Outsourcing of Business Processes

Outsourcing of business processes and functions have become very common in the modern business scenario as every organization aspires to be more competitive in the market by increasing the effectiveness of all their business functions and processes. Various business organizations have increasingly adopted the concept of outsourcing as it offers various types of advantages to the business organizations. The main reason according to majority of organizations regarding outsourcing is that the organizations mostly outsource in order to increase the effectiveness of their core activities. But along with the advantages there are certain risks which are associated with outsourcing and therefore an organization should weigh the pros and cons of outsourcing before taking a decision regarding it.

The main objective of the project is to determine whether outsourcing of business functions and processes by a company enhances the brand image of the company in the market. As there are various advantages and drawbacks of outsourcing business functions and processes to other specialized operators but it is still not clear whether the outsourcing of business functions and processes leads to the enhancement of brand image for the company.

The scope of the project helps in understanding the factors, which leads to differences in effectiveness of an organization regarding outsourcing of business functions and processes. As the level of effectiveness regarding outsourcing is not same for all sectors therefore the project will help various business organizations regarding taking decision whether to outsource business function and processes to other specialized organization or to keep them under their control. The scope of the project also helps business organizations to decide which business function or process should be outsourced to specialized organizations as its effectiveness varies from sector to sector and finally the scope of the project helps in determining whether to outsource or not depending upon the enhancement of brands associated with outsourcing.

According to Agburu, Nyianshima and Akuraun (2017) outsourcing is an innovative concept which is gaining wide popularity in the context of current business environment as outsourcing involves transferring various non-core activities and processes of business organization to other specialized service providers or other organizations so that an organization can concentrate on improving the effectiveness of its core business function and activities and at the same time will help in increasing the effectiveness of the business function which are being outsourced as it will be managed and controlled by specialist in those functions and processes.

Advantages of Outsourcing

As opined by Gonzalez, Gasco and Llopis (2015) outsourcing of business processes and activities helps to achieve positive results for an organization as outsourcing of noncore business functions and processes impact the overall operational efficiency of the organizations. The outsourcing of business functions and processes helps in promoting and maintaining efficiency in the overall operations of a company. In case of outsourcing of business processes and functions it remains the responsibility of the third party service provider or the specialist organizations to whom a particular process or function is outsourced by a company to accept the responsibilities which are transferred by the first part.

IBM is one of the leading companies which promotes the concept of outsourcing in an effective manner as they outsource several non-core business functions and processes to other organizations or third party by entering in to an agreement with the third party in order to take responsibility of their noncore function so that they can concentrate actively in increasing the effectiveness of their core activities and operations which helps in increasing the overall efficiency of the company.

As stated by Montaseb, Ragheb, Ragab and Elsamadicy (2018) IBM is considered one of the major IT companies in the world which specializes in cloud programing and computing and there are functions and processes of the company which are vital in nature and therefore in order to increase the efficiency of their overall operation, the company outsources several of its business functions and processes to countries like India, where the cost of labour is low compared to other western countries and also due to the large availability of skilled IT technicians.

There are various advantages which IBM experiences as a result of outsourcing of business functions which are as follows:

Specialized workers- As stated by S?oniec (2016) the concept of outsourcing involves transfer of business processes and functions to specialized third part organizations or service provider who are well equipped with specialized workers in order to complete the activities of the company.

Maintaining of efficiency at work- According to Patil and Wongsurawat (2015) outsourcing of business functions and process have led to increase in the overall efficiency of IBM as the company has been able to focus in its core area in which it specializes which has helped in increasing its frequency and moreover the outsourcing of business activities and functions to other specialists provider have also led to the increase in efficiency of those tasks which contributes to the overall efficiency of the company.

Risks of Outsourcing

Risk Sharing- As opined by Letica (2016) outsourcing of business functions and process have also led to sharing of risks between IBM and its overall partners which have helped in decreasing the impact associated with the risk. It is very important for a company like IBM to manage their risks effectively in order to stay competitive in the market and therefore outsourcing of business functions and activities will help in sharing and mitigation of risks jointly.

Apart from the advantages there are various risks which are associated with outsourcing with IBM which are as follows:

Increased Costs- The outsourcing of business process and activities leads to increase of operational costs in IBM as a significant amount of investment is required to enter into an agreement with other organizations and third party service providers.

Lack of control—As IBM enters into an agreement with the other organizations regarding outsourcing of business activities, they transfer the responsibility of managing the activity and process to the third party which leads to lack of managerial control by IBM and in case of any failure by the third party to reach its goals and objectives effectively, IBM cannot interfere during the middle of such failures which results in losses for the company.

Quality Issues- As opined by Vilko (2013) another issue which is associated with outsourcing in IBM is quality issue as the third party service providers fail to provide the required quality of efficiency required by the organization which reduces the quality of service offered by the company.

The Primary Question for the current business research is as follows:

• How is the outsourcing of business functions and processes by an organization connected with the brand image of an organization?

The secondary questions which will be used in the current research are as follows:

• How does outsourcing of business functions lend different competitive advantages to different sectors?
• How is the nature of outsourcing of business functions differ from sector to sector?
• What are the criteria followed in different sector regarding choosing an outsourcing vendor?

The independent variable which is being used in the current research is nature of the business functions which have been outsourced by the company and the dependent variable of the current research is enhancement in brand image. The hypothesis of the research is that with the change of sector, the effectiveness of outsourcing varies from one sector to the other which is related to brand enhancement.

There are namely two types of research which are carried out researchers in context of business research, namely qualitative research and quantitative research.

Qualitative Research Process

As opined by Berkovich (2018) the primary step which is followed by researchers in contexts of Qualitative research is framing the questions which are to be asked to the respondents by the researchers during the process of interviewing the respondents. Once the questions are being finalized, researchers’ focuses their attention on selecting the desired and appropriate respondents, upon whom the research will be based upon and accordingly the researcher also determines the sample size which is going to be used in the research. As opined by Petrescu and Lauer (2017) after the respondents of the research are selected and finalized and after the determination of the sample size of the research, the researchers start to collect data from the selected respondents. After the collection of the data from the respondents, the researchers divert their attention towards the analysis and interpretation of the data which are collected from the respondents. After the completion of the analysis and interpretation of the collected data, the researcher focuses on completing the theoretical and conceptual tasks which are associated with the results of the research and upon its conclusion the results and conclusion of the research are published by the researchers.

Impact on Brand Image

Research reliability and Validity

In order to ensure that the research which is conducted is reliable and valid in nature, the researchers’ needs to confirm whether all the components of the research such as research methodology, time frame and sampling technique used in the research are based on the requirement of the research. The researchers also need to ensure that the respondents who are selected as the respondents of the research are not pressurized or influenced accordingly in order to obtain the desired results of the research.

Sampling Technique

As pined by Håkansson and Waluszewski (2016) the sampling technique which will be followed by the researchers in order collect data for the research is non-probability sampling and the sub-category of the non-probability sampling which will be followed is purposive sampling.

The sample size of the survey which is to be conducted in the company is 30 as it will contribute to the purpose of the research.

Data Collection methods

The data collection methods which will be used during the course of collecting data from the respondents of the survey are conducting in-depth interviews with the respondents, discussion and observation with the respondents and accordingly noting down the personal perceptions and opinions of the respondents.

The independent variable which is being used in the current research is nature of the business functions which have been outsourced by the company and the dependent variable of the current research isenhancement in brand image.

Quantitative Research Process

As stated by Fletcher (2015) the primary step which is followed by researchers in contexts of Quantitative research is finalizing the theory which will be used the researchers. After finalizing the theory which will be used in the research, the next step which is followed in this type of research is setting the hypothesis of the researching and after setting the hypothesis of the research, the researcher focuses on identifying and determining the measures of concepts which will be followed at the time of collection of data. The next step which the researchers followed in context of qualitative research is selecting and determining the respondents to be used for the data and after the respondents are selected then the researcher focuses on the collection of the data. After the collection of the data, the data are analysed and interpreted accordingly by the researchers and after the completion of analysis of the data, the results of the analysis are derived along with the calculation.

Primary Question

Research Instruments

The research instruments which are being implemented for quantitative research by the researchers in this business research are questionnaires and surveys which will help in the collection of data required for the purpose of the survey.

As opined by Stroburg (2016) the basis step which is associated with the quantitative data analysis process is data cleaning. The next step which is followed in the quantitative data analysis process by the researchers is data coding process. After the completion of the data coding process, the quantitative data analysis process which is followed by the researcher is data presentation process. After the completion of the data presentation process, the next step which is involved in the quantitative data analysis process is the data interpretation process. The final step which is associated with the quantitative data analysis process after the completion of the data interpretation process is the data discussion process.

The sampling process which be used in the quantitative research by the researchers in context of the current business research is non-probability sampling and the type of non-probability sampling which will be used in context of the current business research is purposive sampling.

The sample size of the quantitative research in context of the current business research is 30. The respondents of the survey will be the managers and senior employees of the companies where various functions of the company are outsourced.

The tool which is used to collect data from the respondents in the quantitative research process of the current business research is questionnaires. The questions which are part of the questionnaire are all structured in nature so that it helps in fulfilling the objective of the research and also enables the respondents to be confident in nature while answering the question which helps in fulfilling the objective of the survey. The questionnaire of the current business research is attached in the appendix of the report.

To increase the reliability of the current business research, the researchers have implemented the attribute of homogeneity in the current research process and to make sure that the current research is valid in nature, the researcher have implemented the content validity approach.

The current research have been successful in finding out the what types of business functions can be outsourced by a company in order to increase its effectiveness and whether it helps in increasing the brand image of the company but the current research fails to find out that whether the success regarding business process and function outsourcing is same throughout different sectors or throughout multiple industries.

Secondary Questions

GNATT Chart

Conclusion

From the above business research report it is clear and evident that outsourcing helps in enhancing the brand image of organizations as it helps in increasing the effectiveness of the organization. As outsourcing offers various risks and advantages to a business, therefore a business organization must take its decision regarding outsourcing after analysing every pros and cons associated with outsourcing with their company. From the analysis of the above business research report it can be also stated that enhancement of brand image of the company depends on the nature of business function being outsourced by an organization.

Reference List

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Berkovich, I. (2018). Beyond qualitative/quantitative structuralism: The positivist qualitative research and the paradigmatic disclaimer. Quality and Quantity, 52(5), 2063-2077. Available at- doi:https://dx.doi.org/10.1007/s11135-017-0607-3

Fletcher, S. L. (2015). Exploring the influence of middle manager leadership in a changing medical environment: A quantitative study (Order No. 3712310).Available from Business Premium Collection. (1707929818). Available at- https://search.proquest.com/docview/1707929818?accountid=30552

Gonzalez, R., Gasco, J. L., and Llopis, J. (2015). Information systems outsourcing satisfaction: Some explanatory factors. Industrial Management and Data Systems, 115(6), 1067-1085. Available at- doi:https://dx.doi.org/10.1108/IMDS-01-2015-0030

Håkansson, H., and Waluszewski, A. (2016).“Methodomania”?on the methodological and theoretical challenges of IMP business research. The IMP Journal, 10(3), 443-463. Available at- doi:https://dx.doi.org/10.1108/IMP-01-2016-0001

Letica, M. (2016).THE EFFECT OF OUTSOURCING ACTIVITIES SELECTION ON THE BENEFITS OF OUTSOURCING/UTJECAJ IZBORA AKTIVNOSTI NA KORISTI OUTSOURCINGA ZA PODUZECE. Management : Journal of Contemporary Management Issues, 21(2), 77-97. Available at- https://search.proquest.com/docview/1854197379?accountid=30552

Montaseb, M. M., Ragheb, M. A., Ragab, A. A., and Elsamadicy, A. M. (2018). The affect factors of SMEs’ outsourcing decision making. Paper presented at the , 9(3) 271-278. Available at- https://search.proquest.com/docview/2058342189?accountid=30552

Patil, S., and Wongsurawat, W. (2015). Information technology (IT) outsourcing by business process outsourcing/information technology enabled services (BPO/ITES) firms in india. Journal of Enterprise Information Management, 28(1), 60-76. Available at- doi:https://dx.doi.org/10.1108/JEIM-09-2013-0068

Petrescu, M., and Lauer, B. (2017). Qualitative marketing research: The state of journal publications. The Qualitative Report, 22(9), 2248-2287.Available at- https://search.proquest.com/docview/1938992268?accountid=30552

S?oniec, J. (2016). NEWS IN THE IT OUTSOURCING AND TRENDS IN ITS DEVELOPMENT. Journal of Positive Management, 7(4), 3-18. Available at- doi:https://dx.doi.org/10.12775/JPM.2016.019

Stroburg, S. K. (2016). Customer relationship management and customer loyalty in the casino industry: A quantitative correlational study (Order No. 10108363). Available from Business Premium Collection. (1793670696). Available at- https://search.proquest.com/docview/1793670696?accountid=30552

Vilko, J. (2013). Assessing the impact of outsourcing in the electricity network industry. Baltic Journal of Management, 8(1), 27-44. Available at- doi:https://dx.doi.org/10.1108/17465261311291641