Download - Tecnovate Case Study
TecnovateChallenges of Business Process Outsourcing
Tara ArdMarcus Gadson
Kunpeng LiJason Little
Emmie MabryHarris Weinstien
Business Process Outsourcing (BPO)
BPO is the process of contracting of the operations and respnsibilities of specific business-related function to a third-party service provider
Functions:› HR› Finance & Accounting› Customer-related services
BPO Continued Nearshore Outsourcing: BPO that is
contracted within or in close proximity of a country’s company.
Offshore outsourcing: BPO that is contracted outside a company’s country› The nation of India contributes to 63% of
the world’s offshore outsourcing› Tecnovate is an offshore business process
outsourcing subsidiary of ebookers.
Ebookers, Tecnovate’s Parent Company
Founded in late 1970s by Dinesh Dhamija as a small kiosk
1983: Agency became known Flight Bookers 1996: Began selling tickets on line and Flight
Bookers became the first on line flight service in the UK
1999: Dinesh launched the subsidiary ebookers and went public
2002: ebookers focused on growth and expansion through mergers and acquisitions
Tecnovate- Subsidiary April 2001: Prashant Sahni notices ebookers
operating costs are excessive and wants to cut costs through back office operational costs
Dinesh and Prashant are both from India thus proposing outsourcing to India
Focused on small group of on line portals, settling on a Delhi-based portal called “Make My Trip”
This is a fully operational 50-seat BPO facility that became Tecnovate-Sahni 1st CEO
Technovate Fusion BPO Business Process Outsourcing
Company› Contact Centre Services
Pre and Post Sale Customer Support› IT Services
Website Design Development & Maintenance› BPO Services
Covered Back Office & Administrative Services and Financial Services
Tecnovate Expansion Prashant’s Major Steps
› Acquiring office in heart of Delhi› Agreement in telecommunications and bandwidth
After September 11, 2001: The airline industry falls, but still take on a risky investment that earns a higher rate of return than anticipated
2004: Began providing BPO services to 3rd Parties and Travelguru
2005: Cendant purchases ebookers
Cendant Tecnovate will serve as a captive for Cendant Cendant has a huge client base
› Avis-Budget rental companies› DaysInn› Super 8 Motels› Travelodge› Wingate Inn› Wyndham Hotels & Resorts› Baymont Inn & Suites› Century 21 Real Estate› ERA Real Estate
Problems & Sub-Problems
Transition from Cedant to Tecnovate
Cultural Differences
Interfaces & Dependancies
Competition
Inaccuracy of Process
Flows
Service Quality
Interfaces and Dependencies Many new diverse processes due to
Cendant’s complex book of business› Must be able to streamline all processes
and understand how they interrelate› Time consuming as is – Will Tecnovate be
able to evaluate all new processes in timely manner?
Example:› Travel booking dependencies:
Pre-booking, Booking, Post-Booking all need to “communicate” with each other
Cultural Differences New management and owners
› Might not get along well New business in countries Tecnovate
previously not involved within› Will require more staff from those countries
Time and costs to recruit, train, etc. New issues must cope with including?
› Local business laws, Tax laws, language barriers, Customer acceptance, etc.
Service Quality Added complexity of processes and
added number of processes places strain on service quality› Must effectively balance time and quality
while still meeting SLA agreement with Cendant and satisfying customers
Other Sub-Problems Increased local and foreign competition
› More local BPOs› Cheaper to set up a BPO in other countries
like Philippines than in India Continued inaccuracy of process flows
by Tecnovate› More processes than before, less time to
devote, more diverse set of processes› New processes effect older processes
Might make old way of operating ineffective
Key Facts Cendant is the world’s largest provider of travel
and real estate services Ebookers is Europe’s second largest online travel
agency Tecnovate is ebooker’s business process
outsourcing subsidiary Tecnovate was incorporated by ebookers in 2001 Cendant acquired ebookers (including Tecnovate)
in 2004 and made Tecnovate its capital centre Cendant has a huge client base which will require a
large influx of work delegated to Tecnovate
Key Facts Tecnovate acted as a captive centre for
ebooker through to 2003 and performed contact centre services, BPO services, and IT services.
In 2004, Tecnovate started providing BPO services to third party clients and started Travelguru, a travel BPO education centre. After the Cendant acquisition, Tecnovate again became a captive centre.
Tecnovate has a multicultural staff, consisting of 1,000 people.
Key Facts The migration of processes from London to India, when ebookers acquired
Tecnovate, took nearly a year and was done in a step-by-step manner. First stage is less business critical tasks (no customer contact, contacts,
hotel confirmations, email sales) 2nd Stage- business critical stages By 2004, Tecnovate had transferred 30 processes to India. Myron Ferro joined Tecnovate in mid-2005 and had the major task of
transitioning processes from Cendant to Tecnovate. According to Ferro, there are two forces to transition: due diligence report
and the transition team. Cendant and Tecnovate formed service-level agreements (SLAs) that
monitored the quality of processes. Tecnovate had to deal with new interfaces and dependencies of its new
parent company, Cendant. There is competition for lower cost outsourcing in Manila, Philippines The growing on line potential of travel booking resulted in mergers and
acquisitions.
Alternatives Wait and See Keep Old Clients in India and Find the
Best Alternative to Outsource New Customers
Open Another Facility at Cheapest Available Alternative (India or other)› Hiring New Staff
Alternatives Outsource Processes through Mergers
and Acquisitions Have difference facilities for each
separate tasks Send a Multi-Cultured/Cross-Functional
Team to India to oversee and help implement processes
Solution The proposed solution is to expand to meet
the demands and larger work loads of Cendant.› Step 1: Take individuals from Travelguru as entry
level staff and move experienced individuals upward.
› Step 2: Continue to evaluate the different processes at a close level. At the event that Cendant stops giving you new processes-you can then break facilities into different task facilities
› Step 3: Look toward Cendant as a role model
Solution Continued› Step 4: Stay within India until filled facility
to capacity and look towards new capacities if necessary.
› Step 5: Implement Cross-Cultural Teams from Cendant and Tecnovate and have Cendant employees move to India for the time being.
When doing outsourcing what are the various issues involved in
process transition?• Generally•Time Consuming•Costly in the short-run•Success is not a guarantee•The same process is never transferred. Use Ferro quote•You can’t transfer the knowledge and expertise of individuals
•Specifically Tecnovate•Running parallel systems until perfected•Large Influx of Work from Cendant•Upholding Service quality•Inaccuracy of process flows
What should be the transition management plan for successful outsourcing?
Preparation – Having necessary resources› Money› Time› People (Transition Team)
Large amounts of Communication between Cendant and Tecnovate
Constant review and improvements
How does Tecnovate’s fusion philosophy help in providing outsourcing solutions?
Fusion BPO: integration of the contact centre, IT, and BPO services fueled by multi-cultural staff.› Holistic view – act as a team› Communication Flow› Many different individual viewpoints -
Creativity› Customer Relations› International Business Opportunities