The Role of Outsourcing in a Company’s Business Model

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Table of Contents

Introduction
Discussion
Conclusion
Reference

Introduction

Strategically outsourced services are a collection of operations that a corporation entrusts to a third-party service supplier for management. This technique is most typically connected with tiny businesses that lack the capacity to manage all duties on their own. Outsourcing and service management can be viewed as components of a business model change process. It increases productivity, reduces costs, accelerates business development, and allows businesses to focus on their core strengths.

Discussion

An example of this strategy in use can be found in the activity of Bharti Airtel company, a cellular operator. The corporation had taken the risky step of outsourcing a substantial amount of its operations. Bharti began a number of developments in Africa, including outsourcing active and passive professional services for all its markets. For example, IT and call center assistance were outsourced to business process outsourcing organizations, such as Nokia and Ericsson (Palepu & Bijlani, 2016).

They also outsourced customer support to corporate process outsourcing providers. Finally, they separated passive infrastructure, which included constructing and managing the business’s telecom towers, into a distinct company (Palepu & Bijlani, 2016). In terms of strategy, outsourcing allowed the firm to focus on advertising and client acquisition while enhancing the quality of services, from network connectivity to customer care. Therefore, the company has improved its business model by reducing unnecessary operations and cutting expenses.

Conclusion

To conclude, the outsourcing business model is beneficial for organizations that expand in the global markets while having multiple assets and operations to manage. Large firms like Bharti might find themselves unable to compete worldwide due to bloated management systems that hamper flexibility. However, diversification is necessary for corporations to widen their bases and capitalize on economies of scale. As a result, corporations can have a strategy of focusing on core business and expertise, determining what is vital to the company’s future success and what is not for further outsourcing.

Reference

Palepu, K., & Bijlani, A. (2016). Bharti Airtel in Africa. Harvard Business School.

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The Role of Outsourcing in a Company’s Business Model

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