Essays on Evaluation of IBM and Telstras BPO Outsourcing Agreement Case Study

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Generally, the paper "Evaluation of IBM and Telstra’ s BPO Outsourcing Agreement" is a great example of a business case study.   The analysis focuses on an evaluation of the reasons, and risks for each of the players, as well as recommendations on how to improve the outsourced systems into the future. An evaluation of the client Company illustrates that the outsourcing strategy was ideal as it allowed the company to develop efficient internal systems as well as customer support systems at a reasonable cost. However, the risk of reliance on a third party for customer interaction is a major future operational risk.

On the other hand, the IBM company acquires a development opportunity but faces the risk of loses due to developed systems failure. Thus, it concludes that the Telstra Company should seek to develop internal operational systems, while IBM should seek a reward system based on profitability gains obtained. Project Overview The Overall Telstra outsourcing contract with IBM was a BPO contract. The contract was generated and signed in the early 2000 period. This was a period at which both the Australian and the global communications industry was facing a number of changes.

This was occasioned by two main developments in the industry. The first change was the rise of increased customer awareness and the need for customer engagement Firth and Mellor (1999, p. 201). As such, it was no longer possible for the industry players to play and execute their operations in isolation of the customer. This was a break from the tradition where the customers were traditionally viewed as the end node consumer in the value chain system. In contrast, the new changes in the telecommunications industry required that the customers were actively involved in the value chain process through communication and feedback provision systems, as well as addressing their needs and wants on a timely and satisfactory basis (Roberts, 2005, p. 153). The second strategic change in the industry was the rise of competition and the need to maximize available resources.

As such, there was a shifting phenomenon from the use of traditional manual operational systems to the use of automated IT-based systems. The use of these systems was essential to the industry in that they increased operational efficiency as well as reduced the overall operational costs in the market.

On one hand, the use of the IT systems ensured that all the internal systems such as procurement, customer connection, and finance among other internal operations were coordinated and centralized to allow for efficiency (Sigala, Airey, Jones and Lockwood, 2004, p. 183). On the other hand, the centralization of an organizational procurement process was expected to increased procurement efficiency and as such reduces the overall operational costs in the long-run period. For Telstra, the selection of IBM as its BPO partner was hedged on the company market reputation and the partner's past interactions and relationships.

The key expectation and deliverable end for the outsourcing contract was the development of automated and centralized internal operational systems, as well as the development and provision of outsourced customer care services for its Australian customers and those beyond in the global market. In general, the BPO agreement could be termed as a success to data (IBM Australia, 2014). For instance, in 2014, the partnership was awarded the Excellence in Customer Service award at SSON shared services excellence award in Australia (IBM Australia, 2014) The award is a demonstration that the outsourcing shared services provision contract between the two has been successful to recognizable levels over the years.

The agreement was signed as a continuous contract that has no definite end and termination data as long as the partners oblige and comply with their respective contractual agreement terms in the future (Steiner et al, 2014, p. 7).


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