Business Process Outsourcing and Innovation

This assignment examines the relationship between Business Process Outsourcing (BPO) and knowledge management. It analyzes how BPO organizations leverage knowledge management capabilities to foster innovation and enhance organizational learning. The discussion draws upon academic research and real-world examples of BPO best practices.

Running head: OPERATIONS MANAGEMENT
Operations Management
Name of the Student
Name of the University
Author’s note

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Executive summary:
The aim of the report was to analyze the underlying issues and limitations of the operational
management of the BPO in concern, based on the literature provided alongside introducing of
implementation methodology for the suggestive measures. A case study was provided and a web
survey was conducted. The results indicate the challenges and mitigation for the operations in the
organization. This report concludes that auditing helped in analysis of the situations. It is
recommended to follow the suggested implementation method in form of an action plan.

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Table of Contents
Introduction:....................................................................................................................................4
About the organization....................................................................................................................5
Theory of Six sigma.........................................................................................................................6
Current Situation of the Organization:............................................................................................8
Analysis of the present Situations:..................................................................................................9
Major Operational Problems Prevailing:.......................................................................................10
Analysis and Improvisations in Recommendations-List:..............................................................14
A suggestive 18-Month Action Plan:............................................................................................14
CONCLUSION:............................................................................................................................16
References:....................................................................................................................................17

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Introduction:
Every business organization has to have a strong management back bone in order to
operate the daily operations regarding the business in a smooth and flexible manner. A business
is always focused on earning profits and gaining opportunities to grow and expand the business.
In order to deal with the proceedings of the organization a set of management professionals are
required who will look after the day to day business of the company. Operations management is
the process and method of administration in a business organization that helps to generate the
highest level of performance efficiency, which is achievable using the resources of the
organization. The administration is associated with converting raw materials and work force into
goods and services as efficiently as possible in order to improve the profit of the enterprise. The
idea of the operation is to balance the costs of operation with the revenue of the business for the
accomplishment of the maximum profit that is possible (Krajewski et al., 2013).
Operation management includes the maximum utilization of all the resources of the
organization like instruments tools, equipment, human resource, technology etc. it ensure highest
productivity possible form the available resource.
BPO (business process outsourcing) unit that is basically a business organization that
provides services for the non-primary business activities and functions to a third-party provider
this process is mostly carried out in a contractual basis. Most BPO jobs are based on information
technology, telecommunication connectivity and skills of the resources etc. BPO services also
include customer care, payroll management, human resources (HR), and accounting. In this case,
the BPO that has been studies has strength of 500 professional services organization; the
company offers the wide clientele a range of services (Khanna, 2015).

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About the organization
BPO Inc is a business organization that has a wide range of services starting from crisis
management, risk management, insurance brokerage to management consultation. It is a large
scale business unit that comprises its operations in over 100 countries, have human resource of
over 50,000 employees, and has office located exceeding 500 locations. The crisis Management
and the Insurance Brokerage division provide third party organizations with analytics and review
for understanding and assessing the level of their risk profiles. Furthermore, it also provides the
company to create and initiate an appropriate a strategized management programe to combat
their weakness to possible long-term setbacks (Lacity et al., 2015). The HR consulting service of
the company offers outsourcing, business process design and management consulting services to
the third party clientele. The compensation consulting is the expert service of that provides
implementation and a sketch of compensation plans, the idea is to implement correct
remuneration for the employees. It also includes consultation about the latest trends in the
compensation of the sector the organization is operating in it as also based on the job description
and the job category (Liu & Deng, 2015).
A section of the human resource outsourcing involves the employee benefits outsourcing
unit which furthermore deals with three sub-sections defined benefits, defined contribution and
health and welfare. Around $40 million in revenues was garnered form the defined benefit along
with the health and welfare sectors of the organization. While, the revenue collected by the
company from the defined contribution service were insignificant to the total profit of the
company. It was discovered that the clients of the Human Resource Outsourcing unit were
wondering of saving the cost, which was being incurred by this service. This had made the
company difficult to earn profit in the long run (McIvor, 2016).

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Theory of Six sigma
The price of a product or service is determined by the competition that is in the market
and industry and in order to increase the profit margin of the company the only way is to
minimize the production or manufacturing cost of the product or service. This can be achieved
by the company only by increasing the efficiency and the performance level of the existing
resources to full potential (Näslund, 2013). It has become very important and crucial regarding
the business organization to bring some mandatory modification, in the process, using which a
company carries out several business operations; the six sigma segment for quality framework is
a guideline for consistent improvement and development of the resource (Pyzdek & Keller
2014). The policies and the decision that are made at par with this concept follow a streamline of
facts and figures that is backed by research. Six Sigma is a process by which a business
organization can strive towards improving the quality of the operations management department.
It operates by removing the errors and shortcoming, reducing expense, and saving time. It can
prove to be an expensive procedure to implement by the organization, but, if it is carried out as
planned it will not only pay for itself in turn helps the companies benefit and thrive into industry
leaders and Centers of Excellence (Albliwi et al., 2014). It is a lengthy process and not a quick
fix to problems and hence not a short term plan that is chocked out by the company. Proactive
thinking and efficient brain storming to achieve desired result and increasing the productivity
level of the resources that are available. While working on a six sigma project the company has
to prioritize the responsibility the company has towards the customers and work towards
achieving the expected outcomes of the business (Furterer, 2016).

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Aims and objectives of the concept in the BPO Inc case:
 To identify ways increase the performance level and accountability.
 To keep in mind the end customer while taking any decisions of the business
 To initiate a process of reducing or minimizing errors and defects in the operations
process of HRO section of the business
 To understand the scope of improving the service that is provided within the price limit.
 To provide both internal and external customers of the organization a satisfactory stand
point.

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Current Situation of the Organization:
Various possible options were available in order to reply the client Sam Regan, among
which, the method chosen by Allen, as witnessed in this case is a commendable effort on his end.
Especially, involving the correct individual to conduct the meeting, Ethan Ekans, the person
appointed as the senior vice-president in regards to the operations department of the organization
was an efficient decision-making owing to the prevailing conditions in relevance to the customer
services aiming towards the operations end. Alongside, Jerry Small, the designated assistant
director of the quality management and a black belt candidate from Six Sigma also collaborated
as a part of the meeting (Malik & Blumenfeld, 2012). This arrangement was solely oriented
around the concern of receiving updates in relevance to the Six Sigma Project developed to
recieve the updates and solve the limitations of the Health Welfare Services, surrounding the
level of efficiency in their services. The Health Welfare Service, as mentioned in the study
provided, excels in the relevant functionality to attain the welfare measures surrounding the
clients in several fields (Presbitero, Roxas & Chadee, 2016). The matter presented or
highlighted achieved the considerable importance from the instance Allen noted the mail copy
from the client addressed Jim Regit and Larry Wills, the chairperson and president of the
organization. The situation demanded a high-level of attention relative to the operational
management practices that has been continuing in the BPO that is more profoundly executed
with the figurative directly indicating a growth in the revenue by 30% with still a consistent loss
amounting to $5 to$10 million annually, as an average. Allen gained the certainty to answer the
queries depending on the fact that he had appointed a suitable candidate, Jerry to the conduct the
entire procedure (Sugumar, D., Kumaran, Raj & Xavier, 2013).

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Analysis of the present Situations:
The literature based on which this analysis is constructed present with variant Exhibits,
focusing on definite objectives and insights about the features directed by a BPO. Exhibit 1
displays the three categories and a detailed version orienting the functionalities the system
focuses. These are listed in this section of the report. Firstly, the department of risk management,
this provides the insights of the existing or any potential risks posed to the organization with
possible mitigation for the same and aims towards the minimization surrounding the
vulnerabilities concerning a consistent growth of the organization. Secondly, as pre-mentioned is
the Human Resource section constructed in a way to provide services surrounding Business
Process designing, resource outsourcing as well as consultation regarding issues related to
management (Cascio, 2012). Thirdly, in view is the consulting segment, directly involved in
services for proving compensations and benefits or rewarding system (Pereira & Anderson,
2012).
Among the services mentioned, HRO included Employee benefits and Employee
processing outsourcing. The EBO unit can be considered to be a increasing unit in relevance with
the fame it achieved due the activities of outsourcing and is set to record that include three major
service fields as is tabulated, as follows:

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SECTIONS BENEFITS
Health and Welfare Concerned with various dental, vision or survivor
benefits objectives
Defined Contribution Deals with retirement plans linked with employee
contributions
Defined Benefit Formulates the employee’s pension and retirement
subjects
Table: 1
Revenue collected from the contribution services summed up to $40 million, which was
completely neglected. HRO clients had a specific interest in cost savings involved with
outsourcing processes. A vivid analysis delivers an insight that the services provided were
treated as a mere commodity, resulting in the solicitation of bids from the respective
contemporaries, relative of the category and setting conflicts between the service providers. An
added onto the factor involved with the previous one, was the extent of excellent services
expected from the clients’ end made this more difficult for the BPO sectors to sustain its
prosperity.
Major Operational Problems Prevailing:
HRO services comprised the EBO, which was responsible for the health and welfare
delivery section received a critical review in accordance with the E-Mail copy provided in the
study, thus, indicating a requirement of analysis following the limitations, if any, present in the
operational management of the welfare segment. The prime areas of concern for this section of

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the BPO included managing the updates related to benefit plans and any informative links for the
company, simultaneously, resolving any relevant queries in reference to the coverage (Kleibert,
2014). In order to discover any challenges or limitations involved in the foundation, a brief
analysis is essential in reference to the infrastructure that directly insights the client-organization,
which is a two-level interfacing. Concentrating majorly on the organizational level, the EBO had
the responsibility of providing the database containing the employee details; this in turn helps in
determining the employee eligibility. While EBO at the participation level, was responsible for
supporting the employees in solving any benefit related issues or queries. In this very service, the
operational activity is estimated to be completed in 6 minutes that is an internal measure that at
the service level, focusing on the interface of the clients and the BPO corresponds to answering
the calls, 80% of the calls in 20 seconds.
Two prime sub-processes were directly linked with the health and welfare delivery
section; firstly, employee benefits are updated regularly each week but in another sub-process,
the participant care, primarily concentrated on solving the clients’ issues or queries. The enquiry
from any client was highly related to the weekly database updates that provide an insight that
both the sub-process was highly inter-related as an essentiality. This interrelation as a result,
proves advantageous for the benefit administrator as utilizing the participant sub-process singly
would provide the updates of employee benefits (Marasigan, 2015).
The Benefits Administrator (BA) was in charge to track the week-in and week-out of a
client relative of the database updates as in presented in exhibit 3. Analysis in this context,
highlights the service from the BAs is quiet a personalized aspect as the recorded data displays
15 out of 18 clients dedicatedly focused on specific BA while the remaining, were depended on
the left two BAs. According to Jerry’s investigation on the collected data, as operational issue

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surfaced that revealed that updating an general account took probably about 80 minutes while the
recorded observation reflects, this conduction takes about 20 minutes for the involved cases
while in others it ranges as high as 5 hours. proceeding operational step in this context, was
contacting the client, which in accordance to Jerry’s analysis should require about 10 to 60
minutes as is, in the instance for 95% of the cases but the other 5% revealed a highly diverse
result as the contacting duration ranged to 150 to 90 minutes. Hence, it is an operational
limitation. The next step oriented in this process was to audit the reports, which corresponded to
duration of 5minutes to 5hours. The BAs were capable of making suitable changes in less than
10 minutes for any detected error, which on investigation, Jerry discovered, ranged to about 85
minutes. Next, processing of data from clients can easily be conducted through web, which
would provide the benefit of downloaded reports, for the BAs. Another important step was to
detect the client-eligibility in accordance with the data available. While auditing, Jerry
discovered that this process ranges to about 5 minutes to 5hours in few of the clients’ cases
(McHenry, 2013). Another observant issue was related to the next operational process in
accordance to the participant database, which according to Jerry’s analysis is supposed to take
almost 40 minutes, but the investigation presented that this ranges from 5 minutes to 2 hours for
various clients. Next step in this process, is the import and execution of queries in a file format,
which as per Jerry should be completed in 5minutes but in real business situation it is recorded to
consume about 1 hour to 25 minutes. Proceeding, this step is regarding auditing, which as
analyzed should be done within 45 minutes, this took less than 25 minutes in some cases but 3
hours for the different cases (Christopher & Tanwar, 2012). Final procedure to this was
uploading the updated database relative to the employee benefits that was supposed to consume 3
hours but as observed ranges to almost 495 minutes as is in few cases. This segment of the report

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thus, insights about some of the underlying operational issues existing in the data processing
(Lacity & Willcocks, 2013).
The next sub-process is relative to the participant care, in relevance of this, Exhibit 4
presents the Customer Service Reps (CSR) for various cases, tracked. Calls from 15 among 18
clients were received in between 8A.M to 6P.M, while the call center provided service for the
other left out three clients till 8P.M., thus, call volume is a substantial area demanding priority.
This section prioritizes the customer queries and issues via two available self-care techniques,
utilizing either voice process or the telephonic interview. Exhibit 5 presents data about call
volumes, thus, this can be analyzed further. CSR services, in accordance of Jerry’s investigation
and records, were supposed to consumes about 0.75 to 1.5 minutes dedicated to the calls to log
in, in the system. One major service oriented issue was the incapability from the CSR end, to
solve 20% of the cases, exempting the availability of the client details. This situation requires a
back-up service from the existing BAs, which when tracked, in 40% of the cases was delayed by
a duration of 45 to 60 minutes, while the research related to this, can be done potentially within 5
to 10 minutes. At the instance, the BAs notify escalations relative to cases, CSR as per record is
expected to respond with a voice message within 30 seconds but errors are observed that ranged
to 5 minutes in about 25% of the cases (Borman, 2017).
Some of the other on-record issues surrounding these sub-processes comprises four
points, firstly, the lack of any difference located between the call CSRs; call timings that they
have addressed and ones addressed to the BAs. While in some cases, it was easily detrimental,
the others corresponded to a long gap. Secondly, the calls from the potential clients were much
more appreciated than those from the existing clients. BAs focused solely on updating the details

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rather than performing any research for the CSRs to provide assistance. Updating relative to
researching is more difficult on the analysis of the literature (Guerci & Pedrini, 2014).
Issues in relevance to the operational management were revealed in the auditing
procedures, as tabulated in Exhibit 6. This noted operational challenge as recorded, adversely
affects the profitability and the service providence by the health and welfare unit. The most
challenging issue is the integration of the two sub-processes involved in updating the database.
Analysis and Improvisations in Recommendations-List:
During the investigation of the operational management activities concerned with the
BPO activities, Jerry, introduced few recommendations for the betterment relative to the
Exhibits. This section provides a vivid analysis on the same. In the suggestion enlistment, firstly,
appointing a new case manager is a relevant suggestion as potential personnel in this designation
would be capable of interlinking the BAs and the CSRs, to solve the issues in an efficient way.
Secondly, the idea to provide further training sessions for the CSRs would support them to
resolve issues in accordance with the escalations from the customers to sustain the profitability
(Bradley, 2016). The recommendations relative to investment has been mentioned, which is a
negotiated pay scale dedicated to the case managers. One more suggestive step that CSRs should
be trained for the low-level research , would in a definite way be helpful in resolving issues. A
30% hiked revenue for the benefits and the taxes, is a considerable suggestion. The title
introduced, ‘ high-touch, low-cost’, on analysis, is proved to be apt for the model reconfigured,
providing improvements, standardized customer services, and profitability for the organization
with an optimization regarding the investment for the organizational management (Bradley,
2016).

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A suggestive 18-Month Action Plan:
On analysis, it would be quite appropriate to mention that the recommendation set holds
enough potential to improvise the operational management of the BPO. The major challenging
segment would be the implementation of the suggestions in a real time situation, which hence,
needs proper strategic planning. Based on the descriptive suggestive measures, a 18-Month
action plan design is put forward in this section of the report (Magno & Cassia, 2015). The
configuration for the plan is tabulated below in the section.
Months in Action Segment of the Action Plan
First 1 month of the action plan Should be dedicated to appoint a potential case-
manager with proper leadership qualities
Next 3 months of the plan The case-manger corresponding to an active
system should initiate to resolve the existing
customer issues and queries prior to any new
commitments
Next 6 months of the plan The CSRs should be provided with the suggested
training to resolve customer issues
Next 3 months of the plan CSRs should correspond to ‘on job training’ to
execute the leanings and capabilities and hence
an evaluation for potential candidates would be
easier
Next 3 months of the plan Approach for advanced training comprising CSRs
and BAs for researching on escalations
Next 2 months This period should be a practice period to evaluate
the measures adapted for improvements in

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operations
Table 2:
In accordance with the evaluations of the implementations, the revenue and payment
levels should be determined. The briefed action plan is a definite way to examine the
competency of the descriptive methodologies.
CONCLUSION:
The conference conducted in response to the critique mail put forward by Allen was a
commendable measure, which proved helpful in regards to Jerry for introducing the existing
limitations related to the operations management of the BPO those were severe enough to
adversely affect the growth and sustainability aspect of the business. The Exhibits provide a
support for the detailed investigation and further analysis. The performance report relative to the
operations is essential prior to the implementation of the action plan. The model, ‘high-touch,
low-cost’, would prove be efficient along with the action-plan to improvise the customer
services. A weekly follow-up with the records is beneficial to observe if any improvements.

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