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NMIMS – Managing Business Process Outsourcing

1. Your company, Acme Inc., is considering outsourcing its customer service department to a BPO provider in another country. You are the project manager responsible for selecting the best BPO partner. What key areas will you assess in your due diligence process? What specific steps will you take to gather information? (10 Marks)

2. Describe the key factors a company should consider when developing a capability sourcing strategy. (10 Marks)

3. BBC stands for the British Broadcasting Corporation, is a public service broadcaster which is headquartered in London. It is the world’s oldest and largest broadcasting company. It is recognised under the Royal Charter and operates for state for Culture, Media and Sport. It is often referred as ‘the Beeb’ by UK audiences. It has another nickname also, i.e. ‘Auntie’. Therefore, the two names may be clubbed together to be called as ‘Auntie Beeb’.

The BBC is a productive, extremely capable company which has won many awards for the outsourcing business. It serves a number of facilities like business process outsourcing, information technology, facilities management and serving the clients as per their needs. It generates the maximum customer centric vision so as to achieve maximum value to the company. According to Dave Wyer, Strategic Supplier Development Manager, Outsourcing Yearbook 2015, BBC has ranked best in outsourcing relationships. However, BBC faces some challenges also. The organisation thinks although it is best in outsourcing the business solutions, it lacks behind in many other contracts. In spite of information technology, more services need to be provided such as cloud, robotics, multi channel, single sourced, multi sourced, etc. Therefore, to achieve this, intelligent and proactive management of services are needed. The company always looks for collaboration with existing partners to innovate new technologies and methods.

However, this scenario can sometimes become complex due to market conditions which makes it difficult to smoothly execute all operations together. In addition to this, the license fee is also fixed which makes the task difficult due to the fixed income stream.

Dave Wyer says, ‘if you are expanding the outsourcing with multiple suppliers, then each of it is adding a certain risk with the value to the organisation’. Therefore, all these risks must be identified and monitored clearly for their occurrence. Another factor for eveloping the risk is due to the value leakage, which everyone tries in the organisation to mitigate throughout the life cycle of the contract. Hence, so as to avoid this, close attention is needed at all stages of the business by all the members of the organisation involved in it.

To deal with all kinds of related risks, a forum has been developed alled ‘The STAR Forum’. The BBC STAR Forum is an organisation-wide group dealing with the bringing of all contract managers and the sponsors under a common roof, so as to have a clear vision of the business like what is going on in the business, etc. i.e. the complete inside and outside details of the business outsourcing deals. This forum meet is organised quarterly and attended by all the senior management people and board executives also.

This approach exemplifies the barriers and risks of the BB’s strategic decisions for the business and thereby improves the value for the organisation. It builds more partnership opportunities for the company by engaging the staff efficiently with the designed strategy. Using the forum, robust communication links provide the BBC management to perform portfolio analysis for risks and develop the plan as per the risk for the removal from the system.

a. While achieving success, the BBC also faces challenges. Based on the information provided, identify two key challenges faced by the BBC in its outsourcing endeavors and explain their potential impact. (5 Marks)

b. Explain how the STAR Forum, as described in the case study, helps address the challenges faced by the BBC in its outsourcing strategy. (5 Marks)