UK’s Barclaycard and the Need to Outsource

In the twenty-first at that place ar devil wrong that keep on go in the headlines world(a)ization and global telecommunications. These two are related because if applied science continues to improve indeed the whole planet goes risque-tech sever every(prenominal)y psyche beginning to realise that the world is shrinking and every year or so improvements in mobile communications, the Internet and the proliferation of wireless devices makes it easier to communicate with 1ness a nonher. One major implication of technology change is a apprehension called outsourcing.This idea is nothing upstart moreover UKs Barclaycard is unspoilt one of the many global corporations that ac realizeledges the need to out line. exclusively it is not as dewy-eyed as that, Barclaycard had to make a difficult decision, to consume between two places where they suffer outsource a portion of their trading operations whether to ship somewhat of their work to India or the Philippines. Ove rview According to Richard Bolin, Director of The Flagstaff Institute, Flagstaff, Arizona, USA, the phenomenon of outsourcing is nothing new and nevertheless as early as 20 years agone there are industrialised countries who do the connection between outsourcing and profitabilityJapan intentionally got rid of sewing factories to Southeast Asia by 1981. They couldnt waste their precious labour supply on scummy cherish sewing operations. This is what outsourcing is all about. If a club does not outsource, it exit die. And if its sphere does not find new industries to replace the inefficient ones, it testament not attract new investment and better jobs. Everybody has to at a lower placestand this (Bolin). Bolin is just one of many origin line leaders that place their faith in outsourcing and believe that this strategy is not a threat to the nations economy.In the colossal run it exit benefit the economy because it leave behind take in a very efficient system where the f ollowing positive out have intercourses so-and-so be expected (Brown, 2005) Increase sales opportunities Prevent missed opportunities Reduce yearly cost al well-nigh immediately Enable licit systemal argument to focus on core competencies Reduce or eliminate guest complaints Increase customer loyalty In a nutshell, outsourcing is the obtaining of services from an external source, outside the accompany.A much technical definition uses the term Business process outsourcing (BPO), BPO occurs when an organisation turns everywhere the attention of a differentiateicular business process such as accounting or payroll the underlying theory is that the BPO firm elicit complete the process more efficiently (Brown, 2005). It is casual to comprehend that if global corporations fail to figure out the beauty of outsourcing then they leave alone be leftfield behind by their competitors.They pass on eat the dust left behind by those who were able to grind the idea that allowi ng different(a)s to do low value operations is the approaching 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 eventful tasks. The positive feedback is the main reason why business process outsourcing is such a hot screenic in the world today. exactly it does not mean that everything will turn out to be great whenever a company decides to outsource protrude of its operations everywhereseas. in that location are obviously so many things to consider. Each case moldiness be treated on an individual basis and a thorough analysis of the operation, the core values of the company as well as pertinent information regarding the outsourcing goal must be considered prior to the decision to shut down one portion of the operations component of the firm and outsource it outside the sphere. Barclaycard UK A casual overview of companies that fixed to outsource part of their operations over seas will reveal that nigh of them have a common denominator.These companies are either in the manufacturing sedulousness or it is a business 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 continueing factories. Those in need of IT personnel will turn to India entirely because this is a nation where there is a relatively high compactness of side speaking mountain that are at the similar while tech- hollow and many are knowledgeable about current trends in the IT orbit (Pogson, 2008).Barclaycard is one European powerhouse that could not afford not to outsource. Barclaycard is part of the Barclays Group a conglomerate that crumb be found in the united Kingdom. It is Europes largest multi-brand citation card and also provides former(a) forms of consumer lending businesses. Barclaycard continues to lead the way in Europe and according to their formalized press release they are the most recognized brand in UK with over 10 million retail customers. merely 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 manufacture of cheap products.It is a company that handles a very all-important(prenominal) aspect of European business which is the issuance of credit cards and discordant lending services. In other words this is a type of business that requires high level cerebration and performed by not entirely the most technically proficient muckle in the planet but also those that have the highest integrity. in that respect are three potential destinations if Barclaycard decides to outsource part of their least important operations outside the country there are three possible corporationdidates India, Philippines, and the country of Ireland.Considering first the country 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 side of meat 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 employ the skilled workforce of India to tackle the outsourcing needs of Barclaycard. According to finance experts at Moodys, I ndia will remain a top outsourcing destination because of its tech-savvy and English-proficient urban workforce whose wages are much lower than their western counterparts (Moodys Investors Service, 2009). The nation has a population of more than one billion people. From this physique there are millions of educated English speakers entering the workforce each year (Kobayashi-Hillary, 2004).The Indian workforce provides a compelling 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 info 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 really amazing to realise that the location of India can be a source of another advantage in essence Barclaycards operations can be sustained 24 hours a day and seven years a week repayable to the time differences. If Barclaycard will use the same 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 safekeeping an operation functioning round the clock.But if they will outsource to India, the executives at the UK military 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 fitful and thereof Barclaycard can achieve cost- strength very quickly. If Barclaycard will outsource all of its call centres to India then the same level of efficiency and cost nest egg can be expected. The English speaking workforce in India will ensure that credit card holders can be assured of easy access to customer represent atives 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 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 explanation 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 sprinkle 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 stare at Asia will reveal that there is none better than the Philippines. Considering the Philippines There are many advantages in choosing this country as a BPO destination and these are listed as follows1. Outsourcing rates are low and can slow 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 compatible with the United States because it was a U. S. commonwealth in the early 20th century up to 1946 4. English is widely spoken and can be considered as the second gear 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 boast 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 department both countries can provide fantabulous service.When the Americans came to this nation in the early part of the 20th 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 experience with large software development projects it is easier to find body shops religious 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, bas ed on a 2007 report, Barclaycard al pitch c fall behindd 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 twenty-first 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 money in the process while retaining customer loyalty finished the creation of customer friendly operations. With globalisation comes wage increment 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 it of the company it is much better to outsource. With the advent of modern techn ology 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 stay contestants bidding for the rich rewards of outsourcing contracts India and the Philippines. At first glance it seems that India is the best preference for Barclaycard. This is because India has already proven itself in the BPO business especially in the IT firmament which is a major requirement for Barclaycard.It boasts of English speak ing and tech savvy personnel that can easily handle communication needs of the express 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 harry 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 hold 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 share of weaknesses. India is woefulness from a great(p) image following the debacle of Satyam, one of Indias top IT providers.The scandal that hounds Satyam will easily make future investors restless with the idea that they are placing all their eggs in one basket. If this is combine 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 betting 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 afford to lose one day of inactivity due to security problems. It is therefore logical to consider the Philippines as an alternative. It is als o 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 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 move 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 rugged 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 India ns 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 closely 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 Paul Chapman Publishing, Ltd. Brown, D.(2005). The Black Book of Outsourcing How to care 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. atomic number 20 Earthrise Press. Moodys Investors Service. (2009). India t o 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/rssarticleshow/4241062. cms Overby, S. (2009). Philippines Looks Beyond the Call aggregate 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 benevolent Resource Management R. Taplin (Ed. ). UK Routledge