When Companies like Dell are Reducing Outsourcing in Some Areas, should e-bay be Considering Outsourcing?
E-bay enjoys an advantage because it does not have any physical product that requires storage space, unlike Dell. It only requires personnel to outsource which makes it cheaper to outsource customer support services to other countries (Boyer & Verma, 2010). Email support only requires that the outsourced employees must speak English.
What are the Limits to Outsourcing Trust and Safety?
Customer service inquiries contain a lot of sensitive data such as the social security numbers and credit account numbers that can risk the safety of clients if outsourced and lead to loss of clients. Moreover, jobs within trust and safety required constant and ongoing contact with local, national, and international law enforcers who were in the hunt for fraudsters which required security of the communication infrastructure in the outsourcing countries (Barney & Hesterly, 2014). Without secure communication infrastructure for a company like e-bay, outsourcing is not worth the effort because it can lead to loss of clients. Furthermore, investing to secure the communication infrastructure can be expensive and make outsourcing Trust and Safety not worthwhile. Moreover, another limit to outsourcing trust and safety is the issue of skilled personnel. It is crucial to have qualified personnel to handle the issues of trust and safety because failure to do so can risk clients personal data.
What are the Advantages/Disadvantages of the BOT Strategy and how does it Stack up Against the other two Options Dalton Outlines in her Excel Spreadsheet?
Mrs. Dalton outlines three strategies in her spreadsheet that e-bay can adopt in outsourcing. One is to continue to outsource by involving third party vendors, second, e-bay to build its center(s) from scratch and operate them for a long time, and the third is for e-bay to contract a vendor to build and operate a center for a short duration and then transfer the ownership to e-bay. According to build, operate, and transfer strategy better known as BOT a third party vendor acquires or builds an operation center, staffs and manages it, and transfers ownership to e-bay after some time especially after the startup phase. The main advantage with the BOT strategy is the fact that the third-party vendor assumes all risks mostly the ones associated with the acquisition process and staffing. Moreover, there are many risks associated with a start-up and sharing them with a third party vendor can avoid unnecessary losses for the company (Barney & Hesterly, 2014). However, the strategy proposed by Mrs. Dalton has a disadvantage in that it is not proven or has never been utilized before. However, the fact that it has not been utilized before makes it risky. Of the three strategies, proposed in the spreadsheet, this strategy is considered hybrid with the abilities to minimize risks through contract negotiations, unlike the first one which has little chance of cost reduction and the second one which has greater risks.
What are Opportunism, Capability, and Flexibility Implications of the Strategy?
The capability of the BOT strategy lies on the e-bays team that is dedicated to outsourcing and its capability to handle even the unproven strategies that turn out successful. The flexibility associated with BOT strategy is its ability to absorb risks associated with a start-up by utilizing a third party vendor. This means that e-bay can reevaluate the strategy before making any commitment regarding resources. The opportunism with this strategy is the ability to involve a third party vendor to navigate the difficult phase of the business.
What will eBay's Senior Management do with Kathy Daltons New three-tiered Outsourcing Strategy?
Although the three-tiered outsourcing strategy presents different risks and advantages concerning cost reduction, the build, operate, and transfer strategy offers the best regarding risk or reward ratio among three plans. Therefore, e-bay will adopt this strategy that will lead lower cost and better quality.
References
Barney, J. B. & Hesterly, W.S. (2014). Strategic Management and Competitive Advantage. Harlow, Essex :Pearson Education.
Boyer, K. K., & Verma, R. (2010). Operations & supply chain management for the 21st century. Mason, Ohio: South-Western/Cengage Learning.
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