Can Business Process Outsourcing Provide a Competitive Advantage to Businesses

Different organizational components are present in this changing phenomenon like process, people and knowledge required to be handled carefully in order to avoid any effects on the businesses and organizations. These effects can comprise dissatisfaction of customers, business problems and other issues. If these are not managed carefully, the IT outsourcing strategy might not give up the expected enhanced organizational efficiencies or cost savings.
The aim of the project is to enumerate and objectively assess important factors a business needs to weigh before committing to offshore outsourcing and to come up with a holistic answer as to whether outsourcing is in the best interest of a business or not. This research will use examples from the corporate sector to build a case for offshore outsourcing by evaluating its costs and benefits to businesses engaging services of companies from other countries. Quantitative data for different evaluation factors including firms’ financial performance including revenues, costs and profits, company size in terms of operation and employees will be used for this study. These factors will form the basis of the analysis of whether companies engaging in offshore outsourcing are actually able to operate efficiently and directs their resources well to achieve competitive advantage.
This research would better enable businesses to decide whether or not it would be advantageous for them to outsource some of their work to offshore service providers, it would also pave the way for further research into this area. In addition in contrast to the plethora of opinion based writings on the issue of outsourcing, the conclusions of this research will provide a recommendation based on solid facts.
The Agency Dilemma is the name given to the problems of interest that arise when a principal hires an agent to act on their behalf. In the context of outsourcing, the principal is the client and the outsourcing service provider is the agent. The interests of the client and the outsourcing service provider may or may not match (Tsoukas &amp. Knudsen, 2003).