Escalation in global outsourcing

Term Paper: Escalation in global outsourcing Problem identification The major problems facing XperTrans-(C&C) deal was the fact thatthe employed human resources outsourcing (HRO) services presented a lot of serious operational challenges due to poor HRO practices and legislation, as well as implementation. It is evidently clear that the HRO implementation solution was not the right one at all (Kovasznai&Willcocks, 2012). Thus, XperTrans was unable to accomplish the payroll accuracy service-level agreement (SLA), which ” often describe the contracted delivery time and expected performance of the service” (Pearlson& Saunders, 2013). The SLA issues along with the implementation team that was also struggling to achieve the development deadlines set for the approaching project waves raised great concerns on the part of C&C. As a result, several nations go-live had to be delayed (Kovasznai&Willcocks, 2012).
Other problems encountered by XperTrans were the overreliance on salespeople instead of experts to counsel their company. Thus, the salespeople on the ground were amazingly convincing, claiming that XperTrans had fantastic capabilities and if they bagged the deal, they would build the aircraft while flying it (Kovasznai&Willcocks, 2012). Therefore, XperTrans relied too much on salespeople having no experts with global service operation experience and made a commitment to offer a level of service that they had not yet offered to any customer before. XperTrans had also set a very ambitious timeline and had promised C&C to execute an almost similar HR outsourcing solution, developed in US, to the European, Middle East and Africa (EMEA) region without first verifying the model’s viability (Kovasznai&Willcocks, 2012). As XperTrans came to realize later, “ American companies signing global deals have a very narrow minded vision, they don’t quite still understand that you can’t do it the same way in 44 countries as you do it in one” (Kovasznai&Willcocks, 2012, p. 12). Thus, the individuals having high-level viewpoints as well as high-level decisions fundamentally lacked information regarding what precisely would be needed. XperTrans failed to consider differences in languages as well as the fact that every EMEA country had its own distinctive legal system. Thus, this misunderstanding later caused a lot of problems when the system went live. Due to project’s complexity, ambitious timelines, exceptionally strict SLAs, inconsistent resource planning, as well as a lack of sufficient level of in-house know-how, all the Wave A Nations suffered severe difficulties (Kovasznai&Willcocks, 2012).
Consequently, there was a sequence of seemingly irrelevant practical issues leading to significant problems. For instance, several translations together with data and conversion problems led to serious SAP errors when the system went live. Things became so much out of control that XperTrans had to hire consultants to assist them with the implementation. Eventually, C & C lost their faith in XperTrans completely, and learnt although late that a firm should not outsource any action that directly adds to its tactical, competitive advantage. Additionally, firms ought to think twice regarding outsourcing any crucial activity-one that offers no direct competitive advantage, but very interdependent with the ones that do (Paul, 2003).
The type of problems encountered by XperTrans could have been averted or solved by risk mitigation through effective planning as well as ongoing management (Pearlson& Saunders, 2013). According to Vanlandingham (2014), project planning and management are critical disciplines, thus, would have ensured the success of XperTrans. In addition, the author identifies some failure points that usually arise during an outsourcing process: (1) misunderstanding of the service level (2) upfront risk assessment is not performed (3) contract management is ineffective. “ Risk of failure increases dramatically if the outsourcing arrangement is not well designed, negotiated, managed, controlled, and executed. Proactive and effective project risk management can help to predict and prevent significant implementation problems” (O’Keeffe & Vanlandingham 2014, p. 14).
Kovasznai, D., &Willcocks, L. (2012). Escalation in global Outsourcing Projects: The XperTrans-C&C BPO case. Journal of Infromation Technology Teaching Cases, 2, 10-16.
OKeeffe , P., & Vanlandingham, S. (2013). Managing The Risks of Outsourcing: A Survey of Current Practices and Their Effectiveness. New York: APICS.
Paul, A. (2003). Making the HR Outsourcing Decision. MITSloan Management Review, np.
Pearlson, K., & Saunders, C. (2013). Managing and using information systems: A strategic approach (5th ed.). Hoboken, NJ: John Wiley & Sons.