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.



Subsequent to the above findings, I conclude with the following recommendations:

(1)    Organisations intending to outsource any function or process should set-up management committee whose mandates will be to study and review organizational internal process and functions with a view to finding functions/activities that are not fundamental or strategic and requiring outside provider.


(2)    It is equally recommended that organizations should select service providers who can accurately identify its internal weakness needed to be corrected, having also an excellent ability to bear the improvement process that will ensure a successful outcome.


(3)    Organisation should clearly state the objectives that outsourcing is expected to accomplish and utilizing it as a yardstick for selecting and evaluating the performance of service provider.

Finally, outsourcing of physical security is a veritable tool for cutting cost and improving profitability, if it is deligently adopted by any organization.



Title page ———————————————————    i

Approval page —————————————————     ii

Dedication ——————————————————-     iii

Acknowledgement ———————————————       iv

Abstract ———————————————————      v

Table of content ————————————————      viii



1.1   Background of the Study ——————————        1

1.2   Statement of Problem ———————————-        3

1.3   Objective of the Study ———————————–      5

1.4   Hypothesis formulation ———————————      7

1.5   Significance of the Study ——————————–     7



2.1   Introduction ———————————————–     13

2.2   Outsourcing (concept) and reasons——————–       14

2.3   Best practice in managing outsourcing relationship for optimum result —    18

2.4   Obstacles to achieving optimal results and steps to successful outsourcing process  ———————–    27

2.5   Vendor selection (Best practice)  ————————     33

2.6   How do firms used outsourcing to control costs and improve performance –   48

2.7   Assessing the economic value of outsourcing using key mutually agreed performance indicators ————-  49

2.8   Summary of the review of the related literature ——      51

Reference  ————————————–    53



3.1   Introduction ————————————————    55

3.2   Research design ——————————————-    56

3.3   Population of study —————————————     56

3.4   Determination of sample size —————————      57

3.5   Source of data ——————————————–      58

3.6   Validity of instrument ———————————–      59

3.7   Instrument for data collection ————————–      59

3.8   Administration of the instrument ———————-      60

3.9   Reliability of instrument ———————————     60

3.10 Data analysis technique ———————————     60

Reference ————————————————–     62


4.1   Presentation and analysis of data ———————       64

4.1.1 General characteristics of data ———————–        65

4.1.2 Analysis of issues of relevance to the research study- 69

4.2   Hypothesis testing —————————————-     87

4.2.1 Testing hypothesis one ———————————-     88


5.1   Summary of findings, Conclusion and

Recommendations —————————————– 98

5.2   Conclusion ————————————————-    101

5.3   Recommendations —————————————-     102

5.4   Implication of the result ———————————      105

5.5   Suggestion for further studies ————————–      106

Bibliography ———————————————–     107





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.



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.



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