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BPO Management
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks
Case 1 (20 Marks)
Two G iants Take the Offshore UPO Lead
GE Capital’s International Services unit, which provides everything from risk calculation to IT services and
actuarial analysis for GE worldwide, has grown from 634 employees to 17,000 during the past five years.
More than half of those workers are in India, and they are not being used for mindless data entry—in India
every employee has a college degree, and more than 1,200 have Master’s degrees in Business Administration
(MBAs). Microsoft has about 200 employees developing software in Bangalore, where it opened its first non-
U.S.-based product development center five years ago. In July 2003, the company announced it will be
shifting more currently U.S.-based jobs to India as it seeks to lower technical support and development costs.
Microsoft will increase its staff in India in the coming years, as the country continues to turn out tens of
thousands of English-speaking engineers each year.
1.) Summarize and Analyze the Case and give your Commnets
Case 2 (20 Marks)
AT&T Uses Team Approach to Outsource Its HR Function
When AT&T opted to outsource human resources, the telecommunications company signed a seven-year
comprehensive outsourcing agreement with Aon Consulting. A team of functional experts in AT&T’s human
resource (HR) and finance departments orchestrated the outsourcing initiative. Each department challenged
the other to prove the merits of the outsourcing strategy, resulting in a well-thought-out, appropriate, and costeffective
out- sourcing initiative. AT&T’s finance and HR departments also developed an atypical process for
determining which HR activities would be best served by out- sourcing. Rather than ask respective managers
to prove why their activity should be outsourced, the team asked them to provide evidence that their activity
should continue to be retained in-house. In doing this, managers became more cognizant of the benefits of
outsourcing, less adversarial and threatened by the strategy, and potential champions of it to the employee
population. Ultimately, managers designated virtually every HR function for outsourcing. Aon Consulting
now provides AT&T with HR administrative, transaction, and payroll services, including the oversight of
existing benefit plan providers, for AT&T’s 70,000 U.S.-based employees.
1.) Summarize and Analyze the Case and give your Comments
Case 3 (20 Marks)
GE Real Estate Understands Total BPO Costs
Realizing cost savings from offshore outsourcing often takes years of effort and a huge up-front investment.
For many companies, it simply may not be worth it. “Someone working for $10,000 a year in Hyderabad can
end up costing an American company four to eight times that amount,” says Hank Zupnick, CIO of GE Real
Estate. Yet, all too often, companies do not make the outlays required to make offshore outsourcing work.
“You have to bring people to America to learn your applications, and that takes time, particularly if you’re
doing it with a new vendor for the first time,” explains Zupnick, who maintains a handful of three-year
contracts with offshore vendors. In GE Real Estate’s case, the transition time for each vendor was up to a year
in some cases, in addition to the moneydraining vendor selection period of several months. Zupnick, who has
seven years of offshore experience, says most of his peers do not appreciate the time and money it takes to get
a relationship up and running. “The vendors say you can throw it over the wall and start saving money right
away. As a result, I have heard of CIOs who have tried to go the India or China route, and nine months later
they pulled the plug because they were not saving money,” Zupnick says. “You have to build in up to a year
for knowledge transfer and ironing out cultural differences.” At GE Real Estate, managing the offshore
vendor is such a big task that Zupnick assigned someone to handle it on a half-time basis at a $50,000 salary.
The individual makes sure projects move forward and develops and analyzes vendor proposals against the
RFPs when it comes time to bid out new work.
1.) Summarize and Analyze the Case and give your Comments
Case 4 (20 Marks)
Informal Vendor Selection Leads to Disaster
A large and well-respected company had a vision in the early 1990s of becoming one of the leanest and most
profitable manufacturers in the industry. The company’s CFO felt that the company could be much more
efficient if it focused on what it was good at, as opposed to managing some of the larger support functions.
After looking into its HR organization, the CFO determined that outsourcing this function would reduce a
great deal of overhead and could fix several of the problems the company continually faced. The CFO started
the project by assigning himself to be the company’s BPO champion. (This was mistake number one.) Next,
he contacted the ClO and explained how this new outsourcing effort would allow the company to make its
numbers in the next year and that he should be excited about assuming the role of change agent. Recognizing
that he had no experience in BPO, the ClO decided to go outside the organization for assistance. The first
problem he faced was who to call. The C1O had a relationship with a local consulting group that specialized
in outsourcing wide area networks. The firm was invited to a meeting to ask if they were interested in
handling the BPO project.The consulting group explained how outsourcing was one of its service offerings.
However, as understood by the consultant, the project could not be completed quickly or inexpensively.
Nonetheless, the CFO accepted the consulting group’s statements and
agreed to move forward.The following Monday morning, a three-hour kickoff meeting began between the
ClO, CFO,and the eager consulting company. The consulting presentation covered outsourcing at a high
level and the financial impact it could have on a company. This presentation certainly reaffirmed the CFO’s
vision by capitalizing on the savings a company could anticipate. The unfortunate point was that no one in the
room had any idea how complex this project was going to be. The CFO created a project team by assigning
several subject matter experts to the team on a part-time basis. With everyone working part-time one really
took responsibility for the project and simply assumed that t consulting group would handle it. The consulting
group did not really understand the HR department functions and, therefore, could not structure the new
process flow. Because the consulting group was not set up to handle the HR back-office functions, it found
itself trying to outsource the process to another consulting group This BPO project grew out of control within
weeks. After wasting seven months and spending $800,000, the CFO became furious about the lack of
progress. The ClO was fired for selecting the wrong consulting group, which apparently provided no added
value, and the consulting group was released only to face a lawsuit. This experience was a disappointment for
the CFO, and he decided to revert back to the old way of operating the HR department. To this day the
organization’s HR function is as ineffective as it was before the BPO project debacle.
1.) Summarize and Analyze the Case and give your Commnets
BPO Management
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks
Case 1 (20 Marks)
Two G iants Take the Offshore UPO Lead
GE Capital’s International Services unit, which provides everything from risk calculation to IT services and
actuarial analysis for GE worldwide, has grown from 634 employees to 17,000 during the past five years.
More than half of those workers are in India, and they are not being used for mindless data entry—in India
every employee has a college degree, and more than 1,200 have Master’s degrees in Business Administration
(MBAs). Microsoft has about 200 employees developing software in Bangalore, where it opened its first non-
U.S.-based product development center five years ago. In July 2003, the company announced it will be
shifting more currently U.S.-based jobs to India as it seeks to lower technical support and development costs.
Microsoft will increase its staff in India in the coming years, as the country continues to turn out tens of
thousands of English-speaking engineers each year.
1.) Summarize and Analyze the Case and give your Commnets
Case 2 (20 Marks)
AT&T Uses Team Approach to Outsource Its HR Function
When AT&T opted to outsource human resources, the telecommunications company signed a seven-year
comprehensive outsourcing agreement with Aon Consulting. A team of functional experts in AT&T’s human
resource (HR) and finance departments orchestrated the outsourcing initiative. Each department challenged
the other to prove the merits of the outsourcing strategy, resulting in a well-thought-out, appropriate, and costeffective
out- sourcing initiative. AT&T’s finance and HR departments also developed an atypical process for
determining which HR activities would be best served by out- sourcing. Rather than ask respective managers
to prove why their activity should be outsourced, the team asked them to provide evidence that their activity
should continue to be retained in-house. In doing this, managers became more cognizant of the benefits of
outsourcing, less adversarial and threatened by the strategy, and potential champions of it to the employee
population. Ultimately, managers designated virtually every HR function for outsourcing. Aon Consulting
now provides AT&T with HR administrative, transaction, and payroll services, including the oversight of
existing benefit plan providers, for AT&T’s 70,000 U.S.-based employees.
1.) Summarize and Analyze the Case and give your Comments
Case 3 (20 Marks)
GE Real Estate Understands Total BPO Costs
Realizing cost savings from offshore outsourcing often takes years of effort and a huge up-front investment.
For many companies, it simply may not be worth it. “Someone working for $10,000 a year in Hyderabad can
end up costing an American company four to eight times that amount,” says Hank Zupnick, CIO of GE Real
Estate. Yet, all too often, companies do not make the outlays required to make offshore outsourcing work.
“You have to bring people to America to learn your applications, and that takes time, particularly if you’re
doing it with a new vendor for the first time,” explains Zupnick, who maintains a handful of three-year
contracts with offshore vendors. In GE Real Estate’s case, the transition time for each vendor was up to a year
in some cases, in addition to the moneydraining vendor selection period of several months. Zupnick, who has
seven years of offshore experience, says most of his peers do not appreciate the time and money it takes to get
a relationship up and running. “The vendors say you can throw it over the wall and start saving money right
away. As a result, I have heard of CIOs who have tried to go the India or China route, and nine months later
they pulled the plug because they were not saving money,” Zupnick says. “You have to build in up to a year
for knowledge transfer and ironing out cultural differences.” At GE Real Estate, managing the offshore
vendor is such a big task that Zupnick assigned someone to handle it on a half-time basis at a $50,000 salary.
The individual makes sure projects move forward and develops and analyzes vendor proposals against the
RFPs when it comes time to bid out new work.
1.) Summarize and Analyze the Case and give your Comments
Case 4 (20 Marks)
Informal Vendor Selection Leads to Disaster
A large and well-respected company had a vision in the early 1990s of becoming one of the leanest and most
profitable manufacturers in the industry. The company’s CFO felt that the company could be much more
efficient if it focused on what it was good at, as opposed to managing some of the larger support functions.
After looking into its HR organization, the CFO determined that outsourcing this function would reduce a
great deal of overhead and could fix several of the problems the company continually faced. The CFO started
the project by assigning himself to be the company’s BPO champion. (This was mistake number one.) Next,
he contacted the ClO and explained how this new outsourcing effort would allow the company to make its
numbers in the next year and that he should be excited about assuming the role of change agent. Recognizing
that he had no experience in BPO, the ClO decided to go outside the organization for assistance. The first
problem he faced was who to call. The C1O had a relationship with a local consulting group that specialized
in outsourcing wide area networks. The firm was invited to a meeting to ask if they were interested in
handling the BPO project.The consulting group explained how outsourcing was one of its service offerings.
However, as understood by the consultant, the project could not be completed quickly or inexpensively.
Nonetheless, the CFO accepted the consulting group’s statements and
agreed to move forward.The following Monday morning, a three-hour kickoff meeting began between the
ClO, CFO,and the eager consulting company. The consulting presentation covered outsourcing at a high
level and the financial impact it could have on a company. This presentation certainly reaffirmed the CFO’s
vision by capitalizing on the savings a company could anticipate. The unfortunate point was that no one in the
room had any idea how complex this project was going to be. The CFO created a project team by assigning
several subject matter experts to the team on a part-time basis. With everyone working part-time one really
took responsibility for the project and simply assumed that t consulting group would handle it. The consulting
group did not really understand the HR department functions and, therefore, could not structure the new
process flow. Because the consulting group was not set up to handle the HR back-office functions, it found
itself trying to outsource the process to another consulting group This BPO project grew out of control within
weeks. After wasting seven months and spending $800,000, the CFO became furious about the lack of
progress. The ClO was fired for selecting the wrong consulting group, which apparently provided no added
value, and the consulting group was released only to face a lawsuit. This experience was a disappointment for
the CFO, and he decided to revert back to the old way of operating the HR department. To this day the
organization’s HR function is as ineffective as it was before the BPO project debacle.
1.) Summarize and Analyze the Case and give your Commnets
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