Operations Management: Analyzing BPO Issues and Recommending Solutions

This report provides a comprehensive analysis of a Business Process Outsourcing (BPO) organization, examining key operational issues and proposing actionable solutions. The report begins with an introduction to BPO and a background case study, highlighting the organization's services and processes. It then delves into three major operational issues: underutilization of resources, inefficiencies due to a broken link between staff, and declining profitability. For each issue, the report identifies the causes and effects, followed by proposed solutions. The solutions include proper staff allocation, improved resource utilization, the introduction of case managers to improve communication and efficiency, and staff training programs. The report also outlines an 18-month action plan, detailing initiation, assessment, design, implementation, and evaluation phases, along with risk management considerations. The action plan focuses on restructuring staff roles, reducing costs, and improving staff training to enhance customer service delivery and overall business performance. Finally, the report concludes with recommendations and a summary of the key findings and proposed strategies to improve the BPO's operational efficiency and profitability.

Running head: OPERATIONS MANAGEMENT 1
Operations Management
Student Name
Institution

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Table of Contents
1. Introduction............................................................................................................................................2
1.1 General information about BPO..........................................................................................................2
1.2 Background case study........................................................................................................................2
2. Operation issue 1....................................................................................................................................3
2.1 Cause and effect of operation issue 1..................................................................................................3
2.2 Solution of issue 1................................................................................................................................4
3. Operation issue 2........................................................................................................................................4
3.1 Cause and effect of operation issue 2..................................................................................................4
3.2 Solution of issue 2................................................................................................................................4
4. Operation issue 3....................................................................................................................................5
4.1 Cause and effect of operation issue 3..................................................................................................5
4.2 A solution of issue 3............................................................................................................................5
5. Action Plan for Next 18 months............................................................................................................6
Initiation.....................................................................................................................................................6
Assessment.................................................................................................................................................6
Design........................................................................................................................................................6
1. Restructuring the staff's roles in the business process...................................................................7
2. Cost reduction................................................................................................................................7
3. Training of staffs............................................................................................................................7
Implementation..........................................................................................................................................8
Implementation......................................................................................................................................8
Evaluation..............................................................................................................................................8
Risk management.......................................................................................................................................9
6. Recommendations..................................................................................................................................9

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7. Conclusions..........................................................................................................................................10
8. Reference.................................................................................................................................................11
1. Introduction
Operation management is one of the key aspects of the organization especially in the
business that solemnly deals with business process outsourcing. Current business seeks to
explore the customer service delivery process and satisfies customers. In some cases, the
business may make a continuous loss due to the complexity of the operational process and
underutilization of resources within the organization. Staff management is another operational
management that is required to make the service delivery efficient within the organization. The
following report explores the business process outsourcing based on the case study of Business
Process Outsourcing (BPO) organization.
1.1 General information about BPO
Business Process Outsourcing (BPO) is a service organization with consultation services
in risk management, insurance brokered and management consultation. BPO currently operate in
100 countries, more than 50,000 employees, and over 500 offices. To ensure that all the
operations are well organized the organization has Risk Management/Insurance Brokerage,
Compensation Consulting, and Human Resource Consulting. The organization conducts various
employment data, especially on insurance benefit. One example is Health and Welfare Service
Delivery Process is one of the services that are offered by the organization (Jorg, Martin &
Michael, 2003).

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1.2 Background case study
The BPO as an organization carry out process include insurance risk management
brokered and this the organization does in two ways and these are a company or employee level.
Firstly, the company contacts the employee of client company at employee level where various
issues that pertain to the insurance benefit from the company are discussed directly. Secondly, at
the company level, the organization receives continuous employment database update from the
company which is the client to the organization. Within this process, the organization has
employment business outsourcing (EBO) that has various staffs assisting in contacting clients.
Benefit administrators (BAs) and customer service representatives (CSR) are the key staff in the
operations. BAs play an important role in updating the employment databases for clients that
normally done weekly. These staffs receive data from various client companies and loading it to
their computer databases (Ross, 2001). CSRs also play role in contacting clients through phone
and web in solving benefit related issues. CSRs, on the other hand, calls employees from client
company and get clarification on issues related to their employment data. Allen J. (AJ) Lauren
being executive vice president of BPO received an email from Sam Regan who is the CEO for
HA, one of BPO's major clients. The email seeks some updates on their customer benefits data
while also expressing dissatisfaction with the service offered by BPO to HA. In response, the
vice presidents AJ called two key employees Jerry and Ethan who are critical players to business
operational process (Gilley & Rasheed, 2000).
2. Operation issue 1
Underutilization of resources
The underutilization of human resources is the primary issue in the organization as the
company process has improper staff allocation. Staffs are not distributed based on the task

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available in each department as some departments such as customer care has a lot of issues that
require more CSRs as compared to the current staffs available. Moreover, the way CSRs handle
the calls when contacting customers reveals improper utilization of these communication
resource and this is evidence of call duration yet some calls are also escalated (Jorg, Martin &
Michael, 2003).
2.1 Cause and effect of operation issue 1
The underutilization of resources especially human resources is the primary issue of
concern in this operational problem. The main cause of underutilization of is the improper
structure of staff or staff distribution especially in areas that experience a high number of clients
and this need to be considered. The second way that makes the resources underutilize is improper
scheduling of various customers services (Anjum, 2012).
2.2 Solution of issue 1
Proper utilization of the human resource is a key solution to the underutilization of the
resources within the organization. In addition, reviewing the resource utilization especially the
call duration is important for ensuring that there is minimal wastage of call resources (Allen &
Adair, 2003).
3. Operation issue 2
There is inefficiency due to lack of managers that come in between the CSRs and Bas.
The inefficiencies of the operation are evidence by the time that lapses between CSRs and BAs is
more and there is also escalation of calls that is more throughout the operation process (Leavy,
2004).

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3.1 Cause and effect of operation issue 2
The operation issue that can be identified in the BPO is on there is broken the link
between the CSRs and Bas as presented by Ethan. The overall effect of the broken link between
the CSRs and Bas causes the process to have much inefficiency as issues that come in between
CSR and Bas are not properly addressed. The managers are supposed to respond and take care of
any client related issues that are off CSRs but are directly related or fall under Bas.
3.2 Solution of issue 2
Improvement for the current operation process is the primary way to reduce the
inefficiencies. The inefficiencies that are experienced within the business process such as the
introduction of managers between CSRs and Bas. Increasing client-staff contact is another way
that will ensure the services are satisfactory and meet the client expectations. This is also
accompanied with staffs’ redistribution to various departments to ensure smooth operation within
the organization (Kendrick, 2013).
4. Operation issue 3
Profitability is another operational issue as the current operational process leads to lose
profits for the organization. As reported the Employee Benefits Outsourcing (EBO) business has
been experiencing growth in revenue at 30% while the profitability of the business is reducing by
$5 to $10 million annually.
4.1 Cause and effect of operation issue 3
The main cause of low profitability lies on the staff management inefficiencies resulting
from the whole process. Firstly, Underutilization of the resources leads to high wastage of
resources and this increase the cost while lowering the profit that the organization makes in its
business process. Various resources in the operational process are not utilized leading to high

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cost while service delivery is not as expected. Secondly, inefficiencies in the service delivery are
particularly unprofitable since it lowers the client satisfaction while at the same time limit the
service delivery process. The overall effect is poor service delivery hence the health service
delivery is not as expected (Malhotra & Grover, 2005).
4.2 A solution of issue 3
There are some proposed mechanisms to solve the profitability issue for the organization
business operation process. Firstly, there is need to properly utilize the resources through proper
distribution of staffs to areas which are more demanding and with more clients related issues as
compared to other areas. Reduction of employee number is another suggested mechanism to
increase the profitability as this reduces the cost while at the same time ensures that the little
available resources are properly utilized. Another way to ensure profitability of the organization
is optimization of the operational expenses (Kakabadse & Kakabadse, 2002).
5. Action Plan for Next 18 months
Initiation
The identified process that needs improvement includes customer service delivery and
staff training processes. Firstly, the customer service delivery is the main company’s core
business process. Currently, as the process stands there are some broken links that need to be
improved in order to improve the efficiency of the service delivery (Susan, Michael & Pmp,
2008).
Assessment
The two business processes that have been identified as the source of inefficiencies result
from the broken link in the course of the process. This is mainly seen between CSRs and Bas that
make the entire process lack satisfaction mainly on the client side. Moreover, delink has also

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resulted in underutilization of the human resource since staffs are not properly allocated
depending on the task assigned or required (Malhotra & Grover, 2005). Secondly, staffs training
are also essential and need much improvement as the customer escalated calls. This particularly
targets the CSRs that will enable them to deal with various issues aiming at reducing the number
of escalating calls and reduce inefficiency in the whole customer service delivery process (Gold,
Thorpe & Mumford, 2010).
Design
The new process targets to improve the existing business process that is currently used by
the organization with some changes. Some of the changes that will be introduced into the process
are
1. Restructuring the staff's roles in the business process
In the new staff's structure, the organization will introduce case managers that will also
assist in the handling of the issue between CSRs and Bas. In order to avoid increase wages, some
of the current CSR will be trained on the roles of case managers to assume the new role.
Selection of CSRs will be based on their experience on the whole system and this seeks to reduce
the scenario where new managers are not well conversant with the process. In the event of more
staffs than necessary, the excess staffs will be reduced to minimize repetitive role played by
more than one staffs (Gibb & Buchanan, 2006).
2. Cost reduction
Another way to ensure that the business is profitable in the next 18 months is to reduce
the unnecessary cost especially coming from underutilize staffs. Based on the research conducted
by Jerry, there are discrepancies in staffs allocation and their approaches to issues raised by
clients and this increase the call duration. The number of calls escalated is also high due to these

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operational inefficiencies. When restructuring the staffs’ roles excess staffs will also be laid off
in order to reduce the waged and reduce the cost (Ante, 2003).
3. Training of staffs
Another major area of concern that will be effected immediately is the staff training. Staff
training will be based on two key issues, one issue is smooth operation process, the second issue
is process optimization and finally on role re-assignment. The staff needs to understand the
weaknesses of the process with the ability to reduce weakness and improve the whole process
and procedures that are used in customer service delivery (Arbulu & Williams, 2016). Secondly,
the profitability of the organization will be elaborated to the staff so as to ensure that
underutilization of resources is reduced. In the first month after the adoption of the action plan,
the training will be shifted to all employees on the need for the business to remain profitable with
minimal cost possible. Lastly, staffs are trained on the new role of case managers and their
importance to the whole process which is a key to the whole process (Anjum, 2012).
Implementation
Implementation of the action plan takes in two steps; implementation and evaluation steps.
Implementation
In the implementation stage of the plan, more resource is needed to facilitate the training
of CSRs who will be elevated to case managers. This also includes the development of manuals
for training and proper regulations for the case managers. Secondly, the report of Jerry’s
research will be used to identify no-productive staffs that need to be removed from the system.
The number of CSRs and Bas are determined with their role also assessed to ensure that all the
remaining employees have an important role in the business process. Thirdly, office

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infrastructure for the new case managers is put in place before the end of the first month to avoid
any future loss attributed to the poor structure of business operation (Desjardins, 2011).
Evaluation
The evaluation will make the management understand the importance and benefits
realized from the plan. Every aspect of the project will be documented and reported and this is to
ensure that any risk is minimised at an early stage of this plan. The progress of the plan will also
be reported frequently to the management so as the increase the level of accountability during the
implementation. As part of the system, all the accounting information will be kept and it is
expected that the key player in the plan who are Jerry and Ethan will report or give a brief
progress report at the monthly meeting of the organization. At the end of 18 months, the project
managers will table the report that will also be reflected on the organization's performance during
the period to the management for evaluation. In the first 12 months, a report will be tabled in the
on the progress and the achievement of the project. This should also include the direct reflection
of project profit on organization profit (Willcocks et al, 2004).
Risk management
Risk assessment is necessary at every stage of the plan and this is to ensure that there is a
minimal risk while maximizing profit for the business. Firstly, the first month of the
implementation period will involve vigorous training for the staff to make them aware of the
business mandate and profit goal of the business. This will ensure that all employees are aware
of every procedure and operational processes. Secondly, the project team is required to provide
progress report frequently more so monthly progress report to ensure that any risk is detected in
early enough. Risk management also aims to reduce any risks that may be associated with losses
within the business (Scheid & Gundlach, 2010).

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6. Recommendations
Based on the current situation within the BPO organization, the following
recommendation is important in order to realize the profits for the services offered. Firstly, in
order to realize profit especially during the next 18 months, the organization need to improve
operational efficiencies for service delivery process (Belmiro et al., 2000). Improving operational
efficiencies takes into account the number of staffs that are involved at each subprocess and their
role they offer. This will reduce the number of escalated calls leading to satisfaction of clients.
Secondly, restructuring of staff and their role is also needed so as to elevate some CSRs to the
position of case managers through training while at the same time reducing the number of staff.
This move will ensure a reduction in cost and maximising the profit for the organization and the
remaining staff is aware of their role in organization and profit making (Tas & Sunder, 2004).
Thirdly, intensive staff training is required for all staffs so as to equip them will the customer-
oriented skills aiming at reducing operational inefficiencies while increasing customer
satisfaction level (Pedler, Burgoyne & Boydell, 2006). Finally, evaluation needs to be done
monthly as the project team gives progress report updating the management on the progress
while at the same time highlighting key challenges to the implementation of the plan in the
organization.
7. Conclusions
In conclusion, BPO offers to consult services on management, insurance risk
management brokerage and other business outsourcing process services. The operational process
involves receiving an uploading the employment data from client companies about their
employees. The organization has Benefits administrators and Customer service representatives as
the main staffs in the process. The organization needs to increase its profitability mainly through

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improving the process and reducing inefficiencies. Staffs restructuring is also necessary for
introduction of case manager that falls in between the BAs and CSRs with the aim of an
increasing customer service delivery process. This also lowers the cost so as to increase the
profitability of the organization.
8. Reference
Allen, M. & Adair, J. (2003), The Concise Time Management and Personal Development,
Thorogood. Pp.56. ISBN 1854182234
Ante, S. E. (June 23, 2003), Savings Tip: Don't Do It Yourself. Business Weeli (June 23, 2003):
78-79.
Anjum, Z. (2012), Boundaries between IT outsourcing and BPO are becoming blurred: Ovum.
CIO Asia. 17 Oct 2012: n. page. Web. 25 Mar. 2013.
Aquino, J.N. (2007), Operations Management: For Competitive Advantage, McGraw-Hill. Pp.67