Advantages of Business Function Outsourcing
Business is way of exchanging goods or services to the other party for money. Around the world businesses function to make profits and to increase their bottom lines with the changing times. Take any business, it functions on three aspects, i.e., Needs, Wants, & Desires. Businesses can be at small scale, medium scale or Large scale. There are basically two types of companies, either they are National or Multinational. In the globalized world, businesses have crosses barriers and local boundaries to spread their presence and make lives better. Any business works and sustains on Innovations and Adaptability to change. Famous literatures have been published and theorized, upon how businesses get affected. Political, Economic, Social, Technology, Legal, & Environment, are the list of broad factors which affect and effect the businesses worldwide. As the businesses grow, the complexity of doing them also gets increased. Businesses involve various functions under their umbrella which somehow affect their cost of doing the business every day. In order to cut the costs, a concept of outsourcing has emerged. Outsourcing is defined as lending one or two business functions to the third party. The advantage is the business tends to get superior quality of service or goods and they can focus on sharpening their core business functions. Businesses tend to cut the cost and can use the precious money in increasing the proficiency of their business, which may be, increasing focus on client intimacy, working towards customer relationship management and focusing upon increasing their presence in the world market. Business Function Outsourcing has many aspects similar to it. Such as Business Process Outsourcing, Human Resource Outsourcing, Information technology Outsourcing, or outsourcing one complete Strategic Key Unit to the third Party. There are attached advantages and disadvantages to the business function outsourcing concept, like any function has while working internal or external to an organization. Business function outsourcing to the neighboring country is known as near shore outsourcing and to the far countries is also known as offshoring. Main hurdles for business function outsourcing to function efficiently is the cultural difference and language difference. This results into miscommunication, misunderstanding and lot of confusion within the business. However, if these factors are taken into control, the complete concept of outsourcing would result in much more benefits to the organization and help them to focus more keenly towards increasing their influence in the market and make themselves as profitable one, which every business thinks about. There are many companies which offer these services and upon which the businesses can really rely upon. However, one factor which requires concern is leakage of confidential information of the company outside the parameters of the company and the ideas, which gets outside the boundaries of the company can be easily copied and used by the competitor which can be loss for the business. However, if strategies and control of what information to be leaked out of the company can be done, business function outsourcing would be much preferred for not only the big businesses but for also the new entrants entering the market space.
Disadvantages of Business Function Outsourcing
Project objective of the given project is to present paper on Business Research having topic Outsourcing Business Functions. Objective for the given project is to highlight the hypothesis and research question for the given project and justify the literature review on Business function outsourcing, also it includes analyzing the gap and justifying the gap analysis through thorough explanation and justifications. The given project is an effort to explain the benefits of business function outsourcing and explain the advantages of it through this research work. The project work explains the Quantitative Research and Qualitative Research and explains its scope and relevance for the present paper.
Main objective thus is to present clear understanding of business function outsourcing and various sections which come under the gambit of business function outsourcing such as business process outsourcing, human resource outsourcing and information technology outsourcing. From this the paper focuses upon developing a draft which covers the various aspects which mainly affect the outsourcing aspect of business and tends to give concise understanding of the concept of business function outsourcing. The project further explains the limitation of carrying out the present work and explains in concise manner the complete understanding of outsourcing and whether its favorable for the organization or not at the end of the day.
The scope of the project is to take into consideration the research work related to business process outsourcing, human resource outsourcing, and information technology outsourcing. It further includes the justification of these three aspects of outsourcing along with justification of the gap analysis recognized by the earlier project.
Project scope is to develop a detailed report on Business Function Outsourcing and its relevance in the present business world and also in the future.
The given literature review, has mentioned literatures which clearly mark the advantages and disadvantages the businesses have while outsourcing their partial or core business functions. The literature review marks the advantages of having cost cutting and getting exceptional services or products for their own businesses. Literature review projects, the cost advantage and technological advantage of having business function outsourcing. Business process outsourcing does gives an edge to the business in the competitive market place but it comes at the cost of losing privacy and confidential information to an outsider. Businesses however, shall limit the outsourcing as it helps to secure the confidential information within the premises of business as it may lead to losing core competencies the business have above the competitors. However, as most of the businesses rather than investing on building inhouse facility and talents are outsourcing many functions to the outsource company and they do are reaping the long lasting benefits. It is because of these reasons that outsourcing industry has become vital business in itself in the current business world. Having trustworthy collaboration and long lasting relationship with the outsourcer does have advantage for many businesses which have just started or entered into the market. Outsourcing is really advantageous when technology know how for a company gives better chance to represent to the clients or customers. Business process outsourcing does helps the companies to divert their resources from non business functions to core business functions which really helps the companies to improve upon their core competencies and win the customers and clients through their skilled workforce and improved service or product lines. Administrative works and security services can be very well outsourced, however, policies shall be made during agreement with outsourcing companies which doesn’t questions the privacy and confidentiality of the business in a highly competitive market place. Business outsourcing helps the organization to quickly grasp the market through added advantages the outsourcing companies render to the businesses. There does exist cost but its at an affordable cost which makes outsourcing highly suitable option in present business scenario
Profitability of Business Function Outsourcing
Q.1. After understanding, the advantages and disadvantages of business function outsourcing, Is it still profitable, to outsource, Business Functions ?
Q.1. In order to have business function outsourcing, what parameters, the companies has to be watchful off?
Q.2. How to overcome the disadvantages of business function outsourcing?
A Qualitative research is subjective in nature. It is often conducted through, interviews, open ended discussions, focus group discussions, and observations.
Questions are prepared for carrying out qualitative research.
Sample of 500 individuals and organizations is selected and representatives are instructed to carry out interviews of the sample size in order to develop an understanding of the research hypothesis and both primary and secondary research question Creswell, J. W. (2013).
Focus group discussions were also carried out to understand the perceptions and views of industry people over the research limitation and gap.
The sample for covering focus group discussions was selected from various industry people including, IT technology, Human researches, and business process professionals Neuman, W. L., & Neuman, W. L. (2006).
The sample size for both interviews and focus group discussions were carried on mix of outsourcing companies and businesses which outsource their one or two business functions.
The questionnaire for the research is mentioned in the Appendix section at the end of the business report Kogan, S. M., Wejnert, C., Chen, Y., Brody, G. H., & Slater, L. M. (2011).
Quantitative research is mainly descriptive and experimental in nature. It helps to develop understanding between the dependent and independent variables. Quantitative research is method which helps to gather data which is numerical in nature Creswell, J. W. (2002).
Quantitative research was carried out in the sample of 500 samples which had mix of professionals and organization key professionals.
The survey was carried out through personal and use of email to develop the data for the present research work.
The data will be analysed using SPSS software Bryman, A., & Cramer, D. (1994), Trochim, W. M., & Donnelly, J. P. (2001).
The basic limitation of the research project, is that it can be conducted through small samples due to limitations of the research budget. There is also limitation of the resources which can be used while conducting research for the current research topic. Another limitation is the research work will be based on data collected through less resources beng employed to carryout the current research
Time Schedule for the research work is to be carried out in three to four months time. Initially the databases will be selected, where secondary data by filling different keywords would be carried out.
Conclusion
Business function outsourcing has gained vitality in current business world. There is highly added advantages of outsourcing business functions, such as processes, like manufacturing, security, catering, etc. to an outsourcing service provider. There are many advantages and few disadvantages for the companies thinking of outsourcing there functions, to the third party service provider. The biggest drawback of outsourcing is there is breach in the privacy and confidential information of the company outside the company boundaries. The threat of copying the business ideas and competencies, restricts many companies to look for outsourcing as an option. However, if these limitations, are taken into due considerations and taken control off, business outsourcing would be really fruitful for the organization and it can very well focus on key areas and core areas, to increase its competencies in the present hypercompetitive and over-communicated market place.
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