STEP ONE: SELECTING A TOPIC.

Topic: Impacts of Outsourcing services on an Organization

1.0 Introduction

I choose this topic because in modern times, Outsourcing is an essential aspect in organizations. Outsourcing helps to improve quality of services provided by an organization. Outsourcing services like advertising results to reduction of costs, time and increase flexibility. Some Companies decide to outsource so as to eliminate unmanageable departments where employees are under-performing.

1.1 Research objectives

This research will provide insights on significance of outsourcing because previous studies carried out on the subject provide inconsistent information.

1. To understand the concept of outsourcing through literature review

2. Assessing the effects of outsourcing on a Company's performance

3. Find out benefits and of outsourcing for Organizations'

1.2 Preliminary Literature review

Outsourcing has been defined by several scholars. Definitions’ differ (Belcourt, 2006; Hatonen, and Eriksson, 2009), the process performed internally and the use of external resources to execute operations of a company. Outsourcing involves subcontracting a section or full functions of a Firm to an external outsourcing service provider (Barrar, Peter, and Roxane, 2006).  An Example of a service outsourced is information Technology. Business process outsourcing is another form of outsourcing that involves outsourcing supply, demand, management as well as finance and regulatory.

There are a number of reasons to outsource outlined by different authors (Hatonen and Eriksson, 2009: Gonzalez et al, 2009). Outsourcing helps to reduce operation costs (Click, Rick, and Thomas, 2005). However, the process has some hidden costs that can make an outsourcing plan more expensive compared to in-house operations. Companies decide to outsource in order to concentrate on core business activities (Gonzalez et al, 2009). Outsourcing services increases flexibility. For instance, when selecting one IT service provider, a Firm is able to select from the best supplier.

There are risks associated with outsourcing. The vendor may decide to enter the market as a competitor (Belcourt, 2006). For example, Schwinn bicycle manufacturing Firm based in USA outsourced Bicycle frame design services from Giant Manufacturing Company in Taiwan. Giant Manufacturing Company started manufacturing bicycles and become a major competitor to Schwinn Company (Belcourt, 2006). A company should conduct cost benefit analysis to evaluate the benefits to be derived from the outsourcing activity.

1.3 Data Collection

Primary data collection techniques will be applied to gather data. 20 top executives’ will be given questionnaires. A questionnaire will be created regarding outsourcing issues. Telephone discussion will be carried out with several respondents. The questionnaires will be delivered to the executives to be filled. They can choose to return the questionnaire and indicate the exact date and time they can be engage in a telephone interview lasting for 10 minutes.

Questions

Has your Company outsourced any services?

What motivates managers to outsource services?

Does outsourcing increase Company performance and efficiency?

Major reasons for outsourcing a certain service

Is there a trend in your company towards outsourcing more?

How do Companies benefit from outsourcing services?

Risks of outsourcing

If you were to outsource again, what would you do differently?

1.4 Outcomes

Some executives may decline to fill the questionnaire or take part in the telephone interview. The questionnaire may be too long and time consuming for the respondents which can affect the response rate.

1.5 Bibliography

Baba, M., (2004). A research Proposal into the practice of outsourcing of facilities management:

Fan, Y., (200). Strategic outsourcing: Evidence from British companies; Lincoln school of management.

Jiang, B., and Qureshi, A., (2006). Research on outsourcing results: Current Literature and Future Opportunities, Emerald, Management Decision Vol. 44 No. 1,

Lee, J et al., (2000). The evolution of outsourcing Research: what is the next issue: Hawaii International conference on system sciences

Linden, B.,(2010). Innovation within an outsourcing relationship: Radboud University Nijmegen

Sharma, D., & Subramaniam, N., (2005). Outsourcing of Internal Audit Services In Australian Firms: Some preliminary Evidence. AAMJAF, vol I

1.6 References

Barrar, Peter, and Roxane, G. (2006). Global Outsourcing Strategies: An International

Reference on Effective Outsourcing Relationships, Aldershot, England: Gower,

Belcourt, M, (2006). Outsourcing: The benefits and the risks: York University, Canada

Click, Rick L, and Thomas N. Duening. (2005). Business Process Outsourcing: The

Competitive Advantage, Hoboken, N.J: John Wiley & Sons

Gonzalez, R., et al(2010). Information systems outsourcing reasons and risks: A New

Assessment. University of Alicante

Hatonen, J., & Eriksson, T., (2009). 30+ A years of research and practice of outsourcing:

Exploring the past and anticipating the future, Journal of internal management.