Business Process Outsourcing Essay Example

team to share knowledge and learning experiences throughout the transition process. This can be achieved through playback sessions, where the incoming team presents on various aspects such as application, flow, operations, use cases, and business processes. By establishing a clear relationship in the transition process, effective communication and cross-cultural aspects can be addressed. These aspects are often overlooked and can lead to communication challenges and mistrust. To mitigate these risks, cross-cultural training should be provided for customer teams and vendors early in the transition process. Additionally, diligent reviews and inspections should be conducted at every stage of the transition.Ensuring clear and prompt communication is essential for a successful transition process, along with regular reviews and inspections to promptly address any issues that arise. Additionally, creating a positive work environment is important, despite the potential hostility from certain segments in the client's operational environment. Conducting regular team building activities can promote understanding, improve the working environment, and encourage open communication. Openly communicating proposed plans and engaging in team building can help reduce hostility and build a strong team. Once the decision to outsource is made, there are four steps involved: scoping, feasibility study, preparation of the transition process, and finally, execution of the transition process. During scoping, high level objectives are defined and a thorough understanding of the scope and constraints is developed. The implications of human resources after outsourcing must also be considered. The feasibility study builds upon the initial scope and constraints, establishing a delivery framework and addressing the business case and risk management activities. The third step involves preparing for the transition process.The focus of this step is on defining services, which can

be outlined in a contract. It also involves conducting due diligence to verify assumptions and assets during the transition process. Preparation is based on inputs from the diligence phase to account for geographical differences and determine the timing and method of transferring assets, responsibilities, human resources, and accountabilities.

The final step, known as transition or process migration, involves transferring the process to the supplier - either a third party or the client's captive unit. This is the critical moment when assets, staff members, and their respective responsibilities are handed over to the outsourcing partner. The duration of this step varies depending on the required efforts.

After this stage, the outsourcing of business processes becomes operational. Among the four steps, the transition is considered the most challenging and difficult. The success of the entire outsourcing relationship relies on completing these four steps effectively. Following these steps is crucial for a company to establish a successful outsourcing relationship, which is essential for the survival of the new firm (Long, 2005).Tecnovate Growth Strategy

Tecnovate, an outsourcing company involved in business processes, has implemented various growth strategies (Mishra, 2003). These strategies are crucial for the company's survival in the market. At the end of 2003, Tecnovate solely served ebookers, a business process outsourcing facility. Additionally, since 2002, Tecnovate took on support functions and back-office responsibilities for Ebookers' European offices and group management company.

Upon its formation, Prashant Sahni became the CEO of Tecnovate (Sample, 2004). One of his initial tasks was to find suitable workspace for his team. Due to limited space, the team had to temporarily work in rented structures on the roof of the existing offices. Prashant decided against opting for

cheap and remote offices. Instead, he chose to build offices at an industrial estate closer to Delhi, India. The rationale behind this decision was to attract more people and retain customers. By selecting a location near Delhi, the company avoided additional transportation costs that would have been incurred if they had chosen an isolated location.Tecnovate was able to negotiate the rent for their attractive office space to be around 60% of market rates for nine years. They also secured a favorable discount in their agreement that would reflect any price drops in computer and telecommunications bandwidth services. This strategy made sense as these services were becoming increasingly commoditized. With a secure office space and strong connections established, Tecnovate was ready to expand and grow, requiring only one million dollars in capital to start operations. To minimize risks, Tecnovate started with simple and non-core processes and overstaffed those processes for added safety measures. Before engaging in new processes, Tecnovate was careful to establish detailed service level agreements with ebookers, including specifications and workflow agreements. The company also implemented solid project management to track progress and address any issues that arose. Each process was assigned to a function owner who would assume responsibility upon completion of the migration.The financial model agreed upon by the two companies aimed to provide ebookers with a favorable rate of return and Technovate with a reasonable margin (Mishra, 2003). Despite the risks posed by the air crisis and low morale in 2002, Prashant made the decision to proceed with business process outsourcing (Ebookers Tecnovate announcement 2004). Tecnovate, valued at $160 million in India's BPO space, played a critical role in ebookers' strategy

(Ebookers Tecnovate announcement 2004). As Ebookers' captive BPO facility, Technovate offered a range of services including contact center, IT, and BPO services exclusively to ebookers (Ferro, 2006). To expand its customer base, Technovate established travel BPO centers in Montreal and India and even offered certified courses for individuals interested in pursuing careers in the travel BPO industry (Ferro, 2006). By the end of 2005, Technovate was performing well and began taking on additional services and functions. This period of growth also saw Myron Ferro assuming the role of director of operations in June 2005, taking over from Goa as the famous travel destination in India (Ferro, 2006).Ferro's extensive experience in the field made him far-sighted in this sector. His previous positions as associate vice president at WNS Global Services Company and his work with EFunds, Stream Solectron, Raheja Group of Hotels, Taj Group of Hotels, and Inn Hospitality Group of Hotels contributed to his valuable expertise. This experience greatly benefited Technovate and its growth. Ferro was aware of the challenges present in the dynamic business process outsourcing industry and understood the importance of an experienced staff. Throughout the business process outsourcing cycle, challenges inevitably arise, and once a deal is complete, the transition process becomes a testing ground. Specifically, Ferro faced a difficult task with Cendant's processes at the pipeline that needed to be migrated into his facility. Additionally, the emergence of low-cost outsourcing destinations such as the Philippines and Manila posed tough competition for India's process outsourcing facilities. Tecnovate has adopted a fusion philosophy or policies that are observed.Technovate offered outsourcing services in three categories: IT services, contact center services, and business process outsourcing

services in the travel domain (Sample, 2004). The IT services included website design, maintenance and development, as well as website content management systems, support for JD Edwards, and a ticketing engine used by Technovate and its clients. Contact center services provided post-sales and pre-sales support to clients through emails and telephone calls in their native language. The business process outsourcing services focused on financial and back-office administrative services (Long, 2005). To serve both voice and non-voice processes, Technovate developed a multilingual support model. The company had a multicultural staff of over 1000 individuals, with Europeans making up 10% of the team. These staff members came from more than 11 European countries, providing a unique opportunity for cross-cultural knowledge transfer. Clients of Technovate recruited and trained expatriate staff through internet advertisements and employee referrals in their respective native countries.According to Prashant, the former CEO of the company, Tecnovate focuses on delivery rather than dealing in India, utilizing people from all over the world. This approach has led to the development of Tecnovate's fusion BPO philosophy, which seamlessly integrates IT services, contact center, and BPO services within the travel industry. The company's multicultural staff plays a crucial role in enabling this philosophy. The fusion philosophy is seen as a unique example of globalization, where different cultures and processes merge together to generate high revenues and worker enthusiasm. This unique value proposition sets Tecnovate apart (Long, 2005). The company's cross-cultural management further contributes to achieving this value proposition. Other outsourcing providers have attempted to adopt similar philosophies, although not identical to Tecnovate's. These philosophies significantly impact the survival of outsourcing providers in today's competitive market, given the advancements

in information and communication technology (Reuvid et al., 2005). IBM is one such provider with a philosophy that closely resembles that of Tecnovate Company.IBM offers business process services for learning and human resources, which can assist in advancing business transformation by outsourcing human resource functions. The company has a cost-effective approach that consolidates human resource and learning services into one outsourced environment. This approach includes talent advisors and customers, emphasizing a comprehensive approach to human resources. Additionally, IBM integrates technology solutions, actionable analytics, and strong governance within its fusion philosophy. With a global workforce of HR experts and technology solutions, IBM consolidates services like recruiting, learning, payrolls, and benefits. Consequently, employees can easily access human resource services, leading to enhanced customer experience, increased productivity, and reduced employee turnover. In essence, IBM is dedicated to developing a world-class workforce. The company also strives to minimize the total cost of human resource and learning processes through the delivery of high-quality service levels. This parallels Technovate Company's utilization of modern technology in their services.Wipro-Sectramind, similar to Tecnovate, is an outsourcing company that has been in operation since 1945 (Lacity, Willcocks, ; Feeny, 1999). Wipro ltd, the parent company, ventured into the IT industry in 1980 and by 2003, their IT service division employed over 26,000 individuals across 54 dedicated development centers and 30 sales offices. Notable clients of Wipro ltd included Toshiba, Ericson, Boeing, Cisco, and Seagate. Their range of IT services encompassed IT consulting, package implementation, systems integration, and application development. The company specifically catered to the travel industry with solutions for operation management, customer management, and administration. This practice handled various issues such as flight information,

fare searching, travel internet portals, reservation and booking. Spectramind arm of Wipro ltd provided business process outsourcing (BPO) services which covered email management, outbound and inbound voice processing, claims and orders processing, accounting, and Human Resource processing. Delta Airlines was one of the largest BPO clients for Wipro ltd in early 2003. For Delta Airlines specifically, Wipro-Sectramind managed general sales enquiries, rejects and queue handling, frequent flyer program reporting and support, as well as baggage service center in-bound calls.The company Accenture, like Technovate, has a similar fusion philosophy. Accenture is a global management consultant, technology service provider, and outsourcing company that specializes in network security and other services. They believe in delivering innovation by collaborating with clients to achieve high business performance. With deep industry expertise, a proven track record, and global resources, Accenture can mobilize skills and technology to help improve client performance. They have a large workforce of over 123,000 employees across 48 countries, allowing them to operate with diverse cultural backgrounds like Technovate. Accenture offers high-quality performance through their delivery capabilities and unmatched sources. Their fusion philosophy includes partnering with the best vendors, which also applies to their security offerings and supports a strong business case. The company maximizes operational speed using mature and repeatable architecture and methodologies, similar to Technovate. Additionally, they may execute a functional pilot implementation for reduced investment costs, mirroring Technovate's approach. (NASSCOM, 2004)The investment in network security in the company is justified and provides measurable and demonstrable value. Risks are minimized through the use of trusted suppliers for end-to-end enterprise security. In Accenture, knowledge transfer is facilitated through transition and training activities. The fusion philosophy of Accenture

is similar to Technovate. Technovate has faced challenges in BPO transition which have been overcome by understanding that the same processes cannot be transferred directly and by conducting due diligence on client processes.At Technovate Company, a cross-functional team was established to address a task following the submission of a request for proposal. The team, known as the transition team, thoroughly dissected each process, breaking them down into sub-processes for comprehensive study. A process flow was then created. This multidisciplinary team included experts in quality, operations, IT, and finance. The operations individuals focused on planning and scheduling, the IT team handled technology and bandwidth considerations, and the finance department addressed costing and pricing issues. According to Ferro, the transition team at Technovate ensured that the company's expectations were clarified. Another challenge of the transition involved knowledge transfer, which was particularly relevant in the outsourcing process.When the outsourcing process is relocated to countries with lower costs, the individuals performing the task do not relocate with the process. This means that a new team must take over the outsourced process. Documentation can be easily transferred within a company, but the expertise and knowledge of those involved in the transition cannot be easily transferred. Technovate faced the challenge of service quality, which was affected by the time it took for an outsourcing process to stabilize. To address this challenge, Technovate partnered with Cendant Company to establish service-level agreements (SLAs) and formal task-level details for defining and managing the transitioned process. Technovate implemented a service pilot and review processes, requiring a group of individuals to perform functions before going live. Delivery was based on SLA agreements. In the transition process,

there were multiple interfaces that needed to be addressed. Business processes are not isolated entities; they are interconnected with other business processes in the parent company. As a result, when transitioning the process from Cendant Company to Technovate, the interfaces and dependencies were clearly specified.The failures in the transition process in Technovate were mainly caused by inaccuracies in the process flows created by the transition team. Close supervision and examination were necessary throughout the planning process. Once the transition is completed, managers should assess whether the process aligns with a six-year, one-year, or five-year timeline. Timelines should be reviewed after mapping the process onto the original flow.

The acquisition of ebookers by Technovate had a significant impact on Tecnovate's relationship with clients. The services provided by Tecnovate after the acquisition were beneficial to clients, particularly in the contact center. These services included response and call center services, outbound and inbound services, telesales, customer support, telemarketing, database updating, loyalty program administration, product support, activations, collections, email sales, email support, email management, technical helpdesks, and web chat support. These services ensure that clients' issues are promptly addressed.The relationship between Tecnovate Company and its clients has been strengthened, especially in terms of IT services. The company offers various services such as designing, implementing, integrating, and managing e-business, as well as strategy development and web solutions. Tecnovate also excels in internet marketing and ensures search engine optimization. Application software development is a priority for the company to ensure customer satisfaction. Other services, including legacy application enablement, application maintenance and support, and software services for enterprise application integration, contribute to improving customer service and maintaining a strong relationship between clients

and Tecnovate.

With the acquisition of ebookers, Tecnovate expanded its business solutions in the hospitality and travel domain, which are essential services provided to clients. Additionally, integrating enterprise portal design with knowledge has proven effective in creating a strong customer relationship. The acquisition of ebookers also brought the added benefit of BPO services, which are divided into back office administration services and finance and accounting services. These services aim to enhance the company's operations and attract a larger client base.Back office administration services offered by Tecnovate Company include various tasks such as data processing, digitization, product and packet details entry, and content creation. They also provide rules-based processing for claim processing and underwriting. Additionally, online processes like online transaction processing, online sales processing, ticketing, and reservation are available. The company also offers services for issuing forms and other related activities, such as generating order forms and invoices.

Another category of services provided by Tecnovate Company is accounting and finance. This includes services like bank reconciliation, accounts payable, and accounts receivable. Supplier reconciliation services are also available under the finance and accounting department.

These services have helped improve the company's relationship with its clients, ensuring there are no delays in serving customers. Tecnovate Company is considered a pioneer in providing multilingual offshore business process outsourcing services, specifically in the Indian BPO industry. Currently, the company serves clients from more than 11 countries who speak nine different languages including English, German, French, Swiss, Finnish, Dutch, Swedish, Norwegian, and Spanish. This achievement is significant for Tecnovate Company.The Tecnovate Company hires expatriates for entry and mid-level management positions. These expatriates are recruited based on the clients' needs to serve their own markets.

Additionally, the expatriate staff is provided with various benefits such as free fully-furnished accommodation, a caretaker, free local transport, free global travel, subsidized meals, and a special leave structure and health coverage. Other outsourcing providers can learn from Tecnovate Company's practices.