Strategic Outsourcing at Bharti Airtel Case Solution
1. What do you see as advantages and disadvantages of such agreements?
Advantages of outsourcing:
- Completely profit by India’s surprising growth signal
- The Indian market for Telecom is growing exponentially therefore,outsourcing will help them to match this development.
- The new system set up in any circle takes around 6 months least and Bharti is not in a situation to lose the customer base.
- There is no reason to pay the sellers before their services therefore,it will also increase Bharti’s income.
- For IT services, they will get the updated services in a way that they may save their wastage of cash on outdated virtual products.
- It can reduce the chances of facing the issue of getting more labor which would be a requirement for the expansion of the business, therefore this is a problem for the HR.
- End to end management in the event of IT operations.
Disadvantages of Outsourcing:
- Core competency in operations being moved to vendors
- It will expand its reliance on vendors.Moreover, after some time it can conduct a meeting with the vendors.
- It is exceptionally a difficult choice in a country like India to lay off or exchange 1000 representatives.
- It is a service providing business and it will add one more channel between customers and organization due to which the clients’ satisfaction may be affected.
- No past arrangements of such outsourcing have taken place, due to which the risk is high.
2. How do the different outsourcing agreements work towards building these core competencies?
It will help the company to overcome the issues related to operational, information technology (IT) and human resource (HR).Moreover, it will ensure the future growth of the company as well as the vendors would be able to generate more profits from these agreements. It would also help to reduce the conflicts between vendors and would be able to increase the demand by proper planning process.
The outsourcing agreements would lead to an increase in the productivity in future as it would make the company more compatible with the help of acquisition. Along with this, it will increase the chance of hiring more people in order to manage the network. Therefore, the agreement would have the objective of attracting and retaining the best labor.
Therefore, the mutual agreement would lead to a long term contract relationship and it would be beneficial to the company. In addition to this, there would be a worker to trader relationship by focusing on all the issues of all the parties.
3. What are the pros and cons of outsourcing agreements for a company in an industry that considers technological superiority an essential element of competitive strategy?
Bharti had numerous connections with network suppliers such Nokia, Siemens and Ericsson. Bharti was open to working with many suppliers as the environment was also exceptionally competitive between the companies.
The telecom system frameworks and programming are related to the essential working of telecom connection and exchanging system.The customer service data frameworks allow the gathering of information regarding the service quality as provided by the customers. The agreement would lead to an improvement in the programming and hardware architectures including inside projects such as billing, security, client programs etc.
Bharti’s Interest: Maximum coverage with minimum number of equipment.
Vendor’s Interest: Profitability through maximum sale of equipment.
Vendors often try to offer more equipment. An ordinary system utilizes just 60% to 70% of the available capacity and around 35% overabundance ability to keep one venture to satisfy the clients’ demand. It also causes a delay during the time the need for additional limit is distinguished and the time it could be up and running. The IT frameworks of the organizations are incompatible with the existing systems and certain applications such as fraud management are not delivered by its current dealers like IBM, HP, and Sun Micro systems etc………………….
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