Description

Managing Business Process Outsourcing
June 2024 Examination
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)
Ans 1.
Introduction:
As Acme Inc. explores the possibility of outsourcing its customer service department to a
Business Process Outsourcing (BPO) provider in another country, it embarks on a strategic
journey that necessitates meticulous evaluation. The decision to outsource entails numerous
considerations, including cost-effectiveness, access to specialized skills, and the ability to
maintain high-quality customer support. As the project manager tasked with selecting the optimal
BPO partner, thorough due diligence becomes paramount. This process involves scrutinizing
various key areas to ensure alignment with Acme’s objectives and standards. By assessing these
areas comprehensively, Acme can mitigate potential risks and capitalize on opportunities for
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2. Describe the key factors a company should consider when developing a capability
sourcing strategy. (10 Marks)
Ans 2.
Introduction:
In today’s rapidly evolving business landscape, companies are increasingly recognizing the
importance of developing robust capability sourcing strategies to drive efficiency, innovation,
and competitiveness. Capability sourcing encompasses the strategic decisions regarding how
organizations acquire, develop, and manage the essential resources and competencies needed to
achieve their objectives. Whether through internal development, outsourcing, strategic
partnerships, or a combination thereof, the sourcing of capabilities plays a pivotal role in shaping
organizational agility and resilience. This introduction sets the stage for a deeper exploration into
the key factors that companies must consider when formulating their capability sourcing
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)
Ans 3a.
Introduction:
The British Broadcasting Corporation (BBC), renowned as the world’s oldest and largest
broadcasting company, has earned accolades for its outsourcing endeavors, particularly in
business process outsourcing (BPO) and information technology (IT). However, amidst its
successes, the BBC also grapples with notable challenges in its outsourcing initiatives, impacting
its operational efficiency and strategic objectives. This introduction sets the stage for identifying
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)
Ans 3b.
Introduction:
The STAR Forum, as outlined in the case study, serves as a crucial mechanism for the British
Broadcasting Corporation (BBC) to address challenges encountered in its outsourcing strategy.
By bringing together contract managers and sponsors under a unified platform, the STAR Forum
facilitates comprehensive oversight and strategic alignment in outsourcing initiatives. This
introduction sets the stage for exploring how the STAR Forum contributes to mitigating