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Assessment Of Risks In Offshore Outsourcing

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What Are The Advantages Of Outsourcing The Business Function? 

What Are The Disadvantages Of Outsourcing The Business Function? 

What Are The Roles Of Outsourcing The Business Function?




In the global business scenario, the organization faces stiff competition and organizations make effort in all possible strategy to make their business stay lucrative and appropriate. Further, cost control is an essential aspect on the different manner to keep company incline, mean and well-built in their mission for accomplishing the specified goals and objectives. In addition, many initiatives have begun by the company to keep control on cost. In this way, outsourcing is a key phenomenon that is used by recent companies to control the cost. This way has increased their popularity in the existing business decades (Cavusgil, et. al., 2014). Outsourcing started as an organization when big American corporation has decided to get their ordinary job function from the third-party organization and other organization.

Project Objectives

The main of this project is to evaluate the advantages and disadvantages of outsourcing. There are certain objectives which will be used by researchers to meet the main aim of this project. It is as follows:

  • To analyze the advantage of outsourcing business functions
  • To evaluate the disadvantages of outsourcing business functions

Project Scope

Outsourcing is a business practice in which a job function, any form of work, and activity is delegated to another person and organization. It is begun to stay away from everyday job function but it has developed into a giant industry by itself. Outsourcing has seen as a business function apart from being an industry sector as it makes sense in given business scenario. For instance, a corporation may want to produce and sell specified products. But, it is not required that the same company produce the products in its residence nation in which cost of production can be very high as compared to producing in another nation (Schniederjans, et. al., 2015). This function also comes under the sort of outsourcing.  

Literature Review

According to Petkov and Petkov (2017), outsourcing is a business practice which provides the benefits to the organization because it aids to give more emphasizes on their core capabilities as compared to wasting time, money and effort on everyday business activity yet it focuses on core task activities. There are large numbers of companies which engage in outsourcing as an activity because it helps them to save on the cost to a great extent.  

In favored to this, Abreu and Faoro (2017) demonstrated that customer care was not a central part of business function for these companies. Therefore, these companies outsourced this function from other corporations as the cost for the same business function can be less than half while this function was operated in Australia with Australian employees. Outsourcing has an impact on the different segments of the industry due to a distinct chain reaction. Therefore, the prime reason of starting outsourcing as the business function can save the cost. But, afterward, many reasons were recognized and more practices of companies were initiated to outsource.

In the view of, Ketler and Walstrom (1993), cost saving is used as the primary benefit of outsourcing. It also provides different benefits. Further, management is making effort to emphasize on their prime competencies and other practices. As well as, routine job function are outsourced to other specialist companies who will do the job role as per the management. Moreover, Easy and necessary activities like building maintenance, factory maintenance, housekeeping and janitorial services cannot be core competencies of the certain company. Therefore it is outsourced from other vendors who can maintain these core capabilities. There can be a set of people who are outsourced for a core function and they can spend more time as well as efforts to maintain the resources. 

In the view of Abreu and Faoro (2017), outsourcing can be a prospect uncertainty that an organization exposes them.  In opposition to this, it is definite that risk management proposals are commenced during outsourcing the function of the business. Along with this, there is always the risk of losing crucial information. It can be hazardous for business function when it exists in the financial sector then there could be the possibility of occurring substantial loss. Along with this, there is the possibility of losing critical information due to outsourcing. The same issue may exist while the operating function is outsourced. In this way, data is shared with the third organization as it can fall into wrong hands and can be distorted. As a result, it creates a different issue for the organization. Moreover, the company should make standard regarding operation process and it may imply to that vendor which undertaking the outsourcing (Davé, 2017). However, there is a possibility that business function can deviate and a small amount of alteration can ruin the entire operation.

Moreover, in this research, the gap is analyzed in the literature review. It can be evaluated that there is no depth analysis of outsourcing the business function. Further, secondary data is not sufficient to analyze the advantage and disadvantage of outsourcing the business function. Moreover, there is need to provide the benefits of outsourcing the business function with the perspectives of stakeholders.


Research Design and Methodology

The research design is effective to provide the relevant instruction to collect the information and evaluates the findings regarding research issue. There are certain types of research design   that can be implemented by the researcher.  These are qualitative and quantitative research design (Mackey and Gass, 2015). 

Qualitative research

The researcher will use the following process for this research because it is significant to get the qualitative data in an appropriate manner (Glesne, 2015).

Initially, a researcher will create the questionnaire of research in which question will be related to research issue. After that, it will choose the suitable subject and sites that will be appropriate to the topic. Afterward, a researcher will create the theoretical and conceptual outline to conduct the research and review the findings. These processes will be exercised by a researcher to evaluate the advantages and disadvantages of outsourcing the business function in Telstra telecommunication company, Australia (Brinkmann, 2014). 

Approaches to reliability and Validity

The inductive approach will be exercised by the researcher for conducting this research because research topic is based on qualitative nature. The researcher will use this approach as it will enable them to generate more theories and concepts associated with research issue. As a result, this research approach will be appropriate to gain reliability and validity in findings of research. In opposed to this, a researcher will not use deductive approach due to no need to make a hypothesis (Flick, 2015).

Sampling and Sample Size

Sampling is a process of choosing the participants from targeted people to collect required data to meet the objectives of the research. Further, a research will use non-probability sampling method because research topic is based on qualitative nature. But, this sampling does not offer the identical chances to each participant. Although, this sampling method is not costly yet, it will take more time to make an open-ended questionnaire for an interview. For obtaining the qualitative data through the interview, 10 operation managers will be selected from Telstra telecommunication, company (Silverman, 2016). In this interview, the researcher will take opinion and views about the advantages and disadvantages of outsourcing the business function in Telstra, Australia.

Data Collection Method

The primary information is first-handed information which is gathered by a researcher to obtain the reliable and valid result. This information will be collected by a researcher through different sources named experiment, observation, questionnaire, and survey. Through this, a researcher will able to obtain the data with respect to research issue hence it will improve the research quality. In addition, a researcher will use survey through questionnaire as it enables them to collect the huge facts and figures from targeted people (Smith, 2015). As well as, it provides the appropriate information which aids to accomplish the goals and objectives of the research.

Variables Specifications

For conducting this research, a researcher will use different kinds of variables like an independent and dependent variable. Further, the independent variable is outsourcing and the dependent variable impacts on the business function of Telstra, Australia (Gast, and Ledford, 2014).

A researcher will use below procedure to obtain the quantitative outcomes:

The above chart depicts that a researcher will generate the theory and creates the hypothesis at the initial level. Subsequently, the researcher will develop the design of research and creates the different aspects with respect to research issue. After that, a researcher will choose the relevant sites and select the significant subject matters. Later, data will be collected by a researcher and determines it via using different techniques. In the last step, researchers will estimate the findings to reach out the conclusion (Neuman, and Robson, 2014). 

Research Instrument

Research instrument is an analysis method that will be formulated by a researcher to collect the data regarding research matter. Secondary information will be used by a researcher by using different sources. These data are already published in different journals and websites. Moreover, these sources can be a journal article, academic publication, offline and online websites, annual report, government publication and company’s websites (Blumberg, et. al., 2014). For this research, these sources will be used by a researcher as it takes less time and cost.


A researcher will use the below quantitative data analysis procedure:

As per the above flowchart, it is demonstrated that initially data will be formulated by a researcher that is to be determined and chose the suitable data. Subsequently, a researcher will gain the knowledge regarding frequencies, mean as well as recoding practices. After that, data will be analyzed by a researcher through different methods like statistics, and crosstabs. Moreover, researchers will use MS-excel software to demonstrate the data via different pie charts, tables, and graphs. Subsequently, a researcher will interpret and evaluate the findings and give suggestions. Consequently, it will enable the researcher to accomplish the research aims and objectives in particular time period (Tarone, et. al., 2013). 

Sampling and Sample Size

For quantitative assessment, probability sampling method will be used by a researcher as it provides the equal chances to their participants to give their views and opinion. Consequently, it is effective to reduce unfairness from survey through a questionnaire (Tuohy, et. al., 2013). A researcher will select approximately 50 employees who deal with outsourcing business function in Telstra Telecommunication Company in Australia. It would be significant for the researcher to obtain the valid and reliable result with less time because researcher will use a close-ended questionnaire for this survey through a questionnaire.

Reliability and Validity of Data

Validity shows the extent at which feasibility of different concept is analyzed in quantitative-based research. For example, survey through questionnaire will implement by the researcher to assess the advantages and disadvantages of outsourcing business functions. Another technique is reliability that can be used by a researcher to analyze the superiority of quantitative based research. The researcher will use identical research instrument to analyze the reliability of survey through questionnaire will be used (Maley et. al., 2015). These data will provide quantitative based findings as it will enable the researcher to meet the research aim and objectives in an appropriate manner.

Research Limitations

A researcher may face different issue while completing the research. These issues are insufficient expenses, resources and cost restraint. It can exist in data gathering procedure of research. In addition, there are certain limitations that can suffer by a researcher when obtaining survey through questionnaire like researcher will focus on the structure of questionnaire, and size of the sample. Furthermore, researchers will have accountability to protect the confidentiality of respondents such as personal data (Tarone, et. al., 2013).These limitations can influence the validity and reliability of research outcome. 

Time schedule

From the above research schedule, it can be evaluated that obtaining survey through questionnaire and gathering information via secondary sources will take more time than the other activities that will be performed in this research study.



From the above interpretation, it can be concluded that there are different benefits of outsourcing the business function. But, at the same time, it is analyzed that there are certain disadvantages of outsourcing the business function. It can be evaluated that both qualitative and quantitative research design will be used by research to meet the research objectives. In the last, it can be concluded that this research will take 10 week to meet the objectives.



Abreu, M. de and Faoro, R. (2017) ‘Guidelines for outsourcing and innovation of adoption in it and its relationship with strategic risks: the case of an,' Revista.

Blumberg, B. F., Cooper, D. R., and Schindler, P. S. (2014) Business research methods. UK: McGraw-hill education.

Brinkmann, S. (2014) Interview. In Encyclopedia of Critical Psychology (pp. 1008-1010). New York: Springer.

Cavusgil, S. T., Knight, G., Riesenberger, J. R., Rammal, H. G., and Rose, E. L. (2014) International business. Australia: Pearson.

Davé, S. (2017) ‘CALL CENTER NARRATIVE,' The Routledge Companion to Asian American Media.

Flick, U. (2015) Introducing research methodology: A beginner's guide to doing a research project. USA: Sage.

Gast, D. L., and Ledford, J. R. (Eds.). (2014) Single case research methodology: Applications in special education and behavioral sciences. UK: Routledge.

Glesne, C. (2015) Becoming qualitative researchers: An introduction. UK: Pearson.

Ketler, K. and Walstrom, J. (1993) ‘The outsourcing decision,' International Journal of information management.

Mackey, A., and Gass, S. M. (2015) Second language research: Methodology and design. UK: Routledge.

Maley, J. F., Kowalkowski, C., Brege, S., and Biggemann, S. (2015) Outsourcing maintenance in complex process industries: Managing firm capabilities in lock-in effect. Asia Pacific Journal of Marketing and Logistics, 27(5), pp. 801-825.

Neuman, W. L., and Robson, K. (2014) Basics of social research. Canada: Pearson.

Petkov, D. and Petkova, O. (2017) ‘An Assessment of Risks in Offshore Outsourcing of Information Technology,' Journal of Information Systems Applied Research.

Schniederjans, M. J., Schniederjans, A. M., and Schniederjans, D. G. (2015) Outsourcing and insourcing in an international context. UK: Routledge.

Silverman, D. (Ed.). (2016) Qualitative research. USA: Sage.

Smith, J. A. (Ed.). (2015) Qualitative psychology: A practical guide to research methods. USA: Sage.

Tarone, E. E., Gass, S. M., and Cohen, A. D. (Eds.). (2013) Research methodology in second-language acquisition. UK: Routledge.

Tuohy, D., Cooney, A., Dowling, M., Murphy, K., and Sixsmith, J. (2013) an overview of interpretive phenomenology as a research methodology, Nurse Researcher, 20(6), pp.17-20.


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