The Effects of Outsourcing the IT Services for Private and Public Institutions - Research Proposal Example

Research Proposal The affects of outsourcing the IT services for private and public s Introduction The world economy is undergoing a rapid transformation and the recessive trend in the market is increasingly becoming a threat. In such a scenario, the organizations are looking towards cost cutting measures to meet the challenges of the emerging new economic equations. The outsourcing offers an organization to let outside agencies to do some of its non core tasks and work processes. It offers them a very tempting and lucrative business opportunity to continue their core business activities with considerably less recurring cost of managing routine and relatively less creative organizational tasks. The boom in information technology coupled with expanding internet solutions, especially in the fast advancing countries like China and India, opened up avenues for outsourcing at a much lower wages. While it has facilitated recovering of losses incurred during recession, the wider ramifications of outsourcing of IT services have also become a huge concern for public and private companies. 2. Statement of the problem In the era of fast paced technological advancement and rapid globalization, the business dynamics are also undergoing dramatic transformations. The labor deployment is undergoing huge quantitative and qualitative transformations. While on the one hand, outsourcing agencies have provided employment opportunities, the outsourced organizations have also become responsible for the increasing unemployment. The highly pertinent issue of data security and security of official information are critical factors and are important security risks that need to be protected from becoming public knowledge. 3. Purpose of the study The purpose of the study is to gauge the extent of the influence of outsourcing of the IT services for private and public institutions. The study is designed to evaluate the current business activities and HR strategy and identify the non core activities that could be efficiently and effectively managed virtually through outsourcing. The study would also help to evaluate the risk involved in the outsourcing of IT services. 4. Significance of the study According to P.F.Drucker, ‘access to information represents the basic precondition for success of a firm’ (Drucker, 1998). Access to information is vital part of organizational management processes as it not only promotes efficiency and knowledge based discharge of duties by the employees but it a great tool for the management to exploit the available information to improve its performance. Indeed, the emerging business paradigms have made it imperative for the organizations to outsource their routine work. The study would greatly facilitate the changing perspectives of the contemporary business practices, vis-à-vis their non core activities, that are the main reasons for the organizations to outsource them. Apart from the need to be focused in the highly competitive business environment, other compulsions like the need to adopt cost cutting measures, expand core business activities and exploit the technology to gain larger market share in the emerging economy, are important factors that play important role in the decision to outsourcing of IT services. 5. Research Questions and Hypothesis 5(a) Research questions 1. What are the factors or non core activities that can be outsourced? 2. What are the wider ramifications of the outsourcing on the performance outcome of the organization? 3. What are the security risks in IT services and why should they be protected? 5(b) Hypotheses Outsourcing has given the unique opportunity to the companies and organizations to concentrate on their core mission thus widening the scope of research and advancement which is more creative and financially lucrative in the long run. Outsourcing of jobs has precipitated the process of globalization. It has given a new meaning to the word which had hitherto included placement of human resource in multinational environment. It has greatly helped in developing mutual trust and understanding between the countries and hugely contributed towards job opportunities and employment across the globe. 6. Literature review Outsourcing of IT services promotes integration of diverse information and processes them to efficiently deliver the wider objectives of organization. The amalgamation of various information technologies like, telephone, computer, internet, television, mobile technology, office equipment etc. have changed the very perspective of office management. The complex nature of IS, that is capable of storing huge amount of multiple forms of data, is increasingly becoming an indispensable asset for management who are using the services of information system on a wide ranging platforms. While the management decisions are major outcome of information system, it is also used for problem solving, managing customer support and promoting effective communication through regular electronic mails to employees and customers to keep them abreast of all the changes and development in the organization. The various tools used in disseminating information and subsequently utilizing them to establish better relationship and are intended to improve the overall performance. Lacit et al have argued that dealing with foreign vendors have potential to create innovative market opportunities and some of the product and services can be tailored and marketed locally (Lacit et al. 1997). Despite the fact that part of work is outsourced to foreign agencies, working from remote location, the tacit understanding of cross cultural values business ethics goes a long way in creating business opportunities in far flung areas of the world. Baker reiterates that communication barrier and language proficiency are important ingredient for successful outsourcing and that is the reason India scores much higher in the scale of outsourcing provider that any other country in the world (Baker, 2000). The complex nature of information system is one of the main causes that encourage outsourcing. The huge amount of data that needs to be regularly updated is not only a time consuming effort but also has a cascading effect on the overall costs and performance of the product and services as well as on the people who monitor and implement the updating. The wide ranging implications of the IS are critical to the success of the organization and therefore, they require in-depth study to segregate non essential activities which could be sub contracted to outside agency so that organization can be better equipped to face the fast changing global business environment with more equanimity and challenge. It is also envisaged that this would also provides them with the opportunity to widen their scope of research and advancement leading to more creative outcome which would be financially more lucrative in the long run. Outsourcing, therefore, is primarily determined by the financial considerations and business strategy to overcome the constraints of ever increasing competition from the global businesses that are increasingly becoming making their presence felt in the developed countries. Outsourcing of jobs to foreign countries has facilitated faster rate of recuperation from the recession of 2000. The economic recession that started from the mid of 2000 and continued to the mid of 2001 with ‘low industrial production, slumping of GDP and generally leading to large scale personal and corporate debt and over-investment’ (Sennholz, 2006). It was therefore important for the domestic companies and multinationals which were badly affected, to look out for ways and means to recoup. Strassmann, Professor, GMU has stated that ‘Outsourcing is essential for the growth of any economy’ (Strassmann, 2006). The boom in information technology coupled with expanding internet solutions especially in the fast advancing countries like China and India, opened up avenues for outsourcing at a much lower wages. Thus facilitating recovering of losses incurred during recession. Over a period of time, the relevant importance of outsourcing has been acknowledged and the process has evolved to encompass modules that mitigate the conflicts and improve the overall efficiency. 7. Research Design and Methodology 7.1 Framework of the Study The proposed research study would be quantitative in nature but encompass elements of qualitative research also so that better and more accurate conclusions could be achieved. Since the research involves the study of the impact of outsourcing of IT services on the private and public organizations, sample size comprising of around six public and private organizations in the United States would be taken. The study would be taking into account the conceptual model as well as the theoretical model. The samples selected and the questionnaires would be prepared as per the theoretical model of survey and a wider conceptual model of the research would be used to analyze the data. Secondary information sources such as libraries, commercial bibliographic databases for peer review, internet resources and e journals would be used for literature review. 7.2 Research Variable In the study, various non core activities that are outsourced would be the dependent variables and the performance outcome vis-à-vis different elements of IT management would be the independent variables while studying the impact of outsourcing of IT services. Ives and Jarvenpaa have said that global IT management can be divided into four distinct parts: forming an appropriate global IT strategy; using proper global IT platforms; managing international data sharing; and surviving the cultural environment which may be spread across the globe (I&J, 1991). It is important that the organizations ascertain the reliability and compatibility of resources and technology with the outsourcing agency so that customer relationship is not adversely affected. Hence, these are important research variables. 7.3 Data collection and Sample Measurement techniques would comprise of questionnaires and interview schedules. Primary data collection would be collected through detailed and qualitative and quantitative questionnaires prepared, keeping in mind the business viability of outsourcing activity in promoting business performance. The survey would entail questionnaire filled directly by random selection as well as through email. Sampling area would comprise of individuals from enterprises. Special interview schedules would also be used to gauge the responses of the people towards outsourcing activities carried through internet. 7.4 Data Analysis Comprehensive data analysis would be undertaken. Software like SPSS would also be used to analyse the data using different techniques. 8. Strength and Limitations Comprehensive sampling with wide ranging areas which are impacted due to outsourcing of IT services, would be introduced in the questionnaires and interview schedules so that the scope of study is large enough to ensure the success of the research’s aims and objectives. Another strong point of the study is the wide diversity in the sample selected which would ensure wide scope of behavioral pattern. The study is also designed to better understand the innovative practices of the enterprises that they are impelled to adopt due to fast changing business environment. The limitation of the study would be that we would be taking into account only the impact of the outsourcing of IT services on the six public and private enterprises. The other limitation would be that the impact on HR strategy will not considered, especially when it is one of the major elements of outsourcing. (1748) Reference Christensen, Clayton M and Ranor, Michael E. (2003). Why Hard-nosed Executives Should Care About Management Theory. Harvard Business Review. September. 67-74. Gillham, Mark and Wood, Emma and Somerville, Ian. (2007). Public Relations and the Free Organizational Publication: Practitioner Perspectives on the Brave New (media) World. Journal of Communication Management, 11 (3). 198-211. Simmonds, D. and C. Pedersen (2006). HRD: The Shapes and Things to Ccome. Journal of Workplace Learning 18 (2), 122-134. Zapata-Cantu, Laura, Olivas-Lujan, R Miguel, Ramirez Jacobo. (2007). E-HRM in Mexico: Adapting Innovations for Global Competitiveness. International Journal of Manpower, Vol. 28, No. 5. (2007), 418-434. Read More