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Business Process Outsourcing

Introduction

                        Globally across virtually all industries, organisations were forced by increased competition and hence often the organisations have to reduce their costs and improve their service levels simultaneously. Hence, often it can be seen that the institutions turn to the BPO or Business Process Outsourcing. Business process outsourcing can be defined as the contracting of business activities that are non-primary and functions to a third party provider (Rai et al. 2012). The services of the Business Process Outsourcing contain various sectors, such as payroll, customer relations, human resources, accounting and many others. The services of BPO or Business Process Outsourcing are also well known as the ITES or Information Technology Enabled Services (Mani et al. 2012). In this assessment, the current situation of Business Process Outsourcing has been done in the context of the case study provided. Along with that, the key organisational problems have been identified as well. According to the problems some recommendations have been made, which upon implementation would attempt to deal with the problems.

Background of the case scenario

            The case scenario shows that the executive vice president of BPO, Allen J Lauren who had the responsibilities to deal with the operations of another segment of BPO, known as Employee Benefits Outsourcing of EBO. Allen J Lauren after waiting for some time while he was deciding the possible replies for the email he got earlier, he called his executive assistant and asked to contact Ethan Erkans. Ethan Erkans was newly appointed by Allen J Lauren as the vice president of operations (Meredith ........

uce their costs and improve their service levels simultaneously. Hence, often it can be seen that the institutions turn to the BPO or Business Process Outsourcing. Business process outsourcing can be defined as the contracting of business activities that are non-primary and functions to a third party provider (Rai et al. 2012). The services of the Business Process Outsourcing contain various sectors, such as payroll, customer relations, human resources, accounting and many others. The services of BPO or Business Process Outsourcing are also well known as the ITES or Information Technology Enabled Services (Mani et al. 2012). In this assessment, the current situation of Business Process Outsourcing has been done in the context of the case study provided. Along with that, the key organisational problems have been identified as well. According to the problems some recommendations have been made, which upon implementation would attempt to deal with the problems.

Background of the case scenario

            The case scenario shows that the executive vice president of BPO, Allen J Lauren who had the responsibilities to deal with the operations of another segment of BPO, known as Employee Benefits Outsourcing of EBO. Allen J Lauren after waiting for some time while he was deciding the possible replies for the email he got earlier, he called his executive assistant and asked to contact Ethan Erkans. Ethan Erkans was newly appointed by Allen J Lauren as the vice president of operations (Meredith and Shafer 2009). Along with Ethan, Jerry Small assistant director of Quality and a Six Sigma Black Belt Candidate was contacted. An immediate meeting was asked to be arranged where Allen J Lauren decided to discuss the ongoing Six Sigma project under Jerry, to improve the effectiveness and efficiency of the Health and Welfare Service Delivery Process. However, this meeting was also an attempt where Allen J Lauren was trying to learn the authenticity of the experience of Sam Regan, who earlier had sent the email to Allen J Lauren.  In the email, Sam told that the services provided by the BPO are far below than the expectations. In the email, he had asked the BPO to conduct a full audit of the transactions processed by BPO with the full cooperation of their review team and it will be performed at the expenses of BPO itself (Meredith and Shafer 2009). Through the meeting and update of the information about the six-sigma project Allen tried to understand that whether the claims are made by Sam Regan was an isolated event or an everyday occurrence. This analysis in this assignment is based on the above case scenario, and the progress has been made accordingly.

 

Problem Statement

Business Process Outsourcing

The Business Process outsourcing is referred to the subset of the outsourcing that is mainly associated with the contracting of the operations and the responsibilities of the particular process of the business to the third party service provider. This is a contracting task of the specific business that is implemented as the measure of the cost saving for the company and also maintaining their position in the market place. As mentioned in the case scenario, the increased competition and the prevailing competitive advantage in the existing market was continuously forcing the organization for reducing their huge costs across all of the industries and thus brings the improvement in the in increasing their primary service levels (Bhat et al. 2015). It has also been reported that many of the organizations gave suddenly turned into the BPO units as this process helps in farming out of various activities of the business to the specialized service providers. As given in the example of 2001, Forrester suggested that the firms are outsourced their process of business are accounted 80% of the outsourced additional process for the coming two consecutive years. The process of the business are commonly outsourced including the finance and the accounting methods, management of the human resource, manufacturing, information technology, claims processing and the marketing (Bontincket al. 2016). The varied factors such as the high competencies, risk mitigations, cost advantages and the improvement in the utilities are joined together to play a significant role in the huge growth of the process of business outsourcing in several industries.

The business process outsourcing involves some contracting that is out of the business processes to the third party either the domestic or the offshore level. It has been obtained from the report that the tight budgets, tight schedules and the crazy work hours, customer satisfaction level and dealing with various demand as well as the high demand of the customers create some challenges in the strategy of the process of business outsourcing. Providing complete satisfaction to the customers is creating a difficult task for the companies that are dealing with the process of business outsourcing (Chou et al. 2015). The several types of the channels in the social media and the increased level of competition in the existing market resulted in maximizing the level of the customer expectation and create a quite challenge for the BPO industry. The other problem is dealing with this process is that the shoestring budget that creates a major challenge for the BPO industries. The companies that are linked with the process of the business outsourcing are expected to give the best results at a very minimal cost. However, they are facing challenges to produce their best results due to the limitation in the number of resources that forced them to bear the maximum cost (Dumas et al. 2013). Other problems may have confronted by the outsourcing companies that are located in the regions of different zones that are very limited in the resources, and the business process outsourcing companies are very limited in their growth factors.

Health and the Welfare Service Delivery Process

In relation to the case study, the health and the welfare service delivery process has administered by the EBO’s group includes the dental, vision, survivor and the medical benefits plan for the 18 clients firm. This group performed the administrative related tasks for providing the assistance to its employees and sponsored benefit plans, updating the dependent information, changing the benefit options and the answr4ring questions that cover the performance of the in-house clients and the department of human resource (Gerblet al. 2016). At the organizational level, the EBO group interfaced the client organization in the two levels. The EBO group used the information to the database for the eligibility of the employees. At first, the database was the first sub process that was a weekly batch process and also update of the benefits of the employees on the update of the weekly based data employees provided. The other sub process is focused on responding directly to the clients for the requests and the inquiries (Lacity and Willcocks 2014). The two-sub process was located on the separate floors that are closely interrelated to the complete solution of the business and achieve the satisfaction as well as expectation level of the employees.

SWOT Analysis

The SWOT analysis of the BPO industry is essential for analyzing the strength and the opportunities of the BPO industries in the existing market.

Strength

  • The availability of the suitable human resources is the major strength of the BPO industries. The large scale of the human resource is able to deliver the significant process, enhancing the operational tools and thereby bring improvement in the tools and the resources (Kavitha and Reddy 2016).
  • The process of the business outsourcing has enhanced the shareholder value by controlling the cost level and thereby avoiding the expenditures of the capital that are closely linked to the purchases and the innovation.
  • It helps in establishing the client relationship and the process management.
  • The other strength is to have the ability to sell the automation and the standardization.

Weakness

  • It is having the high level of the vertical concentration that establishes a weakness of this process.
  • Some industries that are related to the process of the business outsourcing have very limited scope due to the limited regions and the limitations in the available resources (Lacity and Willcocks 2014).
  • The limited growth in the new and the emerging markets as this affects the growth factor of the process
  • Perceived complexity with the small buyers that affect the profitability level of the business.

Opportunities

  • The growth and the target of the new leadership help in the reduction of the debt and improve the level of the cost efficiency.
  • The inorganic growth results in the formation of the non-traditional markets that also affects the growth factor and the profitability level of the business (Tjader et al. 2014).
  • Cultivating and developing the existing base of the customers for achieving the level of the customer satisfaction and reaching to the high level of the customer expectation.
  • Investment in the functional process and the vertical industry helps in creating better opportunities for these industries.
  • Improvement of the geographic concentration and penetrating the existing locations.

Threats

  • The primary threat of the business process outsourcing is the security concern and the secrecy. As stated by Kumar and Jha (2013), the trade secrets and the proprietary information may get leaked to the other competitors and create a threat to the business as the major information may be executed by the other developers that are outside of the country.
  • The acquisition target becomes a possible threat for the outsourcing process.
  • The emerging of the nontraditional competitors who are entering into the markets creates a serious threat to the industry as they reflect ion the declining of the revenue growth and there4by negatively affects on the profitability level of the business.

Recommendations

Apart from the several problems, there are various solutions to overcome these type of problems. Thus possible recommendations are needed to implement by the BPO industries in order to enhance the performance level and maintain the level of the growth. The BPO industries are confronted with various issues and the challenges that affect the factors of the growth of BPO industry and also the expectation level of the customers and the employees. The weakness of the BPO companies is dealing with the high competencies level and the risk factors that particularly affect the growth of the industries (Liu and Deng 2015). Some recommendations are suggested in overcoming the processes of the business outsourcing and enhancing their growth level in related industries.

Six Sigma policies

The six sigma is a much-disciplined approach and the data-driven related methodology that helps in detecting the issues and eliminating them from the processes of the business from the level of the manufacturing to the transaction level and also from the product level to the service level. As stated by Conger (2015), the six sigma approaches have several benefits in the process of the business outsourcing. The main aim of the BPO service is dealing with the final satisfaction of the customer and is having the final mission on the customer essentials as well as meeting all related prospects. The six sigma approaches are helpful for the organization in maintaining the automated response system that helps in continuously tracking the changing requirements of the customers and the changing level of expectations.

  • Six sigma approaches are connected to the enhancement level of the business that that takes the responsibilities of the Human resources division level and the concerned departments (Roeser and Kern 2015). It helps in classifying the professionals of the call centre that are based on the expertise level and the skill level in supporting the management and concerning with the correct job.
  • The approach of the six sigma is also helpful in supporting the improvement of the interior operations of the business process outsourcing and also the customer care centres that helps in reduction of the overall cost of the operations. This helps the business process outsourcing process to avoid the high level of the competencies that create the massive struggler for the operation of the BPO industry and also increasing the level of the customer satisfaction.

The other related benefits of this approach are:-

  • This approach is driven by the customers as this helps in increasing the level of the customer satisfaction by reducing the effects and the competencies. This approach must be focused on the companies for targeting the customer delight and the process of the innovation for reaching to the higher expectation level of the customers.
  • The implementation of the six sigma methodology helps in raising the profitability level and also reducing the cost level by minimizing the defects. These improvements are having the positive impact on the financial results of the company (Rosemann and vom  2015).
  • This approach should be successfully implemented by the business for enhancing the level if the return on the sales growth of the stock value, the growth of the employment and the return on the investment.
  • The variation in the process must be enhanced through the application of the six sigma strategies as it helps in focusing on the process improvement and thereby increasing the outcome of the BPO industries.
  • The application of this policy must be implemented by the industry as it is a very attentive process and helps in maintaining an integral part of the management system by focusing on the top-down approach and preventing the defects.

Supply Chain Management in BPO System

The supply chain management approach is helpful in maintaining the business performance in the existing market level. The innovative growth of the companies is concerning in their efforts and the determining the best route for the development of the products and the process improvement (Hernandez and Ona 2016).  This process is helpful in describing the working approach of the strategic partners of the company sand improving the parts of the related business by fostering the process improvement. The benefits related to the process of the supply chain management in the BPO system are essential for enhancing the performance of the business level and the business growth.

  • The implementation of the process of the supply chain management on the BPO industries must be essential as it helps in analyzing the cost-benefit and thereby improve the margin of the profit level of the business and industries (Nakra 2014). This approach is helpful in eliminating the redundancies from the business and thereby reducing the cost level of the business.
  • As opined by McIvor (2016), this approach is helpful as it helps the expert partners to establish the relationship of the supply chains by reducing the level of the complexity and the cost of the inbound material. This process must be implemented by the companies as this helps in improving the efficiency process and the procurement process of the industries and thereby enhance its growth level.
  • By leveraging the advanced management tools of the transportation, this approach helps the business to maintain the cost efficiencies and the cost-effectiveness of the business and enhance the process of the innovation through the improvement of logistics.

Action Plan

Action Plan

Description

Time Period

Identification and Removal of possible weaknesses

The vertical concentrations of the BPO would be reduced. The scopes for the companies that are related to BPO would be increased through expansion of BPO in region and resources (Jain and Cooper 2012). By removing the limiting factor in the scopes that the companies get, the growth of the company would be increased as well. Moreover, the complexity perceived with every kind f buyer, whether small or big would be nullified to increase the profitability level of the company. Moreover, employee cooperation would be enhanced through a thorough training of employees which hopefully would improve the efficiency of the services provided by the BPO (Malik and Blumenfeld 2012).

7 months

Analysis and rectification of the possible threats of BPO

The security measures of the company BPO would be reviewed and upgraded so that the confidentiality of the data stored remains gets the right amount of safety (Rosemann and vomBrocke 2015). Information, such as trade secrets, proprietary information and much more, if leaked can potentially harm the business which in turn would affect the business of BPO.  Hence, increasing the security measures of the company to help secure the stored information about the companies related to BPO would be a prime priority of BPO. Moreover, the emergence of nontraditional companies provides with potential competitors who pose a serious threat (Lacity and Willcocks 2014). Hence, even the nontraditional companies would be accommodated by the enterprise so that decrement in revenue growth does not affect the profitability level of the business.

11 months

 

Critical Analysis

            From the above assessment, it can be said that the services provided by BPO are mostly needed in the competitive market where an individual company is prevailing in their competitive advantage. The BPO contracts the company operations and responsibilities of their business to a third party service provider (Bentounsiet al. 2012). This forces the organisation to reduce cost across the industries along with improving their services. However, it can also be seen that some of the contracting done by the Business Process Outsourcing or the BPO, is contracted to the third party who is domestic or offshore level. Hence some factors come into play while assessing the success probabilities of the company. These factors are namely, risk mitigations, cost advantages, high competencies, improvement in utilities and so on (Sople 2016). Whereas these factors determine the success level of the companies, it is also important to assess the efficiency level in which the BPO is operating. The effectiveness of BPO can be analysed through customer satisfaction level and the capability of BPO to deal with various demands. 

Conclusion

            From the above study, it can be concluded that the company BPO Inc. has various scopes to improve their services. The company has to work more efficiently as many of other enterprises rely on their work efficiency as well. The several types of the channels in the social media and the increased level of competition in the existing market resulted in maximising the degree of the customer expectation and create a quite challenge for the BPO industry. Not only the business process outsourcing but also, the Health and Welfare Service Delivery Process, which is administered, by the EBO or the Employee Benefits Outsourcing group of BPO must update their working efficiency by following the prescribed action plan. Through the reduction of the threats and weaknesses that have been described in the SWOT analysis earlier, the profitability level of BPO along with their service efficiency can be gained.