Suggestive Ideas To Sustain Profitability In Business Process Outsourcing

Background of Business Process Outsourcing

Question:

Discuss About The Suggestive Ideas To Sustain Profitability?

Business process outsourcing (BPO) was introduced in the phase when the business world witnessed an escalated rate of competition regarding the market or a brand position, directly demanding an improvement in the service level with a simultaneous decrease in the investment costs involved in the entire business management. This procedure in the business forum activated a new methodology to provide services by exporting business activities via specialized service providers (Sengupta & Gupta, 2012). This procedure involved outsourcing of services inclusive of the fields like manufacturing, human resources, finance and accounting involvements, information technology and as an important aspect marketing (Jain & Cooper, 2012). Allen, the executive vice president of BPO, Inc, had the responsibility of Employee Benefit Outsourcing (EBO), who needed an audit report regarding the efficiency output of Health and Welfare Service Delivery Process, based on the E-mail received from Sam Regan as a critique to the provided services from the organization. This became an issue to be addressed as it pondered the query of whether a proper service is conducted on a regular basis to meet the needs of a client. This report introduces the underlying limitations in the operational management of the system and recommendations that are suggestive to be followed as an 18- month plan to improve the efficiencies in the process, from the analysis of the provided literature review about the audit that had been conducted to increase the profitability of the process. The Health and Welfare Service Delivery Process was responsible for medical, dental, vision and survivor benefit proclaims ranging over 18 Firms constructed for clients all-over.

Considering variant options in context of replying the client Sam Regan, it was commendable on Allen’s end to conduct a meeting addressing specific individuals involving Ethan Ekans, who was the appointed senior vice-president of the operations department, Jerry Small, the assistant director of the quality segment and finally one Six Sigma black belt candidate (Malik & Blumenfeld, 2012). This set up was solely dedicated to receive the updates related to the Six Sigma project, which was dealing with the improvement of the efficiency issues of Health Welfare Services, which as pre-mentioned holds the functionality related to the welfare measures of the clients in various fields (Presbitero, Roxas & Chadee, 2016). This matter gained its priority the instance Allen observed that the mail copy was also destined to Jim Regit and Larry Wills, the chairperson and president of the BPO. This induced a high-level of concern regarding the operational management activities as the fact emerged that although it had growing revenue of 30% annually still it is persistent to loosing of about $5 to $10 million average an year. With satisfaction that he has assigned the correct person Jerry to conduct the process, he proceeded towards the answers to the queries and the possible mitigations to limitations (Sugumar, D., Kumaran, Raj & Xavier, 2013).

Services Provided by BPO

Prior to the analysis of the service provided by the organizational firms, it is necessary to witness and reveal the infrastructure of the BPO, INC and the included services it is responsible to address. The BPO ranges in providing services listing from risk management or insurance brokerage to management consulting. The operation management displayed over 100 countries with 50,000 employees, working in 500 offices (Pereira & Anderson, 2012).

Various exhibits are presented in the literature review provided, out of which each exhibit focuses on specific agendas and insights features addressed by a BPO. Exhibit 1 imposes the three divisions and the transparency to operations the systems provides. These are likely, firstly, the risk management segment, which helps the organization know about the existing risk profiles and introduces possible solutions for the management of the same and provide the options to minimize the existing vulnerabilities for a sustained growth. Secondly, is the Human Resource segment, designed to provide the services inclusive of human resource outsourcing, Business Process design and consulting all the management issues (Cascio, 2012). Third is the compensation consulting unit, providing services related to efficient compensation and rewarding system.

Among the listed services, HRO comprised of Employee benefits outsourcing and the Employee processing outsourcing. The EBO was potentially a growing unit due to the fame it received due to the outsourcing activities and included three prime services as tabulated below in this section of the report.

SEGMENTS	BENEFITS
Defined Benefit	Formulated the pension and retirement plans of employee
Defined Contribution	Administration of retirement plans subjected to employer contributions
Health and Welfare	Contributed to the services in the dental, vision and survivor benefits fields

Table: 1

Revenues amounting to about $40 million from the contribution services were neglected. HRO clients seemed interested in the cost savings linked to the outsourcing procedures. The analysis provides an insight that these services provided were merely accepted as commodity, which resulted in soliciting bids from the contemporaries involved in the category and pitting the service providers against each other. The coupled factor to this was the expectation of high-level services, which made it a crucial task for the BPO companies to sustain the profitability.

The HRO process comprising the EBO, related to the health and welfare delivery segment received a critique as per the E-mail copy provided in the literature, thus, this require an analysis to deal with the underlying limitations of the operations involved in the welfare services. The major area to reflect for this segment is to update any company related benefit plans and the information relative to any changes and answering the query of the coverage involved (Kleibert, 2014). To enquire about the limitations involved a brief analysis on the infrastructure is a priority, which provide a descriptive view to the two-level client organization interfacing. At the organizational level, the EBO was responsible to provide a database relative to the employee details; this helped the EBO to determine the eligibility criteria for the employees. At the participant level, EBO provided the service of directly helping the employees on the benefit plans and its related updates or queries. Related to this very service, there exists an operations responsibility of a set time interval of 6 minutes that remains an internal metric which the service level between the client and the BPO range to a level corresponding to the answering of 80% of calls in almost 20 seconds (Jeston & Nelis, 2014).

Employee Benefit Outsourcing (EBO)

Two prime sub-processes are involved in the health and welfare delivery services, the database updating the employee benefits on a weekly basis while the other sub-process was the participant care focused on providing the direct service to the clients’ queries. A substantial example the enquiry of a customer was highly dependent on the weekly database entry, which provides the view that these two sub-process are highly co-related as a necessity. This facility in turn benefited the benefit administrator, as they would utilize the participant sub-process to update the employee benefits (Marasigan, 2015).

The benefits Administrators (BA) processed a client’s week in and week out based on the database entries as is shown in the exhibit 3. On analysis it is witnessed, BAs are personalized in cases as it the tabulated data shows 15 among the 18 clients are dedicated to one BA while three corresponded  with other two BAs. The data Jerry collected corresponded to an issue indicating a an operational fact, that updating on an general account took about 80 minutes while this process was conducted within a duration of 20 minutes alongside another recorded duration was of 5 hours. Next operation oriented in this process was contacting with the clients, which according to jerry’s suggestion was supposed to take around 10 to 60 minutes in 95% of the allotted cases while a 5% showed a diverse result as the contacting period stretched to 150 to 90 minutes. This is another operational issue that needs to be addressed. The next step involved the auditing of the reports, which took a duration ranging from 5 minutes to 5 hours. The BAs are potential to make any changes corresponding to any detected errors in less than 10 minutes while according to Jerry’s analysis it, at times ranged to about 85 minutes. Processing of the data from the clients are able to be performed via web, providing the BAs the facility to download the reports. Another step involved was the client eligibility detection via the information available. Jerry while auditing found this process to range from 5 minutes to 5 hours on some of the clients’ parts (McHenry, 2013). Next in the operation department was to generate reports based on the participant database, which according to Jerry might take about 40 minutes, but the analysis of the situation presents that it ranges from 5 minutes for a client while 2 hours for others. Next step is situated around the importing and executing of the queries in a file, which in accordance to Jerry’s analysis should take about 5 minutes but in the real-time situation, it took 1 hour or at least 25 minutes. Next to this is the auditing that is analyzed to take an addition of 45 minutes while it took less than 25 minutes in few cases and 3 hours in the others (Christopher & Tanwar, 2012). Final step surrounded the uploading of the employee benefits database, which was expected to be within 3 hours but was observed to take about 495 minutes in few cases. This section thus highlights some of the operational issues involved in the processing of the data (Lacity & Willcocks, 2013).

Infrastructure and Limitations of Health and Welfare Delivery Process

The next sub process corresponds to the Participant Care relative to which, the exhibit 4 highlights the Customer Service Reps (CSR) in various recorded cases. The calls of 15 out of 18 clients were accepted from 8A.M to 6 P.M while the call-centre remained available for the other three clients until 8 P.M. the call volume is a measure that should be dealt with priority. This section deals with customer issues with the two available choices in a self-care attempt, using either the voice process or the telephone. Corresponding to Exhibit 5, the call volumes can acquire an analysis. CSR services according to Jerry’s anticipation and records took 0.75 to 1.5 minutes in logging the calls to the system. One of the major issues to be noted was that 20% cases were difficult for the CSRs to solve without the detailed information about the client. This needed a backup from the BAs which in 40% cases was found to be delayed with a duration of 45 to 60 minutes, while this research can potentially be done within 5 to 10 minutes. Once the escalations have been notified by the BAs, it is expected and recorded in cases that CSRs are able to leave a voice message within 30 seconds but errors were witnessed that corresponded to 5 to minutes in 25% of the cases (Borman, 2017).

Few other noted issues surfacing this sub processes involved four points, firstly the absence of any located difference between the call timing of the CSRs that they addressed and the ones they made to BAs, in few cases it was detrimental while in others there was a long gap. Secondly, the new calls were more appreciated than the existing ones. BAs stayed limited to the job of updating rather researching for the CSRs. Updating the database is found to be more difficult than researching, reviewing the literature (Guerci & Pedrini, 2014).

The operational management issues surfaced in the audit process, which are charted in exhibit 6 that reflects, the operational issues noticed have an adverse effect on the profitability growth and the service provided via health and welfare segment. The major challenge surrounded the integration methodology involving sub process of updating the databases (Sugumar et al., 2013).

Jerry introduced few suggestive measures in correspondence to his presented Exhibits. An analysis on the proposed measures is presented in this section, firstly, the suggestion of a new case manager seems really promising as a potential candidate for the position would be able to interlink the BAs and the CSRs so that the issues are resolved more efficiently. Secondly, the recommendation for an additional training for the CSRs would be helpful for them to manage or sort issues relative to the escalations from the customers helping to gain profitability (Bradley, 2016). The investment was also addressed in these suggestive measures by an introduction of a negotiated pay scale for the case managers. While another suggestion of making the CSRs capable enough to deal with escalations with a low-level of research would be helpful form both ends. Additional 30% revenue should be considered for the benefits and the taxes involved. The title for the model representing the measures is very apt, ‘high-touch-low-cost’ model, as these measures will definitely introduce improvements, sustained customer services, and organizational profit scale with the optimized operational management investments (Bronzo et al., 2013).

Operational Issues Involved in Processing of Data

The recommendation set, which was worth an analysis resulted to hold enough potential to bring about an effective change in the growth and the sustainability of the organization involving the customer care services. The strategizing involved enough effort from Jerry but the most difficult issue here is to implement the innovative and analyzed pointers in the real time situation, which is a matter of correct measures and time-consuming. The descriptive methodology can be implemented through an 18 months action plan (Magno & Cassia, 2015). First step towards this action plan would be assigning a correct individual for the designation of a case-manager. This individual should have the leadership qualities that helps a team to flourish. This might consume 1 month of quality interviewing or analysis of potential resumes. The next step to the assignment should correspond to the developing of an active system wherein, the manager is able to mange the existing issues relative to the clients expecting a standardized customer service from the organization end. The unresolved matters should be given priority along with the involved evaluations relative to revenue or escalations should be made before making any new commitments. This is estimated to be completed around 3 months of time. The next step is approach towards providing the training to the existing CSRs to manage activity related issues and time management to improve the efficiency level in them. The completion of the training in general should take about 6 months. The next 3 months, should implement the ‘on job training’ for the CSRs to display the learning. This would help in determining the potential and diligent candidates. Another 3 months should be spent on the advanced training involving the CSRs and the BAs to research on escalations from the clients. This will make both the ends potential enough to solve the issues instantly. The next 2 months should be a practice period to witness the effect of the steps and procedures introduced; accordingly, the revenue and the pay scales will be detrimental. This implementation plan corresponding to the suggestions is a sure methodology to test the descriptive methods.

Conclusion:

The meeting conducted with the consent of Allen proved to be helpful as it helped Jerry to introduce the underlying operational limitations that were prevailing, adversely affecting the profitability of the organization. The Exhibits gives a descriptive support to the analysis of the situations. The performance information should be considered before implementation of the suggestive measures. The action plan revolving around the ‘high-touch, low-cost’ model to initiate an effective change ensuring better customer services from the organization. A weekly assessment would guide the process towards sustainability.

Participant Care in Health and Welfare Delivery Process

References

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