Problem Statement
Outsourcing business functions defines subcontracting some non-core business activities and functions to third party providers and contractors. Organizations mostly outsource some parts if their business functions like accounting, human resource, payroll, information technology, customer service and lot more (Mukherjee, Gaur and Datta 2013). There are two types of business process outsourcing namely offshore outsourcing and nearshore outsourcing. In offshore outsourcing, organizations are more likely to contract for their non-core business functions with the contractor outside of their country (Mani and Barua 2015). In nearshore outsourcing, organizations are more likely to contract for their non-primary business functions with the contractors within their domestic country. Outsourcing business functions facilitate the organizations towards freeing up some time and resources, which can in turn help them to concentrate on core business functions. However, outsourcing business function is also associated with security risks, as the organizations require sharing some important information with the outsourced organization.
This research proposal will be highlighting on the advantage and disadvantage of outsourcing business function. In order to gather specific information, the research will be conducted on Telstra and its associated outsourcing business functions. The proposal will set effective research questions and methodologies for collecting accurate research information.
Outsourcing business functions helps in reducing workloads of the employees in an organization. It also facilitates in incorporating expert knowledge in the business process for increased business performance. However, while assessing the outsourcing business functions of Telstra, it can be seen that the organization is facing lack of managerial control on their outsourcing business functions (Steven, Dong and Corsi 2014).
- To identify the advantage of outsourcing business functions in Telstra
- To recognize the disadvantage of outsourcing business functions in Telstra
- To examine the best ways of outsourcing business functions
The scope of research proposal is to assess the trends of outsourcing business functions. Furthermore, the proposal will also evaluate the advantage of outsourcing business functions on Telstra. The proper will also recognize the disadvantage associated with the business process outsourcing in Telstra.
Australian organizations are joining the global rush of business process outsourcing. Over the past few decades, there is an increasingly growing trend of outsourcing business process among the Australian organizations. As per Oshri, Kotlarsky and Gerbasi (2015), Australia has been considered as the largest market for outsourcing business functions. Moreover, the outsourcing business functions of Australian organizations have been projected for $4.6-Billion. Furthermore, Hsu, Liou and Chuang (2013) opined that NAB of Australia has taken decision to outsource more IT functions to India.
The above figure is indicating that outsourcing business functions is rapidly increasing in Australia in comparison to United Kingdom and USA. Outsourcing business functions is mostly seen among the manufacturing, telecommunication and accounting organizations. Furthermore, Wiengarten, Pagell and Fynes (2013) opined that Australia organizations are more likely to outsource their non-core business activities in India, Philippines and China.
Outsourcing business function actually leads to cost advantage for the organization. The organizations need to pay salary to the employees of their own branch for the task, which they outsource to the outsourcing companies. On the other hand, Abdul-Halim et al. (2014) opined that organizations are more likely to outsource their business activities in such countries, where the wage rate of the employees is quite low. It can actually save organizational cost of the organizations. Kitcher et al. (2013) opined that outsourcing organizations are highly equipped with special expert and technical equipment. Therefore, the main organizations can get best talent from the outsourcing companies and apply them in improving the quality of products and service. In this way, the organizations can enhance customer satisfaction through provide unique quality products and services. Liu et al. (2015) pointed out that business process outsourcing facilitates the organization to frees up some time and energies towards, which they can use in concentrating on core business functionalities. Furthermore, BPO also facilitates in gaining the advantage of time horizon, where the organization can get delivery of their projects in exact time from the outsourced organizations.
Project Objective
Outsourcing business process is associated with some hidden cost. Cezar, Cavusoglu and Raghunathan (2013) pointed out that the parent organizations need to pay additional charge to the outsourcing companies, when any changes occurred in the project. On the other hand, BPO can also lead to security risk for the parent organizations. Moreover, in BPO relationship, the parent organizations need to share huge important information with the outsourcing companies. In such situation, it can lead to security risk for the parent companies, if the outsourcing companies misuse that information with a bad intention. Furthermore, Mani and Barua (2015) opined that in BPO relationship, the parent organizational often face lack of managerial control over the outsourcing organizations. Moreover, there is huge risk in synchronization of deliverables between the parent organizations and outsourcing organizations, which can even lower the quality of the products or service.
Organizations can huge benefits from the outsourcing business function, if they can manage it in proper ways. Moreover, organizations should evaluate various business process outsourcing companies based on their business requirement and choose the one, which suites best for them. The parent organization should ensure that the outsourcing companies have understood their business objectives proper. Proper documentation is also necessary for BPO for avoiding any confusion and legal complications. Furthermore, the parent organizations should frequently communicate with the outsourcing organizations and track the performance level of the outsourcing companies (Oshri, Kotlarsky and Gerbasi 2015).
The literature review may have lack of authenticity due to inadequate access to secondary data sources. However, these gaps can be minimized in future through increasing access to wide secondary sources. It can also minimize the gaps in the quality of the literature review.
H0: Outsourcing business functions have advantages on the business performance of Telstra
H1: Outsourcing business functions have no advantages on the business performance of Telstra
- What are the advantages and disadvantages of outsourcing business function on the business performance of Telstra?
This research question will evaluate advantages and disadvantages of outsourcing business function on the business performance of Telstra. Therefore, this research question will help in getting accurate and ultimate research result.
5.1 Secondary Questions
- What is the impact of outsourcing business functions on business performance of Telstra?
This research question will evaluate the overall impact of outsourcing business functions on the business performance of Telstra. Proper evaluation of this particular research question will assess the profit level of Telstra through outsourcing business functions.
- What are the effective ways of outsourcing business functions?
This research question will be highly significant towards minimizing the issues in the research study through provide effective ways for outsourcing business functions.
Research Design and Methodology
Process of Qualitative Research Approaches to Reliability and Validity
Validation process refers to collection and analysis of collected data for assessing its level of accuracy. It encompasses entire experimental concept and compares the research results with all the research requirement of scientific research method (Lather and Pierre 2013). This research study will use statistical measures for assessing validity of the qualitative data collected from the respondents. Reliability test assesses the consistency of the collected data. It indicates the repeatability of the research findings. High degree of reliability in the collected data would lead to same type of research findings and result over the time. Moreover, reliability is directly related to the validity of a specific measure. Inter method reliability approach will be used in this research study for assessing the reliability of the gathered data.
Data Collection Method
Project Scope
Data collection method is the most important activity for collecting most accurate and relevant information regarding the research topic (Lather and Pierre 2013). In this research study, interview method will be used for collecting qualitative information about the research topic. Moreover, effective interview session will be arranged with the managers of Telstra for knowing detailed and subjective information about the advantage and disadvantage of outsourcing business functions.
3 managers of Telstra will be selected for arranging effective interview session and collecting core organizational specific information regarding the research topic. Furthermore, simple random sampling method will be used for collecting qualitative data, where the respondents will be gathered at their convenient place.
- Independent Variable: Outsourcing Business Functions
- Dependent Variable: Business Performance
Research instrument is the most important component for collecting relevant information about the topic of the research (Farooq and O’Brien 2015). This research study will use survey method for collecting authentic quantitative information regarding the research topic. In this survey method, survey questionnaires will be circulated among the selected respondents of the research study. The respondents will be asked to respond to the survey questionnaires from their own perspectives. Moreover, the survey questionnaires will be related to the advantage and disadvantage of outsourcing business functions in Telstra.
In order to conduct survey method, 50 employees from Telstra will be selected for knowing about the advantage and disadvantage of outsourcing business functions in Telstra. Moreover, the research study will use simple random sampling method for gathering useful information, where the respondents will be assembled at their suitable location for enhancing their participation level.
The method of data analysis facilitates in converting the general information to specific information for enhancing the quality of the research result (McCusker and Gunaydin 2015). This research study will use statistical method of data analysis. In this analysis, the measures of mean, median, mode and standard deviation will be used for extracting accurate meaning of the collected data. Therefore, statistical method will enhance the quality of the research outcome.
In case of survey questionnaires, this research study will use closed ended questions for gathering authentic information about the research topic from the employees of Telstra. On the other hand, in case of interview method, open ended questions will be used for collecting detailed qualitative information from the managers of Telstra.
Statistical measures will be used for assessing the validity of the collected information. Furthermore, the consistency of the collected data will be evaluated through Inter method reliability approach. It will measure the repeatability of the research result.
Every academic research can have some limitation, which can negatively influence the research outcome. In case of this research study, the time limitation can limit the access of adequate respondents, which can hamper the quality of the research information. On the other hand, the research result of this research study can also be hampered for the budget limitation of the research study. Moreover, the budget limitation can hamper the accessibility of more authentic secondary sources of data, which can also have impact on the quality of the research information.
Conclusion
While concluding the study, it can be said that outsourcing business functions can have both positive and negative impact on the performance level of an organization. From the evidence of literature review, outsourcing business functions facilitates the organizations in reducing organizational cost and enhancing the quality of the product and service. However, outsourcing business functions have some hidden cost associated with it. It also has lack of managerial control on the outsourcing companies. Therefore, it is expected that outsourcing business functions can have both advantage and disadvantage on the business performance of Telstra.
Reference List
Abdul-Halim, H., Ee, E., Ramayah, T. and Ahmad, N.H., 2014. Human resource outsourcing success: leveraging on partnership and service quality. Sage Open, 4(3), p.2158244014545475.
Cezar, A., Cavusoglu, H. and Raghunathan, S., 2013. Outsourcing information security: Contracting issues and security implications. Management Science, 60(3), pp.638-657.
Farooq, S. and O’Brien, C., 2015. An action research methodology for manufacturing technology selection: a supply chain perspective. Production Planning & Control, 26(6), pp.467-488.
Hsu, C.C., Liou, J.J. and Chuang, Y.C., 2013. Integrating DANP and modified grey relation theory for the selection of an outsourcing provider. Expert Systems with Applications, 40(6), pp.2297-2304.
Kitcher, B., McCarthy, I.P., Turner, S. and Ridgway, K., 2013. Understanding the effects of outsourcing: unpacking the total factor productivity variable. Production Planning & Control, 24(4-5), pp.308-317.
Lather, P. and St. Pierre, E.A., 2013. Post-qualitative research. International Journal of Qualitative Studies in Education, 26(6), pp.629-633.
Liu, C., Huo, B., Liu, S. and Zhao, X., 2015. Effect of information sharing and process coordination on logistics outsourcing. Industrial Management & Data Systems, 115(1), pp.41-63.
Mani, D. and Barua, A., 2015. The impact of firm learning on value creation in strategic outsourcing relationships. Journal of Management Information Systems, 32(1), pp.9-38.
McCusker, K. and Gunaydin, S., 2015. Research using qualitative, quantitative or mixed methods and choice based on the research. Perfusion, 30(7), pp.537-542.
Mukherjee, D., Gaur, A.S. and Datta, A., 2013. Creating value through offshore outsourcing: An integrative framework. Journal of International Management, 19(4), pp.377-389.
Oshri, I., Kotlarsky, J. and Gerbasi, A., 2015. Strategic innovation through outsourcing: the role of relational and contractual governance. The Journal of Strategic Information Systems, 24(3), pp.203-216.
Steven, A.B., Dong, Y. and Corsi, T., 2014. Global sourcing and quality recalls: An empirical study of outsourcing-supplier concentration-product recalls linkages. Journal of Operations Management, 32(5), pp.241-253.
Wiengarten, F., Pagell, M. and Fynes, B., 2013. The importance of contextual factors in the success of outsourcing contracts in the supply chain environment: the role of risk and complementary practices. Supply Chain Management: An International Journal, 18(6), pp.630-643.
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