Business Process Outsourcing at Telstra Corporation Limited - Case Study Example

Business Process Outsourcing Name: Institution: Business Process Outsourcing Brief Description of Telstra Telstra Corporation Limited regularly known as Telstra is Australia’s biggest telecommunications as well as Media Corporation which runs services like pay television, internet as well as mobile access, markets influence, in addition to other entertainment services and products (Telstra, 2014). Notably, Telstra is operating in more than 200 nations as well as over 1300 Points-of-Presence across Australia, and other parts of the world. What’s more, Telstra surfaced from Australian government department, but these days Telstra has totally been privatised. Lots of transition program have been taking place to make it more directed towards sales as well as marketing under the leadership of David Thodey, Telstra’s present CEO. To enhance Telstra service provision across the globe and in Australia, Australia’s National Broadband Network has enforced both regulatory as well as structural alteration to the company. Australian Telecommunications Corporation (ATC) and the Overseas Telecommunications Commission (OTC) were joined into the transitory Australian and Overseas Telecommunications Corporation (AOTC) in 1992. A year later, TEL- telecommunication STRA- Australia was coined subsequent to AOTC being renamed to Telstra Corporation Limited (Telstra, 2014). Worldwide, Telstra has carried out its business operations under the brand name Telstra; while in Australia it conducted its business under the brand name Telecom Australia until in 1995 when "the company begun using Telstra as the brand name globally and locally. Still, ever since 1990s, Telstra has experienced stiff competition from Optus, which was then the Australia's second largest communication company in addition to other suppliers in the telecommunication industry. Thanks to the backing the company receives from the Australian government, the company has managed to hold on to the ownership of Foxtel in addition to fixed telephone lines. Telstra has in excess of 2.6 million clients for mobile broadband and roughly 2 million clients for retail fixed broadband. Statically, the company has more than 39,000 employees’ worldwide (Telstra, 2014). 2.0 outsourcing Call centres Telstra shifted almost 1,500 jobs to India under a strategy meant to make key Australia’s technology operations more efficient in preference of overseas outsourcers. This strategy was aimed at helping Telstra reduce its IT expenditure, and the jobs were exported through contracts between Telstra as well as Infosys, Indian-based Company (Ramli & Smith, 2013). Telstra suppliers have as well transferred their work overseas to cut costs. In the recent move, work performed by IBM was awarded to Infosys (India) in a shift that had an effect on almost 180 jobs (Cai & Kwek, 2013). These days, the dollar continues to be stretched further and further by customers, and so great competitive pressure has compelled some companies in Australia such as Telstra to cut costs by outsourcing with the intention of competing with international companies (Holt, 2011). In modern competitive world, companies have to cut costs so as to present a service or product, and so as mentioned by Kinnie, Purcell, and Adams (2008) labour costs reduction is a suitable means of reducing production cost. In consequence of shifting such IT jobs abroad, Telstra has experienced a reduction in cost in terms of lower costs of labour. This as a result will ultimately reduce the cost of the services and products to the company, the customer, and importantly the company will become more and more competitive (Schneiders, 2008). According to Friginal (2011), the desire for prices reduction is consumer-driven, and so with intense competition drawn in the global market, companies from other countries with reduce costs of labour. The companies with reduced labour costs will compete directly with companies from Australian with higher costs of labour. Arguably, the modern call centre needs a lot of investment as compared to the previous days; thus, heightening the desire for effective outsourcing of the call centre. In this regard, Infosys as observed by Telstra has the management team and infrastructure required for the company’s whole call centre outsourcing needs (Cai & Kwek, 2013). This as per Cai and Kwek (2013) will enable Telstra to get the advantages of a premier call centre devoid of investing a lots of money; thus, enabling the company to spend more on marketing and so forth. Undoubtedly, the technology rollercoaster has put forth lots of pressure on Telstra, but at Infosys they are not just advanced in terms of call centre technology curve, but develop and employ the most highly developed technology to offer Telstra with solutions that are fully integrated. According to Friginal (2011), managing a call centre productively needs unique skills which include telephone network technology, systems sales, administration, and training. Contracting Infosys to offer this outsourcing service has permitted Telstra to profit from its enormous volume of work as well as varied base of customers. At Infosys the company have the most talented tele-services specialist in Asia. When Telstra had its own in-house employees it had to pay them for everyday’s work, irrespective of how active they were. However, through Infosys, the company just pays for what it utilised, indicating that the company must not be concerned concerning expensive employees idling for almost 80% of the day (Kinnie, Purcell, & Adams, 2008). In addition, outsourcing call centres to Infosys has helped Telstra get rid of your its staffing issues. Description of Infosys Infosys focuses in all forms of call center outsourcing services, and importantly they offer comprehensive customer service support 24/7 with standards that are of high quality. Infosys have highly developed and robust infrastructure to handle campaigns for its high-status clients like Telstra. Without doubt, Infosys has the operational expertise, technology as well as resources in position for helping companies like Telstra spread out internationally and surpass their marketing, sales, and customer services expectations (Rouse, 2012). Infosys has an outsourcing paradigm for its customers, and the paradigm has the ability to drive developments in their business, annually. The company aim is to deliver gainful solutions with high level of contentment and success to its clients through and the needed resources to handle a wide range of inbound and outbound services for its clients. The main differentiators of Infosys are Key Differentiators of Infosys include: high-quality standards; knowledgeable and highly skilled workers; ultra-modern technology; well-built domain knowledge; well-built infrastructure with a high level of reliability and redundancy; and transparency in its operations. Without doubt, Infosys BPO has demonstrated potential as well as deep domain know-how in social media, data, and voice business operations. The company’s twelve delivery centres in India, Atlanta, Poland, Mexico, Brazil, China, Philippines, and the Czech Republic offer customer services for many clients in diverse languages. Advantages and Disadvantages of Outsourcing Call Centres According to Talkdesk (2013), company that outsources their call center services to overseas companies save almost 40%. Developing nations like India normally have higher rates of unemployment and lower per-capita income, and this justifies why cheap labor is close at hand for Telstra. Outsourcing call centers have heightened Telstra concentration on essential operations: while customer service was imperative for the Telstra’s success, Ramli and Smith (2013) maintain that it was imperative for Telstra to concentrate on the fundamental areas such as sales, distribution and production. Outsourcing the call center services has allowed Telstra to put more time and effort in the core organizational operations (Samuel, 2013). Besides that, outsourcing has eased the penetration of Telstra into the global market: given that the cost of properties is escalating in America and Europe, Telstra could have spent too much can even on a inconsequential expansion. But through outsourcing its call center services the company has managed to expand its infrastructure as well as sustain employees devoid of incurring enormous expenditure. After outsourcing its call centre services to Infosys, Telstra involved Infosys in a risk sharing agreement, and this has offered Telstra some assurance that risks would be lessened in case of setbacks. In spite of the abovementioned advantages, outsourcing call centre services has left Telstra with less control given that outsourcing entailed shifting the company’s call center services overseas where it has inadequate control over it. Another challenge endured by Telstra is language difficulties bearing in mind that India is not a native English speakers (Samuel, 2013). Confidentiality is another issue that Telstra is enduring bearing in mind that the outsourced service involves highly sensitive information, which has high breaching risk. After outsourcing its call centre services to Infosys, a lot of employees in Australia have lost their jobs as a result. According to Kinnie, Purcell, and Adams (2008), companies that outsource their call centre services like Telstra may have to eliminate the positions of their present representatives of the call center. Even though this is a better way to cut labor costs, it has undoubtedly put the livelihood of some of Telstra’s long-term, trustworthy workers in danger. Aside from leaving the workers without a job, it has harmfully affected the company, from the public relations viewpoint, with recently some Australians demonstrating against the company move to outsource IT jobs to Asia. While internal call center services was completely concentrated on Telstra, outsourcing its call center services to India and Philippines has made the company to lose its focus in one way or another. References Cai, P., & Kwek, G. (2013, February 22). Outsourcing will deliver better service: Telstra. Retrieved from The Sydney Morning Herald: http://www.smh.com.au/business/outsourcing-will-deliver-better-service--telstra-20130221-2euby.html Friginal, E. (2011). The Language of Outsourced Call Centres: A Corpus-Based Study of Cross-Cultural Interaction. Journal of Sociolinguistics, 15(4), 528–532. Holt, N. (2011, March 18). Australia: Telstra’s “Project New”—another round of job destruction. Retrieved from World Socialist Web Site: https://www.wsws.org/en/articles/2011/03/tels-m18.html Kinnie, N., Purcell, J., & Adams, M. (2008). Explaining Employees' Experience of Work in Outsourced Call Centres: The Influence of Clients, Owners and Temporary Work Agencies. Industrial Relations & Labor , 50(2), 209-227 . Ramli, D., & Smith, P. (2013, February 22). Telstra tipped to outsource another 1000 Australian jobs. Retrieved from The Sydney Morning Herald : http://www.smh.com.au/business/telstra-tipped-to-outsource-another-1000-australian-jobs-20140213-32j43.html Rouse, M. (2012, July). Infosys Technologies (Infosys Limited). Retrieved from TechTarget: http://searchcio.techtarget.in/definition/Infosys Samuel, V. (2013). Advantages and Disadvantages of Outsourcing. Retrieved from Outsource2India: http://www.outsource2india.com/why_outsource/articles/advantages-disadvantages-outsourcing.asp Schneiders, B. (2008, October 4). Telstra call centre jobs to be axed in overseas deal. Retrieved from The Age: http://www.theage.com.au/national/telstra-call-centre-jobs-to-be-axed-in-overseas-deal-20081003-4tkn.html Talkdesk. (2013, October 10). The Pros and Cons of Call Center Offshore Outsourcing. Retrieved from TalkDesk: http://blog.talkdesk.com/the-pros-and-cons-of-call-center-offshore-outsourcing Telstra. (2014). About Us . Retrieved from Telstra.com: http://www.telstra.com.au/aboutus/ Read More