Please enable JavaScript.

Coggle requires JavaScript to display documents.

J-Trading (Question 1 (Helpdesk (Risks (Helpdesk is a mix of codifiable…

- - - - Cost
        
        Operating costs lower - economies of scale of vendor
        
        Potentially less management time to supervise operations
        
        Reduce staffing level of the IT department
        
        Another collateral objective would be the potentially access new technologies from vendors - getting better call data for the helpdesk for example - access analytics and costs saving innovations
      - Quality improvement
        
        Free internal resources to refocus: leaving time to his team to work on other more complex projects at the department level
        
        Hoping that the vendor would be better at it than the in-house service
      - Non core activities
        
        IT only a support function to the business
        
        If costs are reduced by outsourcing, gives additional resources to invest in some core activities of the company
        
        - WBS lecture 2
        
        Quite standard processes, which can be replicated in another set up
        
        Low value added activities, especially datacenter (infrastructure management) - ideal for outsourcing - - lecture 1 WBS live
        
        However the datacenter operations remain quite critical to the company's operations
    - - Operational risks
        
        Type of process: transparent process - at least for the service part
      - Structural risks
      - We clearly saw that an issue on the datacenter can quickly costs a lot to the company
    - - They could have thought of keeping the infrastructure in house as they outsource the service only
      - The infrastructure cost at J trading was lower than the proposed price of the provider.
      - If the supplier is quite close to their datacenter, that avoids moving the equipment and reduces risks
      - Switching costs of the service only are much lower in case the provider does not perform or the relationship does not work out
      - The cost saving here is not obvious
        
        The move is costing the company $81,000, which would be covered after 16.5 months
        
        The issue with the move costing a further half day of revenue lost, equivalent to $1M
        
        Looking at the cost benefit analysis, every monthly recurring costs is higher than in house datacenter
        
        Except the disaster recovery (which might be a concern about the supplier's proposal and management costs, which might not be quantifiable, but still existing to some extend
      - As moving the datacenter proved to be an expensive exercise
  - - - The analysis of the cost reduction achievement is limited by the lack of data in the case
      - Although there seems to be an overall reduction in the budget,
      - But not clear whether linked to the helpdesk ooutsourcing
    - - Although things were going well at the beginning, issues started to arise later
      - Quality could have thought to be better as the supplier should have better knowledge of the kinds of issues related to IT helpdesk
      - Have more dedicated staff with knowledge on those issues
    - - Here again not a core activity of the company
      - With less risks on disruption of the operations, but could be severe on the long run should the supplier not perform
      - Here also a low value added activity
    - - Helpdesk is a mix of codifiable processes like software installation or printer issues
      - And others more opaque like network issues and SAP suppor
      - Therefore need to think about different way to deal with those issues
      - More structural risks here as provider needs to keep staff trained and knowledgeable about the changing tasks as software get upgraded
      - Switching costs are not too high, as they could easily reintegrate the service in house, although would have recruit again
- - - - Vagueness of the financial proposal by DR Solutions - not very transparent
      - Mainly focused on past experiences
      - But also the price and the service proposed
      - Both of them quite broad suppliers of services, although Yoshiko hosting newly acquired a company to provide that service
      - Shortlisting of vendors
      - From 5 down to 2
      - Clearly emphasized on the quality and experience
      - Took the largest supplier with best reputation due to the criticality of the transfer of the datacenter
    - - More complicated comparison as proposals are quite different
      - CMPI more of a niche supplier vs Outsourcing solutions being a broader supplier
      - Low choice of suppliers due to the criteria requested
      - therefore no shortlisting possible, no benchmarking of various options
    - - Configuration of the outsourcing
      - Supplier selection process
        
        not much detail on that
        
        Not much time in front of them to consider the right criteria
        
        Can assume they have checked reputation
        
        Technical capabilities for sure
  - - - Quality
      - Costs
      - Experience and reputation
- - - - Try the two vendors simultaneously
      - Create a deeper relationship with vendors - may have a longer learning curve necessiting more training
      - Compare performances and learn from one another - but also promotes competition and limits complacency - lower dependency on one supplier
      - less economies of scale though
      - Use incentives to perform
      - More costly in coordination and relationship management
      - Provides a alternative if one of them is not performing - less risky if it is business sensitive for operations
      - Allows for negotiation power when it is time to renew contracts - give leverage
      - Panel configuration at a small scale
      - Risk that the suppliers may be less willing to invest in that relationship or have dedicated team for that particular customer
      - Complexity in integration of the two providers into one standard service
      - The higher switching costs could be an issue, but lower than with a single supplier - and the process is not core to the company although operationally impacting
      - Keeping high depth and quite a low breadth of the supply base
      - With the client company doing the service integration - keep better control and allows standardisation of processes between the two companies
    - - Kept for more complex tasks - less codifiable - while most of the service types are straight forward, others like SAP issues or Operating System problems could require more expertise
      - Division of task based on the service type, which could be filtered by a first operator
      - Avoids escalation fee
      - Provides better care to equipment and faster turnaround
      - Diffferent Sourcjng model, using a joint venture to try to capture the outsourcing advantages but retain some control over operations
      - Could be some sort of pilot project - trial with a smaller scope and then progressively increase ref: proven practices for effectively offshoring IT work - Rottman and lacity
      - Pilot would help on the learning curve, and creates a coordination format easier to manage
      - Alternatively include a full time J-Trading staff member in the provider's team to take the most challenging issues
    - - Create a blend of control and coordination
      - Control as it is quite codifiable processes, with clear metrics to be checked upon for performance
      - For instance, one of the Metrics can be customer satisfaction
      - And include an incentive system based on performance to reach those Metrics - to help quality improvement
      - But coordination in terms of better train and accompany the provider
      - Might be costly at the beginning but could fade away as service improves
      - With time, coordination disappears and the relationship with the vendor becomes more transactional, with metrics guiding the supervision of the performances
      - Have an on-site engagement manager to help focus on some issues, and have better proximity to help foster the right quality of service
      - Although not necessarily an offshoring context as suggest Rottman and Lacity, having someone from the company manage the outsourced service can help coordination
      - That can be more costly but can help keep a certain level of quality and avoid frustration among users as well as speed up the learning curve
- - - - Reduce costs
      - Here there would be very little consideration for quality of service compared to a domestic company
    - - Operational
      - Structural
    - - Datacenter
        
        Once the move was done, maintaining the servers is composed of transparent processes
        
        Could be easily offshored to a supplier in a lower wage country to make more savings
        
        In a colder coastal country to have better cooling system
        
        Where possible expertise in datacenters and IT service can be found, reduce the structural risks
        
        Captive center would not make sense, as this is not a core business, there is not much institutional knowledge in that operation to protect and it would take resources away from the core activity
        
        the selection process will be very important here as the risk is to contract an incompetent vendor who is unable to run the datacenter properly. reputation and previous experience will be very important selection criteria in that case
      - Helpdesk
        
        Offshoring is possible, as for a call centre
        
        Would help to cut costs by going to lower wage countries
        
        Solving some of the codifiable issues
        
        But would be risks of cultural issues with the offshore country
        
        Time zone differences and different holidays might be issues too
        
        language consideration would need to be taken, especially with the need to have a Japanese / English speaking person
        
        And structural risks are more present here as the supplier is far away and could become non responsive
        
        But again the switching costs are quite low