Strategic Global Outsourcing and Offshoring

Academic Year 2018/19 Module Code: BNM748 Module Name: Strategic Global Outsourcing and Offshoring Module Leader: Aleksandre Asatiani Module Instructors: Ali Bigdeli Coursework Title: Individual Assignment Task Details/Description: Purpose: The essence of the individual assignment is to apply various theoretical frameworks and other module materials to a scenario where you are acting as an outsourcing consultant for a company. Your credibility as a consultant depends on you being able not only to provide relevant advice, but also to demonstrate that your advice is based on analysis of the lessons learnt (i.e., past experience and knowledge) in similar or related situations. Therefore, when providing advice, you need to support your recommendations with examples of how other companies have dealt with similar issues. Your examples should come from analysis of the case studies included in the module textbook (The Handbook of Global Outsourcing and Offshoring (2015), 3rd edition by Oshri, Kotlarsky and Willcocks) and demonstrate that you understand the situation/issue and how it has been dealt with in each case. You can also include real-life examples from professional media (e.g. Outsourcing Magazine, CIO magazine, Business Week) and official company web- sites. Scenario: You are an outsourcing consultant hired by a UK-based Bank. Three months ago, the bank has merged with another, smaller bank that is specializing in online banking services and since the merger has been struggling to integrate IT systems and services between the two banks. Different IT infrastructures, software applications, and inconsistencies in services that the two banks have been offering to their customers created the needs to standardize the IT infrastructure and centralize provision of IT- enabled services (support functions and online banking services) as a matter of strategic

COURSEWORK ASSIGNMENT

priority. Since the Bank does not have enough in-house expertise to devise such transformation, outsourcing is considered the way forward. The Bank has limited experience with outsourcing, therefore it was decided to hire an experienced outsourcing consultant (You). As a consultant you received the following brief describing background and key characteristics of the two banks that have merged: Bank A Bank B Business model

Old, traditional bank, with physical offices in large cities in the UK (costs associated with running these offices are high)

Relatively new bank (“born in the cloud”); is only providing online banking services, no physical offices for the customers to visit. Employees are based in one facility in a brain-park outside Birmingham. Extensively use marketing to attract customers

Outsourcing experience

Limited outsourcing experience. The tendency has always been to do in-house whatever possible. Lately started experimenting with outsourcing some of support functions: last 2 years have been outsourcing accounting and HR management functions. Occasionally have been using external marketing agency to advertise new banking products

Have extensive outsourcing experience, as some of the functions such as IT helpdesk for the bank’s employees, data centre, IT infrastructure and maintenance of online banking services have always been outsourced.

In-house functions

Data centre, IT helpdesk, banking-product development, application development and maintenance (still have some legacy applications to support)

Call centre, advisory, marketing, banking-product development, mortgage portfolio, investment portfolio and risk management

Personnel for in-house functions

300 employees Average age 44 years

50 employees Average age 27

Operating margins for in-house functions

5% 12%

You need to provide detailed report with your recommendations regarding how should the Bank approach the challenge of standardizing the IT infrastructure and centralizing provision of IT-enabled services. Your report should include 3 parts, in total 8 recommendations: Part 1: Decision-making (45% of the mark)

1) What sourcing models should the Bank consider? Identify potential benefits and risks associated with these models, from the Bank’s perspective.

2) What supplier configurations the Bank should consider? How to approach supplier selection?

3) What alternative types of contracts should be considered and why? 4) What knowledge/skills the Bank needs to retain (or develop in-house if don’t

have now) and why?

Part 2: Transition and ongoing management of the outsourcing relationship. (45% of the mark)

5) How to design the transition of IT systems and services from the Bank to the supplier(s)?

6) What governance mechanisms should the Bank implement in order to ensure that delivery of the outsourced services meets Bank’s expectations?

7) What formal and informal aspects of the relationship with outsourcing supplier(s) should the Bank develop and why?

Part 3: Future outlook (10% of the mark)

8) Looking ahead, consider potential areas to achieve innovation, and challenges that the Bank may face.

Length of the report: 3000 words (maximum), not including references and appendices. Use appendices only if absolutely necessary. List of case studies from the Handbook to use for finding relevant examples:

 Pactera Technology International: An Emerging Global Chinese Player, pp. 20-23  A Global Operating Model that Exploits Cloud Computing Services, pp. 42-50  The Giant Awakens: Sheen Software Systems Considers China for Offshore IT

Outsourcing, pp. 96-97  Backsourcing Cheque-Cheking Service, pp. 119-121  Tata Consultancy Services: Building Capabilities, pp. 151-157  JP Morgan Chase: To Outsource or Not Outsource? pp. 173-174  The Key Knowledge Management Challenges in the Outsourcing Project Between

ABN AMRO and TCS, pp. 201-204

 In a Russian Sauna with the Dutch Manager, pp. 275-278  GlobalSoftware, pp. 282-285  GlobalAirline, pp.290-291  WNS Buys Aviva Captive Centres, pp. 299-300  KPN: Challenging Suppliers for Innovation, pp. 321-323

Assessment criteria and expectations:

Assessment criteria Expectations

1) To demonstrate that you are familiar with module materials and able to articulate how theoretical and practical concepts and frameworks included in the materials could be applied to the specific situation of the Bank.

I expect to see that you use relevant module materials. Using additional theoretical and practical frameworks would add point ONLY if they are used in addition (and not instead of) the core module materials.

2) To demonstrate that you are able to analyse contextual characteristic of the contemporary global business, economic and political environment; can take into account relevant social and cultural aspects; and up to date with technological developments that are affecting global outsourcing market.

I expect you to take relevant contextual aspects into account when analysis the situation that the Bank is facing (your recommendations should be tailored to the specific situation, and not to be too general, and not copied from the textbook)

3) To demonstrate that you are able to analyse real-life case studies, and to apply lessons learnt to a new situation (the Bank).

I expect that every recommendation you make to be illustrated with examples from the case studies included in the Handbook. Including additional real-life examples from professional media (e.g. Outsourcing Magazine, CIO magazine) and official company web-sites would add points ONLY if they are used in addition (and not instead of) the case examples.

Other matters 1. Late assignments Late assignments will be dealt according to ABS rules.

2. Citations of Sources Whatever work you submit must be yours. Claiming work written by others to be your own is plagiarism, a serious academic offense which will not be tolerated. You are encouraged to use any source of information available but whenever you quote directly you must use quotation marks around your direct quote and insert reference to the source if you modify using your own words what has been said in the source. All sources must be clearly and carefully referenced and included at the end of your assignment.

In the case of a book:

Oshri, I., J. Kotlarsky and L. P. Willcocks (2015) “The Handbook of Global Outsourcing and Offshoring”. London, Macmillan.

In the case of a journal article:

Su, N., N. Levina and J. W. Ross (2015) "The Long-Tail Strategy for IT Outsourcing." MIT Sloan Management, 57(2), pp. 1-9.

In case of company web-site:

https://www-03.ibm.com/press/us/en/pressrelease/50452.wss , accessed on 1 December 2016

Submission Date & Time: 29.03.2019 Assessment Weighting for the Module: 70%