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Companies should foster environments in which workers feel safe taking risks, even when they fail. This is because failure forms an essential part of innovation in business environments. Taking positive, bold and calculated risks is essential in achieving business goals. Risks put business future at stake, sending to lose time, money or its reputation. However, the business stands to gain the same (Aken, 2012).
Some of the main benefits of taking risks and failure include;
I. They open up new challenges to the workers, which thus contributes, to new opportunities for the business.
II. It establishes new limits within worker’s psychology that is a milestone aid to help them acquire a desire to achieve mentality within themselves, which enhances their level to achieve on higher levels (Aken, 2012).
III. Failure and risk taking can cause workers become more creative which at large helps approach any challenges arising within the business.
IV. Taking risks, helps define business visions and goals. With well-planned out chances, they can lead to positive outcomes, which can result to immense success for the business in whole.
V. Failure within business risks chances can change the average level of undertaking errands and thus come up with a new, progressive and lucrative way, which can in turn lead to success of the business (Aken, 2012).
Risk taking and failure should thus be encouraged within business environments and taken positively rather than regarding them as unwise or dangerous. Similarly, it attributes to the fact that business success results from risk payoffs. However, it is also important considering that risks can also lead to business failure; in such cases, the workers should reframe the risk to a success opportunity rather than failure path (Aken, 2012).
In conclusion, business environment that encourages workers failure and taking risks have high chances of succeeding (Aken, 2012). Often, success of these organizations attributes to their continued risk-taking leads that boost confidence among its workers. Additionally, it helps workers in standing out since they are can learn from their risks hence establishing their ways to success that help the business.
References
Aken, J. E., Berends, H., & Bij, H. . (2012). Problem Solving in Organizations: A Methodological Handbook for Business and Management Students.
Operations management can be described as an area of management concerned with the overseeing, controlling, and designing the process of production and the redesigning the different business operations in the production of services and goods. The operations management often involves the responsibility of ensuring that the business operations are both efficient in terms of using a few resources as a needed and effective in terms of different customer requirements. One of the main operations management areas that have been focused on is business processing outsourcing. This is an upcoming area that has come up in the late 20th and 21st century.
Business processing outsourcing is a key industry in most countries. Most operations employ a good number of individuals, making it one of the top ten employers. Over the past years, there are many agent numbers that have grown and as years go by has the potential of increasing. Because of that, there is a likelihood of a significant impact on the national and local economy. Therefore, the business process outsourcing process composes of those companies that specialize in undertaking responsibility for information intensive business processes on behalf of their customers. Business process outsourcing processes are serious users of telecommunication and IT.
The task variety, which is outsourced, is extensive, but is typically significance though noncore responsibilities like back office administration, customer contact, and data capture. Services focused on voice tend to be more intricate as the outcomes are far more erratic. Etisalat Telecommunication Corporation has been taking part in business process outsourcing which is an important operations management in the United Arab Emirates. However, there have been a big operations problem and this paper is going to explore this issue.
Etisalat Telecommunications Corporation is a service provider for a local bank in the UAE. This company is established to enhance the quality, efficiency and consistency of the bank’s processes and services. The aim of enhancement is to reduce operational and transactional costs, and deliver excellent customer service. The company faced an unexpected operational problem with one of its major clients; the client was not satisfied with the call center service. Thus, the head of the call center decided to take action to solve the problem. This report will discuss the problem, the measures the company took to identify the problem, then the solutions provided by the company.
Etisalat Telecommunications Corporation has been operating since 1976 and has been operating successfully in the Middle East ever since. It is included amongst the foremost companies in the industry, where it has successfully became one of the biggest corporations in the region. Etisalat operates in three different areas, Asia, Africa, and the Middle East with a market cost of $22 billion.
According to Etisalat (2014), their mission is to broaden the reach of the people. The company insures that they own and develop all of their networks to help them and their customers to grow. They envision a world where the distance between individuals does not act as a limiting factor in life (Etisalat, 2014). The company wants to make sure that individuals are able to communicate easily and effectively with family members and friends, regardless the distance between them. Consequently, different businesses, both locally or internationally can reach multiple markets and try to illuminate limitations that are tied to distance. Through innovative technologies, they can achieve their goals and provide opportunities for everyone.
The main telecommunications corporation in the Middle East is Etisalat Communications Company. Amongst the six Arabian states, it is one of the biggest as listed in the Gulf Cooperation Commission. The company has a market value of close to $22 billion and earns yearly returns of over $9 billion. It is a multinational, blue-chip corporation and operates in fifteen countries in Africa, Asia and the Middle East. The company directly employs Forty two thousand individuals.
In 2004, after the company won a second mobile license, which was the preliminary (3G) mobile permit in Saudi Arabia, it began an international acquisition programme. Since then, its rapid expansion rate has earned it a spot among the world’s quickest growing operators. The numbers of its subscribers as registered in 2013 were over one hundred and forty million.
Etisalat communications has helped the United Arab Emirates to sustain its spot as the region’s major center for business activities, global investment together with trade through offering services of superior quality and very reliable.
Due to its rapid implementation of current technology, the company is listed amongst the universal telecommunication enterprises’ innovative pacesetters powering its motherland the United Arab Emirates in the record of top ten countries. For example, the United Arab Emirates was amongst the pioneering counties in the world to get access to a 3D television service called eLife using the company’s fiber optic structure in 2010.
Etisalat pioneered the next-generation operations for both services in wireless as well as fixed-lines and put in adequate fiber-optic wires in the United Arab Emirates that can reach the earth from the moon eight times. The company is working on starting fourth-generation durable evolution communication structures (4G LTE) in United Arab Emirates and Saudi Arabia. The corporation is the current owner of the fastest fixed-line broadband communication organization in the Middle East. It has rates of around 30 mbps. As an innovation leader in business, it has attempted the world’s fastest cell phone broadband service casing speeds of 300Mbps (Krol, 1992, p. 100).
Their capability in technological professionalism has been of great assistance to the company’s substantial market share as it develops over the region. This is especially in Egypt and Saudi Arabia where the commencement of cell phone broadband services, including Mobile TV along with video calls, has changed the dynamics in the market and given priced internet access for many people.
The communication corporation is a pioneer in several developed “green” machinery and it is a regional manager in providing environmental-affable information together with communication solutions. It comprises of the present “Machine-to-Machine (M2M)” solutions, smart construction expertise and alternative power in its local network coverage. The corporation ensures that their infrastructure is up to the uppermost global standards and that its federal fiber-optic communications structure in United Arab Emirates is projected to decrease carbon discharges by over 80% and energy utilization by in excess of 70%.
Mobily’s power is a pioneer in broadband services along with applications in the Middle East is in accordance with international trends in the mobile communications. The Etisalat subsidiary successfully finished attempts for the upgrade of its modern HSPA+ network, checking speeds of up to 42Mbps. The speed is anticipated to be available in main cities, in the short-term, will be first main speed upgrade from the time it became the initial operator in the region to start HSPA+ at the speed of 21Mbps.
The development of revenues in Mobily Q2 is over the anticipations because of the enhancement in broadband profits, which attracted more postpaid clients. Egypt is also another success account. In not more than three years of Etisalat’s operation in the greatly competitive Egyptian souk, the company has outrivaled robust competitors. The first company to start 3G along with 3.75G operations in Egypt, it currently covers 98% of the populace with 2G as well as 3G system and 80% of the public with its 3G systems.
By associating with a number of government and non-government institutions to alleviate the access to learning and health care services through technology, the company is dedicated to the rule of corporate social accountability. The corporation is famous for the support it offers to individuals with special wants. It was chosen a finalist in the 2011 International Cell phone Awards for its visual phone center service which employs the 3G technology along with sign language to offer support to the people who have hearing impairment. The company won further three awards in the prestigious contest in 2012 and after the success the same year Flous another business application for running financial dealings, won.
Over three decades, Etisalat has changed itself from a domestic operator to a global player operating in 18 nations after a selective expansion plan and installing global best practices. This stride is proof of the company’s aim to be among the top ten communication operator globally. The company’s current spotlight is on operational superiority so as to strengthen their position and mine pull out value out of global operations, having grown a robust set of operations in many regions.
It is a main shareholder in Thurava (34.5%), satellite geo-mobile communication networks suppliers. In 2006, the company began a main reconstruction program that led to the de-merger of several of its non-central business entities running under the telecom’s federal and straight management, central services were merged and updated, reflecting the corporation’s transformation from a technology-driven company to a consumer-focused services supplier.
As a branch of their program, in May 2006 it commenced a re-branding crusade, discharging a fresh corporate logo together with identity. The reconstruction of the company ended in the inclusion of “Etisalat Services Holding LLC,” which from 2008 supervises the process of the corporation’s non-telecom business entities with large success stories.
The company has global investments that run commercial units for telecom services external to the UAE and supervises Etisalat shares in the telecommunication suppliers in Pakistan, Afghanistan, Sri Lanka, Benin, Togo, and Central Republic of Africa, Tanzania, Gabon, Sudan, Egypt, Saudi Arabia, Niger and Nigeria.
The global investments entities also run Etisalat small shares in other service suppliers in the telecommunication industry like “Sudatel (a fixed-mobile, and ISP provider based in Sudan), Indonesian based XL Axiata, and Qtel (Qatar-based telecommunications services provider).” The global investments entities and the corporation’s administration team were streamlined in 2011into Etisalat Group and the appointed group chief executive officer was Ahmad Abdulkarim Julfar (Boermeester, 2010, p. 98)
Currently Etisalat Communications Corporation stands as 140th amongst the top five hundred companies in the Financial Times in the globe with regards to market capitalization. It is also positioned by the Middle East Periodical as the 6th biggest corporation in Middle East with regards to capitalization and earnings. The company is the biggest contributor out of the oil sector up to programmes development of the national government in the UAE.
There are allegations that the telecom corporation fractures the rules of net impartiality by choking betting, peer-to-peer and other forms of net traffic to condense the weight on its oversubscribed global links. The impact of this obstruction is most evident in the weekends or moments of high net use. In general, the effectiveness of the nation-wide content sorting out is obscure as a number of technologically proficient clients have established tools and ways to circumvent the content sift like using Tor.
Etisalat pioneered the next-generation operations for both services in wireless as well as fixed-lines and put in adequate fiber-optic wires in the United Arab Emirates that can reach the earth from the moon eight times. The company is working on starting fourth-generation durable evolution communication structures (4G LTE) in United Arab Emirates and Saudi Arabia. The corporation is the current owner of the fastest fixed-line broadband communication organization in the Middle East. It has rates of around 30 mbps. As an innovation leader in business, it has attempted the world’s fastest cell phone broadband service casing speeds of 300Mbps (Krol, 1992, p. 100).
Their capability in technological professionalism has been of great assistance to the company’s substantial market share as it develops over the region. This is especially in Egypt and Saudi Arabia where the commencement of cell phone broadband services, including Mobile TV along with video calls, has changed the dynamics in the market and given priced internet access for many people.
The population of the corporation’s Internet subscribers registered stands up to 1.02 billion. A number of the internet services for the home customers that Etisalat offers include pre-paid along with post-paid dialup internet services, 3G cell phone internet access, broadband internet services and 4G cell phone internet access. The company also operates iZone, which is a structure of WI-FI hotspots in core areas like sheesha cafes, shopping malls as well as restaurants. The iZone service could be accessed by either buying prepaid scratch cards $4.5/hr (AED 15/hr) or if one is using a current account with the telecom provider , owners of dial-up accounts have the AED 3/hour, while individuals utilizing broadband are availed the AED 10/hour option.
ISDN along with dial-up internet access services are payable by the hour, on the other hand, the local and housing cable together with DSL connections have a set monthly charge dependant on speed. Extra internet connections planned for commercial clients hold traffic use arrangements and relatively superior rates when going over the designated bandwidth quota. This has led to negative publicity for the corporation and is a main cause of criticism.
On the 1st of June 2013, the company announced that it would offer free domestic and national high-definition calls all over the UAE. Later on that week, public, corporate, government and private sectors in the states were given enhanced its resolutions when Etisalat began its primary cloud service in UAE.
The communication corporation is a pioneer in several developed “green” machinery and it is a regional manager in providing environmental-affable information together with communication solutions. It comprises of the present “Machine-to-Machine (M2M)” solutions, smart construction expertise and alternative power in its local network coverage. The corporation ensures that their infrastructure is up to the uppermost global standards and that its federal fiber-optic communications structure in United Arab Emirates is projected to decrease carbon discharges by over 80% and energy utilization by in excess of 70%.
By associating with a number of government and non-government institutions to alleviate the access to learning and health care services through technology, the company is dedicated to the rule of corporate social accountability. The corporation is famous for the support it offers to individuals with special wants. It was chosen a finalist in the 2011 International Cell phone Awards for its visual phone center service which employs the 3G technology along with sign language to offer support to the people who have hearing impairment. The company won further three awards in the prestigious contest in 2012 and after the success the same year Flous another business application for running financial dealings, won.
Over three decades, Etisalat has changed itself from a domestic operator to a global player operating in 18 nations after a selective expansion plan and installing global best practices. This stride is proof of the company’s aim to be among the top ten communication operator globally. The company’s current spotlight is on operational superiority so as to strengthen their position and mine pull out value out of global operations, having grown a robust set of operations in many regions.
There are allegations that the telecom corporation fractures the rules of net impartiality by choking betting, peer-to-peer and other forms of net traffic to condense the weight on its oversubscribed global links. The impact of this obstruction is most evident in the weekends or moments of high net use. In general, the effectiveness of the nation-wide content sorting out is obscure as a number of technologically proficient clients have established tools and ways to circumvent the content sift like using Tor.
Business Process Outsourcing (BPO) is a conscious decision by an organization to hire a third party to perform non-core functions to its business strategy. This concept differs from IT outsourcing which is when an organization outsources its IT related activities to an experienced company in application management, data center, and system development. The BPO concept is about outsourcing payroll, employee benefits, and recruitment, including functions such as F&A, human resources, call center and customer service, and accounting (Best, 2011).
Etisalat Communication Corporation is a BPO for a local bank in the UAE. The company’s aims are to provide an exceptional customer service and reduce costs such as operational and transaction costs. These aims are achieved through improving the efficiency, quality, and consistency of the processes and services. What makes the company exclusive is that it provides customized services. In addition, it has deep knowledge of the region and how business is done in the GCC.
The values of the company are the keys for its success. The first value is “we put our customers first”, this value shows that the company cares about the customer’s satisfaction. The second value is “We continuously improve in the pursuit of excellence”, this value shows that the company is always improving. The third value is “We uphold integrity at all times”, this shows the company is loyal to their customers. The fourth value is “We are one team”, this shows that the departments at the company work together as one team. The fifth and last value is “We show respect for all and in everything we do”, this shows that the company respects everyone in and outside the company.
The company faced a serious dilemma with one of its major clients, a local bank, when viewing the monthly review with the Executive Committee (EXCO). The issue was revolving around the call center operations. The CEO of the local bank was very unsatisfied with the service provided by Etisalat Telecommunications Corporation as he said, “you are providing a rubbish service to my customers and my team”.
This was unexpected because the presentation showed that all service level agreements were achieved as per the statement of work. This was a major dilemma for the head of the call center because it was a disappointment, as all the effort he put with the operations managers and leaders to set the objectives, derive monthly and daily targets, and achieving those targets went in vain. The head of the call center thought it was wise to research the source of the issue.
The company has suffered another operation crisis with Blackberry. In 2009 in July, the corporation drove an update to BlackBerry gadgets on the telecom’s federal network, quoting performance enhancements. On the other hand, later it was established that the update had eavesdropping software, made by the American-based software development corporation SS8, which concentrates in surveillance done electronically. It is said that the software made it possible for the corporation to supervise and forward interactions on BlackBerry gadgets within their servers. “Research in Motion,” BlackBerry’s developer agreed that the bit was a type of spyware and gave a deletion patch on 20 July the same year.
On 27th December 2003, both Etisalat communications and Du (Telco) are authorized by the United Arab Emirates telecom supervisory body to begin filtering BlackBerry consumers web access and block illicit content. Because of these reservations based on security and the dividing of illicit seizure for non-voice services in Blackberry, on the 1st of August 2010, the TRA of the UAE commanded Etisalat that the entire messenger, internet and e-mail in the Blackberry devices be suspended on the 1st of October 2010.
On the other hand, an accord between Blackberry’s designer, “Research in motion” and the telecom regulator in the UAE was reached and later they declared that the Blackberry services deferment was cancelled. Currently, the Blackberry services are not functional over WIFI and are obstructed by Etisalat communications. The corporation has not provided any official clarification on this matter. The web services through the browser are functional. However, the blackberry messenger along with the email cannot connect to the blackberry servers using the WIFI links.
However, in regards to the dilemma with one of its major clients, the head called his transformation specialist, and ordered two things to understand why the client was not satisfied with the service provided. The first order was to perform a full diagnostic a full diagnostic on this unit performance as per SOW and compare it to world class standards. This step will help the head to identify the sticky spots of the operations procedures and come up with recommendations to enhance customer satisfaction, define the best practices, standardize processes, and reduce the waste.
The second order is to create a customer satisfaction survey on the services provided by the BPO to the client considering all core functions’ of managers and senior managers. It was an online survey sent to all client management in form of questions to rate the BPO performance in all aspects of the service being provided.
In addition, he called for a meeting with the managers from various functions within the BPO i.e., operations, HR, transformation, service quality, training and work force management. The meeting was a brain storming session to classify the root cause of the predicament on hand.
After an intensive research, the problem statement was:
“Our client is not satisfied with the overall performance of the call center, in the latest survey Aug 2013; the score was 4.5/10 with the least satisfaction on the ability of the BPO to deliver expectation. If the satisfaction level remains as such, the client might terminate the contract and move to another service provider”
Root cause problem solving
After following RCPS (Root cause problem solving) module techniques to conclude the root causes of this problem, the head of call center decided to form a team from the same attendees to fulfill the agreed objectives. The head created four sets of objectives to solve the issue.
The process side is the first set of objectives:
Draw a process flow chart to all the existing processes performed by the BPO
Identify sticky spots and bottle nicks in any process
Reengineer the processes in need
Propose new services to be performed by BPO (call center empowerment)
Sign off the new process from risk and client
Include Process
The system side is the second group of objectives:
Identify BPO ownership over current system development and increase visibility
Identify new system investments with high return and propose to the client
Deployed end to end projects handling from BPO to at least 2 key projects
Include system side
The people side is the third group of objectives:
Define skill sets required to all employees as per world class standards
Assess skills and specific process knowledge to all employees and managers
Apply skills gap and training needs analysis
Provide training intervention to close the gap
Include assessment center
The strategy side is the fourth group of objectives:
Align the BPO non-financial goals with the client’s in a formal goals setting. The client’s main objectives were increase market acquisition by 50% by the end of 2014, increase cross sell ratio to a 1.5 by the end of 2014, and add new three fee-based products.
Plan for three years and identify tactical and strategic objectives
Separate business meetings from corporate governance
Agree on metrics outside SOW to track (client concerns and interests)
After setting in a tracker for the time lines and owners, the team agreed to meet 1 hour/weekly to track and follow up progress. The project was finally launched and it was called “The Customer Experience Enhancement Project”.
One of the problems that arose immediately after launching the project is the conflict between the project manager and his team. The head of the call center whose also the project manager was a perfectionist and this was the main cause of the problem. The team was uncomfortable with his perfectionism approach, as it seemed that nothing the team does would satisfy him, this led the project to stay in the preparation stage. Thus, the team was struggling to get any results before the earliest deadline, so the team members agreed that the project could not run unless the project manager is changed. Since he is from a senior level, he should review the results monthly; they thought that he should rather manage the project itself.
Meanwhile, a leadership conflict taken place inside the operations function between the unit head and the operations’ manager. The difference in leadership and management styles seemed obvious and threatened the continuity of the whole project.
But after solving this conflict (using a difficult interaction technique) definition, the project was managed by both on hierarchy basis, and the project team came back to focus on the deliverable on and the success measurement became results based rather approach based.
In the process of transforming the call center into a world class, the budget was not a constraint so the operations team used all the resources and brought up one sub function capacity from 60 to 70 resources, influencing the P/L (profit and loss account) of the unit with 10% loss.
Once the project was running successfully toward achieving the objectives, the operations managers were worried with the excess capacity they carried, now they have an issue on what to do with the over capacity as ending service is not on the options list. Thus, a relaxation on the policy of internal transfers. Coordinating with line HR to find other units in short of capacity.
Banking business process outsourcing is a sourcing strategy that is highly specialized used by lending institutions and banks to support the business achievement and account servicing actions connected to the lending lifecycle of customers.
The precise business process outsourcing services are frequently presented throughout multi-year service stage contracts for portion or all of the commercial lending, credit card lending, or consumer-lending sector of the fiscal services market. A number of financial service organizations that are larger chose to extend the strategy of their sourcing to include other strategies that are outsourced such as software and ITO systems, training outsourcing or procurement, accounting and finance outsourcing services, software and ITO systems (Edward E. Lawler, 2004).
Banking business process outsourcing typically get their definition from advisors, industry analysts, and leaders in the sourcing industry, such as transactional activities or set of discrete processes that supports the lending lifecycle in various ways. The first way is known as the commercial and consumer lending. Commercial and consumer lending send origination transaction dispensation services, such as records management and remittance, settlement services and clearance, check processing. The second way is back office transaction process management for credit card portfolios and loans, including fraud mitigation and detention, programme compliance and regulatory, reporting, custody services, conversation, portfolio analytics, custom development and interface for customer data.
There is also the new customer acquisition services, which include underwriting, application processing, telemarketing activities, on boarding, customer care, document processing, account opening, and merchant credit verification and evaluation. Lastly, there is the account servicing process for consumer loans or credit cards. Most commonly, these include payment processing services and systems, call center or customer service operations, loan disbursement, product renewal; document management services such as mailing and printing of statements, storage solutions, and networked printing; foreclosure, default management, collections, risk management, and recoveries processing (Fitch, 2007).
The key advantage of business process outsourcing is the manner in which it assists in increasing the flexibility of a company. However, most sources have various ways of perceiving the flexibility of an organization. In the early 2000s, business process outsourcing was all about price effectiveness, which permitted a specific level of flexibility at the time. Because of the changes in the industry and technological advances, companies who decided to outsource their back-office increasingly look direct quality control and time flexibility. Business process outsourcing improves organizational flexibility in various ways.
First, majority of the services provided by business process outsourcing vendors are offered on a fee for service foundation, using business models, which include Remote In-Sourcing or the same software expansion and outsourcing form. This can assist the bank to become additional stretchy by changing fixed into variable expenses. A variable cost structure assist a bank reacting to transformations in a capacity required and does not necessitate a bank to invest in assets, thus making the bank more easily reached. Outsourcing may offer a bank with enlarged flexibility in its resource administration and may reduce reply times to main environmental transformation.
Another way in which business process outsourcing contributes to the flexibility of a bank is that a bank is able to focus on its main competencies, without burdened by the demands of bureaucratic restraints. Main employees are herewith excused from performing administrative or non-core process and can invest extra energy and time in building the bank’s main businesses. The main value lies in knowing which of the key value drivers to pay attention. That is operational excellence, customer closeness or merchandise leadership. Concentrating more on one of these drivers may assist a bank create a competitive edge (Friginal, 2009).
A third manner in which business process outsourcing increases the flexibility of organizations is by increasing business processes speed. Supply chain administration with the effectual use of supply chain associates and business process outsourcing enhances the speed of many business progressions, like the throughput in the case of an industrialized company.
Lastly, flexibility is seen as a phase in the managerial life cycle. A bank can uphold growth goals whilst evading regular business bottlenecks. Therefore, business process outsourcing allows firms to retain their agility and entrepreneurial speed, which they would if not sacrifice in order to become proficient as they prolonged. It avoids an internal transition that is premature from its informal commercial segment to a more bureaucratic manner of operation.
A bank may be able to develop at a faster speed as it will be less controlled by huge capital expenditures for equipment or persons that may take years to pay off, may results to be a poor contest or become outdated for bank overtime (Mehrotra, 2005).
Even though the above-mentioned arguments favor the view that business process outsourcing increases the organization’s flexibility, administration needs to be cautious with its implementation as there are concerns, which work not in favor of these advantages. Some of the problems arising in practice are unclear contractual concerns, unforeseen charges, changing requirements, a failure to meet levels of service, and a dependence on the business process outsourcing, which lessens flexibility. Therefore, these challenges need consideration before a bank chooses to engage in business process outsourcing.
A further concern is that in most matters there is a little that distinguishes the business process outsourcing contributors other than size. They always provide services that are the same, leverage the same technology stacks, have the same geographic footprints, and have the same approaches for Quality Improvement.
Menace is the main disadvantage with Business Process Outsourcing. For example, outsourcing of an Information System can cause security menace from a privacy perspective and a communication. For example, security of European or North American company data is not easy to maintain when controlled or assessed in the Sub-Continent. From an acquaintance perspective, running costs underestimation, a changing outlook in employees and the main risk of losing self-determination, outsourcing leads to a dissimilar relationship between contractor and an organization (Best, 2011).
Threats and risks of outsourcing must, therefore, undergo management to accomplish any benefits. In order to manage outsourcing in a manner that is structured, avoiding any threats, maximizing positive results, and maximize risks, there should be a set up of a business continuity management. Business continuity management consists of a set of steps, to manage, control, and successfully identify the business process that can be or are outsourced.
For all business sizes and in nearly each industry, contact or call center now plays a key role throughout the cycle of the customer. From acquisition to identification and services. A dynamic contact center orchestrates capabilities and resources to align with the expectations of customers and business objectives. It enables a rapid respond of banks to the altering dynamics of the business surroundings and customer service (Mehrotra, 2005).
According to some of the researches conducted, statistics indicates that global front office business process outsourcing services, of which call center outsourcing is the main type, have grown at more than 10% each year since the beginning of the year 2005. There is an accelerating trend since the current recession. In addition to that, there has been a main backlash adjacent to off shoring, where the location of the outsourcing company is in a different country amidst heavy criticism from local governments and many states as well as huge numbers of frustrated consumers. The result is most of those jobs are returning to America.
So what makes banks increase their third party call center service usage? For most years before 2011, the principal reason given for devoting in call centers was constantly to reduce operating costs. On the other hand, interestingly, current call center research has pointed towards escalating the satisfactions of customers as the brand number one main concern for call center investments.
It will be suitable to first identify what center outsourcing services cover. Bank call center outsourcing contributors, depending upon their degree of boundary to the main data processing system can offer a very complete level of inbound call hold up to the bank’s customers 24/7. Furthermore, they have the ability to deal with customer’s web chats and emails. An outsourcer has the ability of implementing the bank’s internal customer services efforts by taking overflow calls throughout the workday together with weekend calls or after hours. This co sourcing model is by far the mainly frequently selected choice among different financial organizations. The bank has the power to decide the volume of customer calls they wish to send to the third party company. Some of the banks often chose to send all their calls (Fitch, 2007).
Inbound customer services web chat or call or mail support is primarily what is preferred to in this paper, despite the fact that third party givers may provide extra services to include outbound calling services, collection services, and online consumer loan application. Whenever the third party inbound contact support vendor is used to supplement the bank’s customer service department or principle internal call center, a more suitable term always used is co sourcing. On the other hand, the word out sourcing comes in whenever a third party presumes the main inbound call center responsibility for the bank.
Distinctive outsourced, inbound call services offered in banks varies. The inbound call services include investigation into full customer account records including loans, knowledge base of categorical bank information, and investigation into full customer account collection including loans, actual- time interface to the bank’s main processing system, and electronic ticketing to track and log to all customers calls. Additionally, the task include viewing of notes from customers, delinquency information, ACH transactions, NSFs, bank’s marketing promotional messages, and system alerts. Last, but not least, the task also promotes transactions such as making loan payments, loan advances, debit card, pin reset, credit card, calculating dividends, and stopping payments (Friginal, 2009).
There are various lessons learnt from outsourcing. One of the lesson leant is starting with something small then later building up. Starting with few numbers of persons enables the bank to make certain mistakes and later learn from the same mistakes. It also assists in creating a rapport with the bank’s various departments right from the beginning.
The second lesson learnt was the involvement of the customer. The customers are the main pillar of the bank. Their involvements are essential since it helps fasten the objectives of the bank. In addition to that, the bank learnt that building a sense of community was crucial for its growth. Outsourcing industry is usually full of young persons and the bank is no exception. The average age of the staffs should be 25 and staff members should be allowed in the banking industry the minute they come out of an environment that is competitive. The banks need to temper the client’s expectations. The key is installing the objective of eminence work and creating a community sense in the organization.
There are several growths in business process outsourcing industry and the growth is positive though there are few disadvantages that might be witnessed if not managed properly. From most research conducted, it is quite clear that business process outsourcing is likely to enjoy a yearly compound growth of more than 8% by 2017 (Fitch, 2007).
On the issue of career in a business process outsourcing, many transformations have been witnesses in the executive jobs responsibility. A business process outsourcing staff’s work can be classified broadly into non-voice and voice. The voice business process outsourcing executives have the responsibility of taking the outbound and inbound calls that include taking customer’s sales and queries. On the other hand, a non-voice business process outsourcing executives’ ranges from human resources services, data processing, and research to offering tech support. Employers are putting in more efforts to offer opportunities that last longer for their employees. Career in business process outsourcing is not viewed anymore as a stopgap option rather; it is viewed as serious career choice that attracts most businesses and persons to it.
The last lesson learnt is that quality is the main thing. Quality maintains the banks customers. Therefore, quality is the main factor that determines the success of the bank or banking business. Therefore, it essential for banks to try to shun a short-term outsourcing (Edward E. Lawler, 2004).
From the discussions above, it is quiet that to resolve the many uncertainties and doubts that arise whenever there is an outsourcing process; there are main factors that a bank should consider. Basic issues like risks, costs, change management, operation viability, and the selection of the best-fit provider are some of the issues that must be examined for success with appropriate outsourcing.
On the issue of cost, the tenet to often uphold is that long and short-term costs, risks, and investments often deliver a balance that is so positive in favor of the outsourcing process. The first figure that is always used as a reference is the price that the provider bid, although companies ought to acknowledge that the external cost is not the whole assessment of outsourcing. The bank must acknowledge that inside cost are also gained which must not only be provided, but also added to the provider’s bid cost. Most often, wrong assessment of internal cost is what always results to failure in outsourcing.
The second issue is operational viability. The most frequent reasons for addressing outsourcing are optimization of task and costs saving. In general, the key processes outsourced are those considered managerial and which add no value to the bank’s business. The first analyses performed by the bank is to detail all activities and points of the outsourcing process, identifying the major issues. For example, in payroll outsourcing it is important to define the dates and the pay role cycles, validations and security in data.
On third issue, which is risks, there are two categories of risks that need assessment, the first risk is what the bank is likely to face whenever service provider quits providing service. Some of the procedures for controlling these menaces are choosing providers who pose good status and on the same note, have a customer foundation that is solid. Finally, the provider should have the ability to regain information at once.
The second risk that the bank should try to avoid is the likely error created by the service provider and the consequent impact of the error to the bank. Unlike to what may seem, for this kind of risk, outsourcing provides additional promises than in house operation.
Lastly, there is change management. The departments of human resource tend not to be geographically detached and they have simple structures. Because of that, revolutionize management connected to outsourcing does not usually involve special troubles. Most often, the kind of transformation results from the requirement for some other transformation that materialized in the bank, such as the need to drift to another information structure, recruitment of proficient, and management transformation.
With a harsh economy inserting pressure on technology and margins empowered customers asking for best in class service, banks are struggling to uphold profitability. Business process outsourcing is the bank’s strategic steps when looking to reduce costs, streamline processes, improve service level, and gain admittance to the best in class processes devoid of investing in requisite technology and skills.
Currently, bank customer’s wants to collaborate with business process outsourcing vendors who cannot only add value to their company, nevertheless at the same time offer competitive differentiation. To accomplish these needs, business process outsourcing business is developing from a labor arbitrage shift and lift model towards a significance driven Utility model.
A question likely to be asked is whether the growth of business process outsourcing has affected the recruitment trends in the bank industry. The business processing outsourcing is a condition of continuous changes with transformational demands in business and technological development. There is an enormous pool existing, which is reasonably good in niche skills and technological knowledge. The industry does not only put efforts on voice support thus the significant rise in opportunities for professionals such as doctors, analysts, bankers, chartered accountants and even legal.
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Transactional styles are often more concerned with the maintenance of normal flow among operations. Transactional leaders often use disciplinary power as well as several incentives in order to motivate the employees in the workplace to perform their best. In fact, the term transactional means that the leader essentially motivates the employees at the workplace by making an exchange of rewards for increased performance (Bryant, 2003).
Managers in transactional leadership are generally concerned with making sure that everything flows smoothly on a day to day basis as compared to a long term strategic goal. Transformational leadership on the hand goes beyond the management of everyday operations and it involves activities such as team building, motivation as well as the association with workers at diverse levels of an organization in order to try and achieve change for the better (Bono, 2004).
The managers in transformational leadership often sets foals and incentives in order to push their employees to increased higher performance levels while at the same time providing room for professional and personal growth for every employee. Front-line supervisors are much more effective when using transactional leadership in order to ensure that all their stations are running smoothly (Bass, 1990). They are concerned with the day to day operations of the company.
The middle managers can also use transactional leadership in order to ensure that productivity amongst employees is increased over a short period of time. The frontline supervisors might create strategic missions and pass them down to the managers to implement them. This is a type of transformational leadership. The middle-level managers should have the ability to design as well as communicate effectively to the employees strategic missions that will spur transformation amongst the employees and consequently increasing productivity.
References
Bass, B. M. (1990). From transactional to transformational leadership: Learning to share the vision. Organizational Dynamics, 18(3), 19–31
Bono, J. E., & Judge, T. A. (2004). Personality and transformational and transactional leadership: A meta-analysis. Journal of Applied Psychology, 89(5), 901–910
Bryant, S. E. (2003). The role of transformational and transactional leadership in creating, sharing and exploiting organizational knowledge. Journal of Leadership & Organizational Studies, 9(4), 32–44
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