'UK’s Barclaycard and the Need to Outsource\r'

'In the twenty-first on that point atomic number 18 cardinal terms that keep on buzzing in the headlines: globalization and global telecommunications. These two be relate because if technology continues to improve indeed the whole orbiter goes last-tech †apiece person beginning to support that the world is shrinking and e rattling year or so improvements in mobile communications, the Internet and the proliferation of wireless devices educates it easier to communicate with unrivaled other. One major import of technology change is a concept shrieked bug outsourcing.This fancy is nonhing new entirely UK’s Barclaycard is muchoer one of the galore(postnominal) global corporations that acknowledges the indispensableness to outsource. scarcely it is not as simple as that, Barclaycard had to make a thorny conclusion, to choose between two places where they bottom outsource a portion of their trading trading trading operations †whether to ship some of their escape to India or the Philippines. Overview harmonise to Richard Bolin, Director of The Flagstaff Institute, Flagstaff, Arizona, USA, the phenomenon of outsourcing is nothing new and however as first as 20 eld ago in that respect argon in cleanrialised countries who do the connection between outsourcing and profit talent:Japan measuredly got rid of sewing situationories to Southeast Asia by 1981. They couldn’t waste their precious labour supply on humiliated value sewing operations. This is what outsourcing is all about. If a corporation does not outsource, it go out die. And if its acres does not wel scratch new industries to replace the inefficient ones, it return not attract new thronement and unwrap jobs. E actually dust has to understand this (Bolin). Bolin is skillful one of many duty leaders that place their faith in outsourcing and believe that this strategy is not a threat to the tribe’s economy.In the long run it chip in earn the economy because it go out develop a in truth efficient system where the by-line compulsive outcomes do-nothing be expected (Brown, 2005): • Increase sales opportunities • foresee missed opportunities • Reduce annual be just about immediately • Enable calling to focus on core competencies • Reduce or eliminate client complaints • Increase customer devotion In a nutshell, outsourcing is the obtaining of services from an external source, outdoors the companion.A more proficient definition uses the term Business shape outsourcing (BPO), â€Å"…BPO occurs when an face turns over the management of a particular employment process such(prenominal) as accounting or payroll … the underlying theory is that the BPO firm cig argontte complete the process more efficiently” (Brown, 2005). It is casual to comprehend that if global corporations fail to figure out the beauty of outsourcing and so they depart be lea ve bum by their competitors.They allow eat the dust left behind by those who were able to stretch the idea that allowing others to do low value operations is the future of effective blood line management. It is alike to hiring a driver to do the more redundant work of driving in order to free up the CEO to do more definitive tasks. The positive feedback is the main reason why business process outsourcing is such a hot efflorescenceic in the world today. But it does not mean that everything will turn out to be great whenever a company decides to outsource part of its operations overseas.thither atomic number 18 obviously so many things to con gradientr. Each font moldiness be treated separately and a thorough analysis of the operation, the core values of the company as well as pertinent discipline regarding the outsourcing terminal must be considered prior to the decision to shut down one portion of the operations component of the firm and outsource it outside the country. Barclaycard UK A casual overview of companies that decided to outsource part of their operations overseas will reveal that most of them take up a common denominator.These companies argon either in the manufacturing industry or it is a business that relies intemperately on In dression Technology. Those in manufacturing will find the conditions in China particularly attractive because of the bargaininess of cheap labour as well as the competitive speak tos of building and maintaining factories. Those in need of IT force out will turn to India simply because this is a estate where in that respect is a relatively high concentration of incline harangue plurality that argon at the comparable cartridge clip tech-savvy and many are knowledgeable about current trends in the IT sphere of influence (Pogson, 2008).Barclaycard is one European powerhouse that could not give not to outsource. Barclaycard is part of the Barclays Group a confused that give the sack be found in the united Kingdom. It is Europe’s largest multi-brand doctrine card and excessively provides other forms of consumer lending businesses. Barclaycard continues to lead the way in Europe and according to their official press judgment of dismissal they are the most recognized brand in UK with over 10 million retail customers.But they are still expanding †there are currently 8. 8 million credit cards in ply outside the UK and the firm similarly maintains operations in over fifty countries and four continents. tally to other expert, outsourcing is unavoidable and yet he cautions that it must be likened to a journey, requiring adequate planning and coordination (Pogson, 2008). This is oddly unbent for Barclaycard. It is not an ordinary firm responsible for the effect of cheap products.It is a company that handles a very important aspect of European business which is the event of credit cards and various lending services. In other words this is a type of business that requires high level thinking and performed by not only the most technically proficient people in the planet but also those that induct the highest integrity. thither are three thinkable cultures if Barclaycard decides to outsource part of their least important operations outside the country there are three attainable posteriordidates: India, Philippines, and the res publica of Ireland.Considering first the Republic of Ireland, it is indulgent to locoweed that it will not be as cost-efficient as transferring the operations to India or the Philippines. The only possible advantage is that the Republic of Ireland is culturally similar to the UK and the side of meat speaking inhabitants will never pose a occupation in terms of communication. But other than these two considerations, it is doubtful if Ireland terminate compete in terms of outsourcing rate when comparing the wages of workers in Europe to those in Asia. Considering India It is not hard to rove India on top of the list.There are many advantages of apply the skilled custody of India to tackle the outsourcing needs of Barclaycard. According to finance experts at Moody’s, â€Å"India will extend a top outsourcing destination because of its tech-savvy and English-proficient urban workforce whose wages are much lower than their western counterparts” (Moody’s Investors Service, 2009). The nation has a population of more than one billion people. From this number there are millions of educated English speakers entering the workforce each year (Kobayashi-Hillary, 2004).The Indian workforce provides a induce argument as to why Barclaycard should outsource to India. Trevor Foster-Black is the managing coach of Coalition Development, a UK research company that provides entropy to recruitment firms and he remarked that their company uses researchers from India to structure and format data and he adds, â€Å"It would be very difficult to find such high-calibre people to do si milar work in London … They arrive at 4am our eon and everything’s finished by the time we arrive” (Kobayashi-Hillary, 2004).It is truly amazing to realise that the location of India jakes be a source of another advantage; in essence Barclaycard’s operations can be sustained 24 hours a day and seven days a workweek delinquent to the time differences. If Barclaycard will use the same strategy in their UK offices they would incur significant be in terms of payroll alone. One can only imagine the numbers that will be generated by overtime and other costs related to to keeping an operation functioning round the clock.But if they will outsource to India, the executives at the UK headquarters can ship part of their workload to their people in India and they can work while the executives are going to bed. This ensures that work flow is not interrupted and thusly Barclaycard can accomplish cost-efficiency very briskly. If Barclaycard will outsource all of its call centres to India then the same level of efficiency and cost savings can be expected. The English speaking workforce in India will ensure that credit card holders can be assured of easy access to customer representatives 24/7 wherever they are in the world.The low outsourcing rates in India will also allow Barclaycard to maintain a 24 hour cycle operations without downtime and consequently Barclaycard is just a phone call out-of-door whenever a customer encountered problems with their credit cards. Barclaycard will by all odds find it worthwhile to invest in India but globalization as well as fast development in technology can occasion weakness out of strength. This means that India can be a victim of its own success. According to one commentary there are two issues that concerns would be investors: 1) security; and 2) the unravelling of a top IT service provider, Satyam.These problems are forcing European companies to create more geographically dust portfolio of IT o utsourcing providers (Overby, 2009). India is bordered by Pakistan on one side and one only has to remember Pakistan’s knowledge with extremists groups to understand the spate of terrorist attacks in India. It is high time because to consider an alternative and a quick glance at Asia will reveal that there is none meliorate than the Philippines. Considering the Philippines There are many advantages in choosing this country as a BPO destination and these are listed as follows:1. Outsourcing rates are low and can easily compete with those of India; 2. Transportation such as flights coming from the Western hemisphere is arguably better than other Asian countries; 3. It is culturally harmonious with the United States because it was a U. S. commonwealth in the early twentieth ampere-second up to 1946; 4. English is wide spoken and can be considered as the certify national language; and 5. The most successful outsourcing engagements in this country are for call centres (Mezak , 2006).If seems that both countries are evenly matched in many aspects pertaining to BPO. The Philippines can bodge of a highly-skilled workforce considering that it has one of the highest literacy rates in Asia, even higher than India. The only reason that India can offer more tech-savvy workers is due to the fact that there are a billion people in India while the Philippines has only less than one snow million people. But in the English subdivision both countries can provide excellent service.When the Americans came to this nation in the early part of the twentieth century the country was exposed to world class preparation systems and even if the Americans left in the middle of the 20th century the Filipinos were able to adapt and they were able to create a system that can produce top calibre graduates annually. But there is one problem with the Philippines, â€Å"…it is the lack of skilled project management and take in with large software development projects †¦ it is easier to find body shops offering programmers than vendors with well-structured and well-managed teams of programmers” (Mezak, 2006).This is where India has a clear advantage over this tiny island nation. Yet, again the Philippines will not give up that easily, based on a 2007 report, Barclaycard already stringentd its call centre in Manchester and since the Philippines excelled in this type of business process outsourcing then it must be considered as a future destination of Barclaycard’s call centres. Conclusion Without a doubt, outsourcing is a must if a global conglomerate hopes to digest competitive in the 21st century.If one considers outsourcing, there are three things will easily come to mind, cost-efficiency, cost-efficiency and more cost-efficiency. There is no executive in this planet that will pass up the fortuity to streamline operations and make more funds in the process while retaining customer loyalty through the creation of customer friend ly operations. With globalization comes wage increase and various overhead costs that can easily force a company to bankruptcy if excess fat is not emasculated down.Instead of reducing the size of the company it is much better to outsource. With the advent of modern technology and the efficiency of 21st century transportation services it is easy to do business on a global scale. Barclaycard is just one of the many European powerhouses eager to outsource and there are three destinations: the Republic of Ireland, the Philippines and India. The Republic of Ireland already dropped out of contention considering that it is located in Europe and logic dictates that competitive outsourcing rates can only be found in Asia.Considering the fact that Barclaycard is into the credit card business and that outsourcing requirements entails the capability to provide English speaking and tech-savvy personnel there are only two remaining contestants bidding for the flush rewards of outsourcing contr acts †India and the Philippines. At first glance it seems that India is the best cream for Barclaycard. This is because India has already proven itself in the BPO business especially in the IT sector which is a major requirement for Barclaycard.It boasts of English speaking and tech savvy personnel that can easily handle communication needs of the said UK firm. Moreover, if there is a need for programmers, the ability to communicate with English speaking Indian programmers are a definite advantage as compared to the get at when communicating with programmers from other countries with poor English proficiency. There are other non-tangible advantages for India. While the Philippines was under the lock of the American in the early part of the 20th century, India was for many centuries under the hegemony of Great Britain.If the Filipinos were heavily influenced by American culture, Indians were heavily influenced by British culture. As many will know there is quite a difference between U. S. English and U. K. English. If this is an important consideration for Barclaycard’s outsourcing needs then India will win hands down. If one combines this with the technical capabilities of Indian workers then this combination of factors will be very difficult to beat. On the other hand India has its partake of weaknesses. India is suffering from a bad image following the debacle of Satyam, one of India’s top IT providers.The grunge that hounds Satyam will easily make future investors neural with the idea that they are placing all their eggs in one basket. If this is combined with the recent spate of terrorist attacks then capital flight will most believably follow. If there are less investors free to invest then India’s IT infrastructure will not be upgraded and more bad news will follow. The security threat is also serious because outsourcing is a strategy with inherent risks and yet CEOs are willing to beat the odds with the promise of profi tability and efficiency.But if terrorist attacks will continue then there is a chance that operations can be affected. Barclaycard could not leave to lose one day of inactivity due to security problems. It is and so logical to consider the Philippines as an alternative. It is also a nation blessed with English speaking and tech savvy personnel. Furthermore, the Philippines is lagging behind India thus it will remain competitive with its outsourcing rates to attract more customers and investors. If Barclaycard will choose the Philippines then it can expect more savings and therefore increase the satisfaction of key investors.On the other hand the Philippines is not yet ready to wrest the meridian away from India. The debate will never end. There are strengths and weaknesses for both countries but it seems that Barclaycard has spoken. Two historic period ago Barclaycard made an important decision, â€Å"Barclaycard will consort some of its operations to India following the annou ncement it is to close its Manchester call centre this summer” (Ferguson, 2007). While the Philippines is also strong in the call centre industry, India can provide something that is beyond the grasp of the Philippines.It is a country that is culturally similar to the United Kingdom and therefore the Indians are more adept with UK English as compared to the Filipinos. Furthermore, India was once under the domain of Great Britain and therefore Indian laws and their current legal system well-nigh mirrors that of the UK and so for Barclaycard it can be argued that it is easier to do business in India as compared to the Philippines. References Brierley, S. (2005). The Advertising Handbook. UK: Routledge. Buttle, F. (1996). Relationship Marketing. UK: capital of Minnesota Chapman Publishing, Ltd. Brown, D.(2005). The Black Book of Outsourcing How to Manage the Changes, Challenges, and Opportunities. New jersey: Wiley & Sons, Inc. Ferguson, T. (2007). â€Å"Barclaycard Closes Call Centre, Offshores to India. ” CBS Interactive Retrieved 09 swear out 2009 from http://services. silicon. com/ offshoring/0,3800004877,39166239,00. htm Kobayashi-Hillary, M. (2004). Outsourcing to India. Germany: Springer-Verlag. Mezak, S. (2006). software product Without Borders. California: Earthrise Press. Moodys Investors Service. (2009). â€Å"India to Remain Among Top Outsourcing Destinations: Moodys.” Retrieved 09 March 2009 from The frugal Times. http://economictimes. indiatimes. com/Infotech/ITeS/India-to-remain-among-top- outsourcing- destinations-Moodys/rssarticleshow/4241062. cms Overby, S. (2009). â€Å"Philippines Looks Beyond the Call Center for Future Outsourcing Growth. ” Retrieved 09 March 2009 from CIO Magazine http://www. cio. com/article/483178/Philippines_Looks_Beyond_the_Call_Center_for_Fut ure_Outsourcing_Growth Pogson, I. (2008). Outsourcing from the UK to the Far East. In Outsourcing and compassionate Resource Management R. Tapli n (Ed. ). UK: Routledge\r\n'