UK’s Barclaycard and the Need to Outsource

In the 21st in that respect argon ii terms that keep on buzzing in the headlines globalization and global telecommunications. These cardinal argon related because if technology continues to improve whence the whole planet goes senior high-tech each person beginning to make that the world is shrinking and every year or so improvements in mobile communications, the Internet and the proliferation of tuner devices makes it easier to communicate with superstar a nonher. One major implication of technology change is a concept called appearsourcing.This inclination is nothing new provided UKs Barclaycard is just one of the many global corporations that acknowledges the charter to source. save it is not as simple as that, Barclaycard had to make a baffling purpose, to choose between two places where they trick outsource a portion of their trading trading operations whether to ship some of their manoeuvre to India or the Philippines. Overview check to Richard Bolin, Dir ector of The Flagstaff Institute, Flagstaff, Arizona, USA, the phenomenon of outsourcing is nothing new and even as early as 20 years ago there ar in sprinklerialised countries who made the connection between outsourcing and profitabilityJapan purposely got rid of sewing itemories to Southeast Asia by 1981. They couldnt waste their precious labour supply on low value sewing operations. This is what outsourcing is all about. If a follow does not outsource, it go out die. And if its inelegant does not find new industries to replace the inefficient ones, it result not attract new investment and correct jobs. Everybody has to understand this (Bolin). Bolin is just one of many line of descent enterprise leaders that place their faith in outsourcing and believe that this strategy is not a threat to the nations economy.In the long run it will gather the economy because it will farm a very efficient system where the following collateral outcomes rat be expected (Brown, 2005) Increase sales opportunities Prevent missed opportunities Reduce annual be close to immediately Enable business to focus on core competencies Reduce or eliminate customer complaints Increase customer loyalty In a nutshell, outsourcing is the obtaining of services from an external source, out attitude the corporation.A more proficient definition uses the term Business process outsourcing (BPO), BPO occurs when an organisation turns everywhere the management of a particular business process such(prenominal) as accounting or payroll the underlying theory is that the BPO firm displace complete the process more efficiently (Brown, 2005). It is easy to comprehend that if global corporations fail to figure out the beauty of outsourcing then they will be left bum by their competitors.They will eat the dust left behind by those who were able to grasp the idea that allowing some others to do low value operations is the future of effective business management. It is similar to hiring a driver to do the more redundant work of driving in order to free up the CEO to do more valuable tasks. The positive feedback is the main reason why business process outsourcing is such a hot overtakeic 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. there argon obviously so many things to consider. Each chance essential be treated separately and a thorough analysis of the operation, the core values of the company as well as pertinent cultivation regarding the outsourcing reference 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 stimulate a common denominator.These companies are either in the manufacturing industry or it is a busines s that relies heavily on Information Technology. Those in manufacturing will find the conditions in China particularly attractive because of the approachability of cheap labour as well as the competitive costs of building and maintaining factories. Those in need of IT personnel will turn to India simply because this is a nation where there is a relatively high concentration of face speaking flock that are at the same prison term tech-savvy and many are knowledgeable about current trends in the IT sector (Pogson, 2008).Barclaycard is one European powerhouse that could not ease up not to outsource. Barclaycard is part of the Barclays Group a conglomerate that passel be found in the united Kingdom. It is Europes largest multi-brand accredit card and as well provides other forms of consumer lending businesses. Barclaycard continues to lead the way in Europe and according to their official press release they are the most recognized brand in UK with over 10 million retail custom ers.But they are still expanding there are currently 8. 8 million credit cards in issue outside the UK and the firm also maintains operations in over fifty countries and four continents. According to another 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 especially true for Barclaycard. It is not an ordinary firm responsible for the become of cheap products.It is a company that go alongles a very important aspect of European business which is the offspring 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 have the highest integrity. on that point are three presumable destinations if Barclaycard decides to outsource part of their least important operations outside the country there are three poss ible candidates India, Philippines, and the Republic of Ireland.Considering first the Republic of Ireland, it is easy to gauge that it will not be as cost-effective 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 English speaking inhabitants will never pose a problem in terms of communication. But other than these two considerations, it is doubtful if Ireland can compete in terms of outsourcing rates when comparing the wages of workers in Europe to those in Asia. Considering India It is not hard to put India on top of the list.There are many advantages of exploitation the skilled workforce of India to tackle the outsourcing call for of Barclaycard. According to finance experts at Moodys, India will expect a top outsourcing destination because of its tech-savvy and English-proficient urban workforce whose wages are much lower than their Hesperian counterparts (Moodys In vestors 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 oblige argument as to why Barclaycard should outsource to India. Trevor Foster-Black is the managing director of Coalition Development, a UK research company that provides information to recruitment firms and he remarked that their company uses researchers from India to structure and format data and he adds, It would be very difficult to find such high-calibre people to do similar work in London They arrive at 4am our time and everythings finished by the time we arrive (Kobayashi-Hillary, 2004).It is truly amazing to realise that the localization of India can be a source of another advantage in essence Barclaycards operations can be sustained 24 hours a day and seven days a workweek due to the time differences. If Barclaycard will use the sam e strategy in their UK offices they would incur significant costs in terms of payroll alone. One can only imagine the numbers that will be generated by overtime and other costs related to keeping an operation functioning round the clock.But if they will outsource to India, the executives at the UK headquarters can send part of their workload to their people in India and they can work while the executives are going to bed. This ensures that workflow is not interrupted and therefore Barclaycard can action cost-efficiency very quickly. 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 therefore Barclaycard is just a phone call away(predicate) whenever a customer encountered problems with their credit cards. Barclaycard will definitely find it worthwhile to invest in India but globalization as well as rapid development in technology can create 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 dispersed portfolio of IT outsourcing providers (Overby, 2009). India is bordered by Pakistan on one side and one only has to remember Pakistans association with extremists groups to understand the spate of terrorist attacks in India. It is high time therefore to consider an alternative and a quick glance at Asia will reveal that there is none purify than the Philippines. Considering the Philippines There are many advantages in choosing this cou ntry as a BPO destination and these are listed as follows1. 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 one C up to 1946 4. English is wide spoken and can be considered as the second 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 suck 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 hundred million people. But in the English plane section 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 education 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, it is the lack of skilled project management and arrest 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 closed 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 Barclaycards call centres. Conclusion Without a doubt, outsourcing is a must if a global conglomerate hopes to stay 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 opportunity to streamline operations and make more coin in the process while retaining customer loyalty through the creation of customer friendly operations. With globalisation comes wage increase and various overhead costs that can easily force a company to bankruptcy if excess fat is not trimmed 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 indispensablenesss entails the capability to provide English speaking and tech-savvy personnel there are only two remaining contestants bidding for the rich rewards of outsourcing contracts India and the Philippines. At first glance it seems that India is the best alternative 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 d efinite advantage as compared to the hassle 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 control 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 Barclaycards 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 theatrical role of weaknesses. India is suffering from a bad image following the debacle of Satyam, one of Indias top IT providers.The soil that hounds Satyam will easily mak e future investors uneasy 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 likely follow. If there are less investors willing to invest then Indias 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 profitability and efficiency.But if terrorist attacks will continue then there is a chance that operations can be affected. Barclaycard could not give in to lose one day of inactivity due to security problems. It is therefore 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 Bar claycard 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 crown away from India. The debate will never end. There are strengths and weaknesses for both countries but it seems that Barclaycard has spoken. Two years ago Barclaycard made an important decision, Barclaycard will give the axe some of its operations to India following the announcement 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 about 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). Barclaycard Closes Call Centre, Offshores to India. CBS Interactive Retrieved 09 March 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 Without Borders. calcium Earthrise Press. Moodys Investors Service. (2009). India to Remain Among Top Outsourcing Destinations Moodys. Retrieved 09 March 2009 from The Economic Times. http//economictimes. indiatimes. com/Infotech/ITeS/India-to-remain-among-top- outsourcing- destinations-Moodys/r ssarticleshow/4241062. cms Overby, S. (2009). Philippines Looks Beyond the Call Center for Future Outsourcing Growth. Retrieved 09 March 2009 from CIO clip 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 Human Resource Management R. Taplin (Ed. ). UK Routledge