bpo industry case study analysis

Topics: Strategic management, Business process outsourcing, Strategy Pages: 23 (1594 words) Published: November 29, 2013
Tecnovate: Challenges of BPO

Performed by BPM team:
Anna Bachurina
Anastasia Baulina
Agnessa Shpakova
Maxim Peskin
Vladimir Maksimov

Agenda







Current situation
Analysis
Trends and risks
BPO: value chain viewpoint
Strategic opportunities
Implementation: framework and issues

Where we are: brief
BPO markets expanding, new opportunities are
tempting:
– What are the core competencies we rely on?
– How to use them efficiently?
– Do we enter new segments or focus down?
– What risks do both companies face?

Key Forces for Tecnovate
New entrants:
Low entrance barriers
Focused offers required
Existing competition:
Lots of local/regional companies
IT services — global majors
Acquisition by Cendant = protection
Customers:
Cendant
Third party (possible)

General trends and assumptions
• Indian BPO is growing (35% in 2006)
• Value competition is decisive :
Demands and aims of outsourcing clients
«Critical mass» => consolidation and
differentiation
Growth potential + low entrance barriers =
more and more entrants
• Travel drives Tecnovate’s BPO business –
travel market in EU & Australasia grows by 20%
y-on-y (conservative)

Travel BPO should be the top priority
3rd parties

Cendant

ownership
outsourcing, tasks, future & present

ebookers

Tecnovate

Tecnovate services along travel distribution value chain
Pre-sales:
Advertising
Telemarketing
Web content management

Sales:
Online processing
Forms and applications
processing

Aftersales:
E-mail management
Helpdesk services
Customer support

E-business and web solutions design/implementation
Software services: development, integration, maintenance
Corporate Culture
R&D and Consulting/Networking
Financial operations support

Strategic opportunities: 2 stages
1.Tecnovate as Cendant’s business unit
2.Tecnovate as independent business

Strategies: Cendant + Tecnovate
1. Profit centre philosophy =
Tecnovate gains more
independence and diversifies
(3rd party, but primarily new
functions and processes

4. Machiavelli game = build
central position (as 3rd party
provider) in travel BPO via
unique services offered to
multiple players

2. Perspective cost elimination
= outsource anything (or
almost that) to cut costs

5. Deep focus = value-centered
outsourcing + 3rd party
services within key areas of
expertise (not based on fickle
cost advantages)

3. Value as target (not cost) =
outsource only that which
aligns with competencies and
strengths

6. Divestiture = growing BPO
market implies falling
margins=>strategic alliances
are more cost-effective

- (Market growth) +

Tecnovate’s strategy

*

?

$

@

Tecnovate is a «star» within Cendant's portfolio:
Cash flow is a function of market share
To enhance cash flow, 3rd party is vital
To utilize star benefits and optimize cash flow,
integration is vital as well

+ (Rel. share) -

Tecnovate's core competencies are
• Staff and culture
• Travel BPO experience (we even do consulting!)
• Transition methodology
=> Advantage: Tecnovate are «masters of BPO»
Short-term strategy
• Outsource processes that align with
Tecnovate's focus (travel BPO)
• Protect Tecnovate's pioneering position
(multicultural staff, transition methodology)

Long-term strategy
• Engage in consulting & networking activities
• Integrate Tecnovate fully into Cendant's corporate
framework
•allow for 3rd party operations

=> this implies the “Deep focus” strategy:

Strategies: Cendant + Tecnovate
1. Profit centre philosophy =
Tecnovate gains more
independence and diversifies
(3rd party, but primarily new
functions and processes

4. Machiavelli game = build
central position (as 3rd party
provider) in travel BPO via
unique services offered to
multiple players

2. Perspective cost elimination
= outsource anything (or
almost that) to cut costs

5. Deep focus = value-centered
outsourcing + 3rd...
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