Bpo industry case study analysis
Focused offers required Existing competition: Lots of local/regional companies IT services ” global majors Acquisition by Ascendant = protection Customers: Ascendant General trends and assumptions Indian BOP growing (35% 2006) Value competition is decisive : Demands and aims of outsourcing clients В«Critical massВ» consolidation and differentiation Growth potential + low entrance barriers more and more entrants Travel drives Doctorate’s BOP business – travel market in EX. & Australia grows by 20% y-on-y (conservative) Travel BOP should be the top priority 3rd parties ownership outsourcing, tasks, future & present bookers Doctorate Doctorate services along travel distribution value chain Pre-sales: Advertising Telemarketing Web content management Sales: Online processing Forms and applications processing Aftertastes: E-mail management Helpless services Customer support E-business and web solutions design/implementation Software services: development, integration, maintenance Corporate Culture Financial operations support Strategic opportunities: 2 stages 1 . Doctorate as Ascendants business unit 2. Doctorate as independent business Strategies: Ascendant + Doctorate 1.
Profit centre philosophy = Doctorate gains more independence and diversifies (3rd party, but primarily new functions and processes 4. Machiavelli game = build central position (as 3rd party provider) in travel BOP via unique services offered to multiple players 2. Perspective cost elimination = outsource anything (or almost that) to cut costs 5.
Deep focus = value-centered outsourcing + 3rd party services within key areas of expertise (not based on fickle cost advantages) 3. Value as target (not cost) = outsource only that which aligns with competencies and strengths 6. Divestiture = growing BOP raked implies falling margins=>strategic alliances are more cost-effective – (Market growth) + Doctorate’s strategy Doctorate is a В«starВ» within Ascendants portfolio: Cash flow is a function of market share To enhance cash flow, 3rd party is vital To utilize star benefits and optimize cash flow, integration is vital as well + (Reel.
Share) – Doctorate’s core competencies are Staff and culture Travel BOP experience (we even do consulting! Transition methodology => Advantage: Doctorate are В«masters of BOPВ» Short-term strategy Outsource processes that align with Doctorate’s focus (travel BOP) Protect Doctorate’s pioneering position (multicultural staff, transition methodology) Long-term strategy Engage in consulting & networking activities Integrate Doctorate fully into Ascendants corporate framework allow for 3rd party operations => this implies the “Deep focus” strategy: Framework to define processes ready for transition What business processes are there? Value chains Dependencies “Demand flows” analysis Which need to be moved (in terms of $ and provided quality)? Which can be moved? Interfaces Bottlenecks Capacities Cost/profit generators Competencies Revenue/costs improvements forecast Staff culture Skills Framework suggests that primary targets for outsourcing are Ascendants Travel Distribution operations, chiefly similar to bookers.
Strategy implementation: the way it works Successful absorbing of new processes requires clearly defined activities Make up transition team – experienced inner specialists – external consultants for – complex projects – client side representatives) Assessment Pilot to check capabilities – competencies – capacities Process mapping from scope and key constraints to interfaces, dependencies and environments; describe activity, functionality, and goals. This ensures efficient identification and assessment of processes in question. Design and build infrastructure – -define target service environment define target service environment – -define service components define service components -performance management system performance management system Supported all the way by Long-term partnerships with 3rd parties to provide consulting services massively Marketing innovations and investment in brand Adaptive, quick business model + innovative R Fostering staff and corporate culture
Maintaining methodology as Doctorate’s core competence Transition faults No formally defined performance measurement system – most processes onshore are subjective and informal “Identical transfer” misconception Business process is not isolated entity: interfaces to be specified, environment to be created and sustained SALSA needed to define and manage processes Hidden costs: managers’ time and effort + redundancies Knowledge management: understanding/expertise is difficult to transfer Competencies/capacities/culture evaluated wrongly 3rd par volume is a danger to quality Ascendant: broad attack+flanks strategy Doctorate: “star” within Ascendant portfolio Core Doctorate’s competencies: staff intelligence; BOP experience; state-of-the-art transition methodology Doctorate strategy: more outsourcing of travel distribution services (Ascendant + 3rd party), focused and value-based, + consulting/networking in this sphere Deeper and narrower focus within value-centered outsourcing logics: differentiate as “masters of BOP” – to be flexible – see trends; protect Doctorate’s position and obtain sustainable brand image Ascendant markets of presence are strongly dynamic => business portfolio reassessment pipeline a must Thank you for your attention Appendix 1 .
SOOT Analysis Strengths: Weaknesses: Good investment capabilities Focused but diversified business portfolio Steady methodologies – slow reaction to sudden changes Doctorate cash flows compromised by Structured transition methodology a) No third-party income (at the moment) Diverse corporate culture b) Leveraged buy-out Low labor costs Global reach Opportunities: New markets emerging (ELI, Australia) Outsourcing is imperative Trend towards consolidation means value competition BOP market grows 20% y-on-y (min) Demand driven by the Web expansion Abundant talent in Indian labor market Conductive business environment draws attention away from competition Threats: Number of players keeps growing South-East Asia – workforce is cheaper, losing labor costs advantage Strategic alliances to mimic our synergistic structure Telecoms/lot progress – a threat to travel industry and thus service suppliers (longer) Appendix 2. Multinational diversification Competitive advantage is supported by Economies of scale + experience curves Internal cooperation Resource exchange between firms and industries Brand sharing Strategic action coordination
