Advantages And Disadvantages Of Outsourcing Business Activities

Question: Discuss about the Advantages And Disadvantages Of Outsourcing Business Activities By Woolworth Organization. Answer: Introduction Outsourcing is considered as the vital activity to be performed by existing business. Various business organizations desire to include latest technologies and techniques, innovative science methods within their premises in order to fulfill the needs of the customers. It is assumed that outsourcing of business functions is very beneficial for the organization as it can easily focus on the enhancement of core competencies of their resources as well as concentrate mainly on the business activity intensely. The main purpose of including outsourcing into the business activities is to reduce the operating costs, because a part of liability can be acquired by the third party to complete it and organization does not need to spend any additional cost on learning new activities and skills. This research report is focusing on some set of aspects associated with the advantages and disadvantages of outsourcing business activities by Woolworth organization. By including outsourcing for executing the activities of organization will result in reducing the operating costs by which organization can make more profit. Project objectives Objectives and aims of this research report are to put focus on the reason for which this research is being executed. Objective of this research report describes the problem of this research so that this research could be initiated in order to solve the issue. It is identified that the main objective of this project is to evaluate the articles related with the supply chain management outsourcing as well to acquire a perception and thought explained in these articles. Through this research report a proper set of understanding and knowledge will be developed regarding the risks and advantages indulged in deciding the outsourcing business activities (Banerjee and Williams, 2009). Project Scope The main scope of this research study is to understand the several set of aspects associated with the outsourcing business functions like advantages (benefits) and disadvantages (Potential risks) (Bushell and Remington, 2007). This study mainly focuses on the role of outsourcing into the business activities. By this research report, it is to be identified that whether advantages from the outsourcing business activities are greater than the disadvantages related with it. The proper understanding will be acquired by conducting deep research related with the topic. Literature Review Outsourcing is an agreement between a client (organization, entity, and person) and suppliers in order to acquire products, processes or services which had been acquired internally, earlier. According to the Busi and Mclvor supply chain management outsourcing depicts the relationship of seller and buyer (Busi and McIvor, 2008). Supply chain outsourcing is very helpful in increasing the flexibility of business, flow of funds, decline investment risk and cost of labor. Outsourcing of business activities is performed to develop long term connection with the other company which may be beneficial in attaining the objective of business. There are various factors available into the market by which the necessity of outsourcing is generated and these factors are cash infusion, insufficiency of internal resources, external suppliers possesses better ability as well as the requirement to emphasize on the other core competencies of business. According to the (Tayauova, 2012), there are also seve ral disadvantages of the outsourcing business functions are intellectual property leakage, involving incapable suppliers, loss of skills and internal expertise, loss the control of management, etc. According to the (Desai, 2010)., it is identify that both these aspect outsourcing business functions and supply chain management are considered as the important part of the organization by which organization can enhance its overall performance .Supply chain management helps the organization to handle their other prior activities like enhancement of the core competencies of resources hassle free and make it enable to sustain into the competitive market because the outsourced third party plays its role in an efficient manner as they are expertise in that field. By involving supply chain management into the business functions can also be a reason for developing complexity in the system as well as management system can become complicated because of the involvement of number of people. Whereas, on the other hand According to the (Kendrick, 2009), outsourcing practice is helpful for maintaining the sustainability as well as entire management team are satisfied with the results of outsourc ing procedures of logistics. Advantages of outsourcing business activities are reduce operating cost, enhance the productivity of workers, expansion of the expertise and services because organization has sufficient time to emphasizes on the core activities of business. Another article explains that, involving the logistics outsourcing into the business functions plays an important role in enhancing the performance of business. One of major advantages of outsourcing is that a company can easily reduce the geographic partition between the target market as well as the production base. It is a responsibility of outsourcing party to monitor entire costs and time of transportation to provide the finished products from the manufactures to the client as well as it is also to be ensured that the quality of goods would be maintained (Wanchoo, 2010). This article basically emphasize on the retail business where consumers wants to get fresh and finished goods from a company. But in this case there is also a major risk that timing of delivery of goods is depends upon the distance of the transportation. Issues started from then when the time is being taken by the transportation longer than the normal time by which the goods and products will not stay fresh. That it is concluded on the basis of this article that there is a risk of reducing the quantity and quality for unpreserved goods in retain business involved. One more disadvantage of outsourcing in retail business that employees are not much efficient in performing the activities and they are having lack of expertise and knowledge in respect with fulfilling the objective of an organization. Inefficiency includes low prices products used, inefficient in identifying the factors of risk, cut corners, etc these can influence the business activity and for that reason customers could not be able to get the desired products from the organization (Vitasek and Manrodt, 2012). It is to be analyzed that, there are various outsourcing providers available into the market like, developer of service, consumer developer, management of inventory, standards third party outsourcers, products and goods distribution, warehousing, fleet management. This article depicts that the supply chain management outsourcing has a disadvantage of lack of skills and competencies, lack of resources for distributing proper logistics to the third party. Several organization have put less efforts in the process of distribution as there are their outsourcing parties who do the same tasks for them (Madon and Sharanappa, 2013). In the above articles discussion has been done upon the several issues by which organization prefers to hire outsourcing in order to manage their department of supply chain. Some issues are, inefficient leadership associate with supply chain, lack of information related to current market trends, skills deficiency in the information technology department and these issues can be solved by involving the outsourcing within the business activities. According to the issues related to the supply chain distribution is considered as the important aspect by which an organization provides an authority of distribution process to the other third party. Research question There are some questions associated with this project report explained as below: Primary question Do the advantages of the outsourcing business functions greater than with the advantages or not? Secondary questions Q.1 what are the advantages of involving outsourcing into business organization? Q2. What are the disadvantages of involving outsourcing into business organization? Research Design and Methodology Methodology is the portion in which information related with the research techniques and various methods used by the researcher are being provided. In this portion of the research researcher ensures that the way and the tools which are applied by him should be availed in the project so as to enhance the authenticity of the project. Information related with the techniques and methods which will be used by the researcher so as to perform the research will be provided in this section (Vitasek and Manrodt, 2012). Data Collection Techniques Secondary source of data collection will be used by the researcher. Because it is hard to gather the information with the help of primary sources due to the scarcity of the appropriate funds and time. The information will be gathered with the help of various secondary sources like books, journals and various internet sources. Internet will help in providing appropriate set of information related with the research topic and will avail huge data so as to develop appropriate set of content for the research (Kalinzi, 2016). Data Collection Methods Qualitative method of data collection will be used by the researcher so as to evaluate the content of the research. It is necessary that the researcher should use both qualitative as well as quantitative method because it makes the research more effective as well as attractive. But I this case the primary source of data collection will not be used by the researcher due to which it is hard to provide facts and figures related with the research topic. Qualitative data will help in availing the theoretical content which will be gathered from the secondary sources of data collection (Chakravarty, Grewal, Sarker and Sambamurthy, 2014). Research Design Design is the phase which provides direction to the research with the help of which an assurance could be made that the research is moving on the right direction. This is the phase in which proper information related with what a researcher will going to do in the research. Information related with the formulation of the research is being provided. Hence, it could be said that the research will be based on various theories and information availed in the previous researches on the related topic and will help in availing the appropriate set of information related with various aspects of the research (Multiple Objectives and Outsourcing Contracts in IT Outsourcing, 2015). Research limitations There are various limitations have been identified after executing this research proposal. As this report is only emphasizing upon the including outsourcing into the business activities of Woolworth (Multiple Objectives and Outsourcing Contracts in IT Outsourcing, 2015). It has limited resources and time. There are some others limitations of this study are as follows: This research report does not focus upon the specific case study of outsourcing to identify the results of outsourcing practices which id to be performed. In this research, only manufacturing industries have been taken into consideration but not the service providers. Research has not involved the data related with the past trends of the outsourcing. Research plan or Project Scheduling Activities Starting date Finishing date Total number of days Project objective 1 May 2017 4 May 2017 4 Days Research project scope 4 May 2017 9 May 2017 6 Days Literature review 9 May 2017 14 May 2017 6 Days Research questions 14 May 2017 18 May 2017 5 Days Research Methodology and Design 18 May 2017 25 May 2017 8 Days Limitations of Research 25 May 2017 5 June 2017 12 Days Total number of days - - 41 Days Conclusion On the basis of above research proposal it is evaluated that outsourcing has become major concept which is used in performing business activity in todays scenario. In order to maintain sustainability outsourcing plays an important role for the business organization. in this project report, various aspects associated with the advantages and disadvantages of the outsourcing for business activity have been analyzed and comparison is done between these two. On the basis of above analysis, it is identified that practices of outsourcing are not similar for all the organization as this is considered in the financial business. The requirement of outsourcing is generated for the organization which is not too big and having limited resources. It is assumed that outsourcing not always ensures benefits like reduction in operating costs, etc but also possesses various disadvantages like, loss the control of management, loss of skills and internal expertise and involving incapable suppliers. So, i t is essential to understand deeply all the aspects of outsourcing before approaching it References Anon, 2015. Multiple Objectives and Outsourcing Contracts in IT Outsourcing. International Journal of Science and Research (IJSR), 4(11), pp.1583-1587. Banerjee, A. and Williams, S., 2009. International service outsourcing: Using offshore analytics to identify determinants of value?added outsourcing. 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Madon, S. and Sharanappa, S., 2013. Social IT outsourcing and development: theorising the linkage. Information Systems Journal, 23(5), pp.381-399. Tayauova, G., 2012. Advantages and disadvantages of outsourcing: analysis of outsourcing practices. Procedia - Social and Behavioral Sciences, 41, pp.188-195. Vitasek, K. and Manrodt, K., 2012. Vested outsourcing: a flexible framework for collaborative outsourcing. Strategic Outsourcing: An International Journal, 5(1), pp.4-14. Wanchoo, R., 2010. Fourth Generation Outsourcing Ricardian Model on Indian Outsourcing Industry and Need For Next Generation Outsourcing. Prabandhan: Indian Journal of Management, 3(1), p.13.