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Real cases of outsourcing services with BPO tools
“BPO started in the 1990s in India; consists of outsourcing business processes to a third party with a series of tools to control the service. "
Two real cases of outsourcing services with BPO tools will
be explained and how a BPO provider is identified with the 7 steps of an
outsourcing process.
BPO: eBookers
One of the most famous cases of process outsourcing is that
of travel agencies, of online reservations ( flight bookers ), becoming
eBookers. Harvard University has made a case for this company as a BPO business
model.
The online travel agency business already moves 27 million
dollars. The Americans set the standard, but in Europe, companies like
eBookers, Lastminute or eDreams compete with them. Cost and innovation are key
in an environment of declining margins.
The eBookers agency is listed on the Nasdaq and is, together
with LastMinute.com (its great rival), the European leader among online travel
agencies. Its CEO, Dinesh Dhamija , still owns 42% of the company and that
makes him think about it a lot.
According to The Economist, Dhamija , to survive the 2001
crisis, founded Tecnovate in Delhi , his own call center and technology
outsourcing company. On October 2, it sold 6.3% of the company to investors in
order to turn it into an independent business center, and has increased its
workforce by more than 2,000 people.
Dinesh does not consider himself an internet advance, but
rather a travel specialist who soon understood the advantages of the online
world for a sector that has already become number one in e-commerce sales on
the net. Dominated by US companies such as Expedia, Travelocity or Orbitz , the
market for online travel agencies has reached 27,000 million dollars this year.
How has Tecnovate managed to provide the necessary service
to countries outside the English-speaking world, such as Finland? Dinesh's
imagination has given him the solution: he has recruited Finnish students to
provide the service from Delhi during his holidays. Today, this pioneering
effort means that Tecnovate has workers from more than 50 countries operating
from its call center in Delhi .
Support costs have dropped dramatically with savings of
several million dollars a year, and eBookers is poised for the arrival of the
big competitors from the US , with their first profits just around the corner.
As in almost any industry, the size of the American
competitors makes them fearsome, and both eBookers and LastMinute.com, as well
as other companies more focused on southern Europe (although already with offer
in the United Kingdom, such as eDreams) do not allow to be a potential purchase
target for American leaders.
What this small exhibition shows is how a BPO process can
make a company much more competitive thanks to the concept of flexibility and
specialization of this type of services.
BPO vendor selection case: Walt Mart
Walt Mart requires an outsourcing of services in India to
increase its positioning, not for a reduction in costs but for a globalization
of its services ; To do this, look for a BPO provider . It has been testing a
series of micro projects with three vendors TCS, Infosys and Wipro. Among them
three will be the decision to award a contract of 500 million dollars.
Walt-Mart consultants will determine the steps and issues to
consider when selecting vendors.
Reasons for outsourcing: BPO
The first thing to determine is what Wal-Mart wants from an
outsourcing process, responding to the 4 alleged:
1. Why? It
is not due to a cost reduction, it is due to a process of globalization of its
services.
2. Who?
Strategic decision of the company's Management Committee. It is reduced to a
list: TCS, Infosys and Wipro.
3. How?
Through BPO processes in India.
4. When? In
the coming years, determined by an expansion strategy in India.
What WaltMart is looking for with outsourcing, as with any
outsourcing, is an improvement in services.
Steps to take for outsourcing and aspects to consider
All outsourcing process is divided into 7 steps:
1. Initiative planning . A risk analysis, project
management, external advice and goal setting must be done. In the case of
Walt-Mart, special consideration must be taken:
• Risk
analysis : considering financial, operational, technological and strategic
aspects. Walt-Mart must not lose control of its processes and the supplier must
be stable.
• Setting
objectives : the objectives of the organization, outsourcing objectives plan,
acceptance of the objectives by the organization, etc. must be clearly set.
Walt-Mart's goal is clear: globalization.
2. Strategic implications . The organization chart must be
clearly defined, what is considered the core of the business, how the company
is going to be restructured with outsourcing and align the outsourcing with the
company's strategy.
3. Cost / benefit analysis . You should compare current
costs against future costs and calculate financial returns. Although for
Walt-Mart outsourcing is not cost-based, it should not exceed current costs.
4. Selection of suppliers . It will consist of the following
phases: suppliers, RFP, evaluation and selection:
• Suppliers:
the list is three, the most indicated, since micro-projects have been carried
out with them: TCS, Infosys and Wipro.
• RFP must
contain all the needs of Walt-Mart
5. Terms and conditions . The terms and conditions must
contain the following: scope of services, performance, control management,
payment conditions, provisions, confidentiality, licenses, subcontracting, etc.
6. Migration of resources . It falls within the
restructuring part of Walt-Mart, it is necessary to study in detail how
resources are going to be migrated, both human and assets.
7. Relationship management . Monitoring and follow-up of the
company process and problem management.
The most critical steps WaltMart should consider in supplier
selection can be defined as risk analysis, goal setting, strategic
implications, and supplier selection.
BPO basics
In this section, some basic BPO processes will be studied:
what it is formally and important aspects.
BPO (Business Process Outsourcing) is a service for
outsourcing operational processes from a company to third parties so that they
can execute them. The processes
BPOs can be divided into process, technology, and human
resource objectives. Each of these objectives is detailed below:
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