the results identified from the
outsourcing.
Questionnaires
The questions asked are provided thereunder
Question 1: What are the advantages of using outsourcing in the business working?
Response Percentage
Enhance profitability 50%
Effective competitive advantages 30%
Improves productivity 20%
10

Percentage
Question 2: The concept of outsourcing works in which form of organisations?
Response Percentage
Small organisations 30%
Medium organisations 20%
Large organisations 50%
Question 3: Does outsourcing helps in enhancing the level of the competitive advantages?
Response Percentage
Agree 60%
11

Disagree 20%
Nil 20%
Agree
Disagree
Nil
Percentage
Small organisations
Medium organisations
Large organisations
12

Research findings
It is analysed from the research conducted that the concept of outsourcing helps in enhancing the
business efficiency and the level of profitability. It is derived from the research that the acts of
the outsourcing are such which proves to be significant in terms of the business operations and
the effectiveness. The responses collected from the customers also helps in proving the above
fact which specifically highlights the importance of the outsourcing.
13

Research limitation
The limitation which is identified from the research conducted is that the time taken to collect the
data and facts in order to complete the research. The problems related to the time and the
resources affect the completion of the research in an effective manner. The responses collected
are also of the mixed nature which develops the inefficiency in the collection of the data. The
basic dependency laid on the resources such as the internet is also considered to be an effective
problem in the collection of the research (O'Leary, 2017).
14

Time schedule
The time taken for the completion of the research is in less number which develops the level of
inadequacy and the inefficiency in the research hold. This also develops the problems related to
the collection of the responses from the employees involved in the organisation.
Activity Starting time Ending time Duration
Effective Selection of the
topic used in research
01 May 2018 04 May 2018 4 days
Collection of the useful
resources
05 May 2018 07 May 2018 3 days
Collection of both forms of
data
08 May 2018 10 May 2018 2 days
Evaluation of the data
collected
11 May 2018 12 May 2018 2 days
Recommendation 13 May 2018 15 May 2018 4 days
15

Gantt Chart
May
Activity 1 2 3 4 5 6 7 8 9 10
1
1 12
1
3 14 15
Effective Selection of the
topic used in research
Collection of the useful
resources
Collection of both forms of
data
Evaluation of the data
collected
Recommendation
16

Conclusion
It is concluded from the above research that the outsourcing is a key factor which helps in
enhancing the level of the competencies. The benefits help in enhancing the level of the
productivity and the efficiency in relation to the various market factors. The effective use of the
methodology in the completion of the research proves to be effective in terms of the collection of
responses and the data. Hence this research acts as an effective way to develop the increased
understanding bof the acts of the outsourcing in the business productivity.
17

References
 O'Leary, Z., 2017. The essential guide to doing your research project. Sage.
 Silverman, D., 2016. Qualitative research. Sage.
 Somjai, S., 2017. Advantages and disadvantages of outsourcing. The Business and
Management Review. Vol. 9. No. 1.
 Tayauova, G., 2012. Advantages and disadvantages of outsourcing: analysis of outsourcing
practices of Kazakhstan banks. International Conference on Leadership, Technology and
Innovation Management. Vol. 41. pp. 188 – 195.
 Troacă, V.A. and Bodislav, D.A., 2012. Outsourcing: The Concept. Theoretical and Applied
Economics. Vol. 6, No. 6, pp.51.
 Williamson, K. and Johanson, G. eds., 2017. Research Methods: Information, Systems, and
Contexts. Chandos Publishing.
18