ABSTRACT
The major purpose of this study is to access the impact of outsourcing physical security functions in a medium scale enterprise by investigating the extent to which outsourcing physical security functions has contributed to increase or decrease in productivity, whether outsourcing these functions leads to reduction or escalation in costs of operations and to a large extent ascertaining the degree of relationship between physical security outsourcing and profitability amongst others. In undertaking this exercise a sample of 190 individuals obtained through simple random sampling was used for the purpose of this study. The major instrument for data collection was questionnaire designed to provide answers to various research questions which have direct bearing on the research objectives. This instruments of data collection was edited by experts and certified okay for this purpose and was subsequently administered to the respondents for their unbiased opinions. Furthermore, a total of 18 research questions were generated to test the six proposed hypothesis. Simple percentage method was applied to analyze the responses of the target sample and there after, the chi-square instrument was used to validate the hypotheses
In the course pursuance of the above exercise the following findings were made:
– That the primary reasons for outsourcing by this organization include cost reduction, improve profitability, desire for better service delivery, enhance productivity and better staff welfare amongst others.
– That physical security outsourcing has reduced the cost of operations, improved productivity, enhanced better staff welfare, improved organisation’s focus, enhanced better service delivery and has positively affected organisation’s profitability.
– That wrong approach to some fundamental issues such as vendor selection, staff attitude, effective communication and other process bottleneck can viate the expected success of any outsourcing endavour.
CHAPTER ONE INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Vision is the ability to see what change is needed and how it will benefit people when the change is made. The vision of outsourcing business functions to external provider came out of the desire of corporate executives who out of exigency of time purposed to improve company’s focus, enhance profitability/productivity through cost reduction or control of
operating costs and freeing internally available resources for other value adding activities that is fundamentally core to them. Outsourcing as a process involves shelding off of non- core functions that is highly resource demanding or difficult to manage by utilizing outside opportunity available to have top level support that the organization could not get internally. As a contracted relationship, it involves transferring of existing non-core business functions including its relevant physical and human resources to external provider in order to strategically utilize outside resources to perform task previously done in-house. Outsourcing is growing in our environment because business. Margins are thinning out. And once this begins to happen, every responsible business driver to look for ways to maximize profit.
Outsourcing thus provides the avenue needed to get services rendered without necessarily paying fully for it. As outsourcing continued to gain ground and acceptance around the world, organization are beginning to assess what function(s) within the organization can be outsourced and how outsourcing such function would impact on the whole
organisation. They want to know how a decision to outsource a particular function could take them from print A to Point B. they want to know how they can reposition themselves to be managers of result instead of resources knowing that once they outsourced certain function within the organisation; the onus automatically falls on the provider on the agreed result. On the contrary, survey has shown that a large proportion of firms that have outsourced some processes are not happy with the result obtained. The major reasons adduced for this un- satisfactory experience include, poor, quality service, lack of devotion and commitment to duties. Additionally, a seemingly random policy of outsourcing can lead to lower employee morale and by extention decrease in the level of productivity and to a “who next atmosphere”.
Furthermore, the problem of contending with labour union who are of the view that workers are unjustly been casualties have left sour experience on some companies that previously outsourced some of their business processes.
This research is therefore set to focus on the process of outsourcing physical security function on a medium scale enterprise while taking cognizance of these contending views.
1.2 STATEMENT OF PROBLEM
As a business develops, processes become formalised, new systems are introduced and structures become more complex driving up the costs of what are essentially non-core activities. Having an expert take care of non-core facets of a business, which the company itself is less qualified to handle will not only save money but also can actually increase revenue, which will impact positively on the administration of the organisation. Proponents of this view are of the opinion that by stream lining its functions and processes, organisation can lower their costs and drop its price to increase demand for their products and thus attracting new customers and even breaking new grounds. Simplistic and contentions as these views are, reports in some quarters indicates high level of dissatisfaction amongst companies that have outsourced some of their operations processes. Reasons ranging from poor
quality service, lack of commitment and devotion to duties philosophical differences, lower employee moral of retained staff to decrease in productivity were adduced as been responsible for the post outsourcing regrets. Determining or how less a provider can offer a given service is the major problem of this study.
In other words, the codification and determination of service standard and key performance indicators upon which the service provided by the service vendor can be incasured with a view to finding out how well such services have impacted administratively on costs, profit, productivity and enhanced quality service delivery, job satisfaction, improved focus of retained functions is the fundamental problem of this study.
In furtherance, what are the key performance indicator’s And how do we measure effectively the administrative impact of outsourcing physical security? And how do we interpret accurately the information so derived and look beyond the figures for the fact
This research is therefore faced with the issue of how to properly assess the impact of outsourcing physical security functions in a medium scale enterprise using Tonimas Nigeria limited as a case study.
1.3 OBJECTIVES OF STUDY
The main objective at this study is to assess the impact of outsourcing physical security functions in a medium scale enterprise. To assess in un-mistakable terms how outsourcing physical security functions in a medium scale industry have impacted positively or negatively on the organisation by:
1) Assessing the extent to which outsourcing security function has led to increase or decrease in the level of service delivery of the retained functions.
2) Finding out whether outsourcing security functions leads to improvement or decline in the quality of service delivery of the retained functions.
3) Assessing the degree to which outsourcing physical security function leads to reduction or escalation in the cost of security operations.
4) Examining how outsourcing physical security can lead to greater capital availability for core functions.
5) Ascertaining the degree of relationship between physical security outsourcing and profitability.
6) Assessing in categorical terms, the extent to which outsourcing physical security function can lead to improvement in the welfare of core-service staff.
In pursuing the above objectives, the researcher intends to use enhance profitability, improvement in service delivery, reduction in the cost of operation, better welfare for core- service staff and more capital availability as key indicators in assessing the impact of outsourcing physical security function in a medium scale enterprise.
1.4 HYPOTHESIS FORMULATION
The following null hypothese table at 0.05 level of significance are formulated to guide the study.
1. There is no relationship between increase in productivity in core functions and physical security outsourcing.
2. Improvement in quality of core-service functions is not traceable to physical security outsourcing.
3. Physical security outsourcing has no provable relationship with reduction in the cost of security operation.
4. There is no supporting facts that physical security outsourcing can lead to greater capital availability for core-functions.
5. There is no likelihood of improvement in focus and profitability due to physical security outsourcing.
6. Improvement in the welfare of core-staff is not ascribable to physical security.
1.5 SIGNIFICANCE OF STUDY
The study is very important in many ways. First, if an organisation is confused about how to determine the real benefit of outsourcing non-core business processes, the study will go a long way in educating them on the key performance indicators on which the proposed outsourcing benefits by service provider can be measured or the parameter on which evaluation is based similarly, the study will highlight and
enlighten management on the best practices to adopt in crafting and managing outsourcing relationship for value optimization.
Again, the study will highlight reasons why outsourcing fails to deliver on its promise and how management can avoid such pit falls.
Finally, it will provide a platform on which further study in this area where a lot of resources are currently been directed.
1.6 SCOPE OF THE STUDY
The study will focus on the problems associated with assessing the impact of physical security outsourcing in a medium scale enterprise and the possible solutions advocated by people who had faced similar experience to see its relatedness to the present work.
It will also examine the criteria used in such assessment. Other problems outside this scope will not be undertaken because of time constraint and enormous cost implication of undertaken an all encompassing outsourcing exercise.
Again, the study will concentrate only on Tonimas Nigeria
Limited.
1.7 THE LIMITATION OF THE STUDY
As a result of logistic problems, data collection will be restricted to a sample from the accessible population. Hence, generation of the findings to the study should not go beyond the target population.
1.8 DEFINITION OF TERMS
1. OUTSOURCING
Outsourcing is the contracting to external companies or organisation, functions that would otherwise be performed by company staff.
2. SERVICE PROVIDER (Vendor)
Service provider (Vendor) is a firm or organization that provides to other firm services that ordinarily would have been performed internally by staff of the contracting firm because of their expertise.
3. SERVICE LEVEL AGREEMENT (SCA)
A service level agreement is a contract between a service provider (security firm) and a customer (Tonimas) that specifies usually in measurable terms, what services the provider will furnish.
4. PERFORMANCE INDICATION
These are factors such as cost, timelines of service, improve profitability, better staff welfare, etc. that can be regarded as sign which shows you in what way a particular service is being performed by the service provider.
5. PERFORMANCE TESTING
Is the process of determining the speed of effectiveness of a service provider.
6. MEDIUM SCALE ENTERPRISE
A medium scale enterprise is a business venture with total assets of not more than N300 million and a workforce of about
300 workforces.
7. PHYSICAL SECURITY
Are physical measures put in place by human beings to ensure that people and assets are safe.
This material content is developed to serve as a GUIDE for students to conduct academic research
OUTSOURCING SECURITY FUNCTIONS IN MEDIUM SCALE ENTERPRISE (A CASE STUDY OF TONIMAS NIGERIA LIMITED)
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