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