Description
It also lists the benefits of the proposal for bharti and for the vendors.
Strategic Outsourcing at Bharti Airtel Limited
Issues before Bharti Airtel
To keep going the fast track growth, additional hardware is required, in huge amounts as well as at a fast rate Obsolescence of networking hardware at a very fast rate A long drawn procurement process
• Takes a lot of time • Takes a lot of attention of the management
Conflict of interest with the hardware vendors
• Vendors want to sell more equipment • Bharti Airtel wants maximum coverage and capacity utilisation with minimum equipment
Integration of legacy systems of the acquired companies HR Issues – Attraction and retention of good talent both for IT as well as networking was difficult because of Aitel not being an established name
The proposal
• Buildup, maintenance and servicing of Telecom network to equipment vendors • Ericsson • Nokia • Siemens • Buildup, maintenance and servicing of Bharti’s core IT infrastructure to IBM
Outsource
Details of the proposal
• Vendor will provide the network capacity as per Bharti’s projected requirements • Payment to be made only after resource has been used by Bharti customers • Ownership goes to Bharti, but operations and maintenance responsibility rests with vendor • SLAs would be there to ensure quality of service • Initial agreement is for 3 years, subject to renewal by mutual agreement • Payment to vendors is as per the capacity installed • Bharti employees rendered jobless by this deal would be absorbed in the relevant company at the corresponding positions
Ericsson, Nokia and Siemens
continued..
• Completely responsible for end-to-end supplying, installing and management of Bharti’s IT requirements • Payment is to be made as a percentage of revenues, and would progressively decline with increasing revenues • SLAs would be there to ensure quality of service • Contract would be for a period of 5 years, renewable for another 5 years • Bharti employees rendered jobless by this deal would be absorbed in the relevant company at the corresponding positions
IBM
Issues with the Proposal - BHARTI
Operations Dept. – Concerned about handing over the day to day operations to vendor, as they felt BHARTI was more experienced and hence better positioned to handle this
IT & Marketing Dept.
• Afraid that software/hardware not supported by IBM will be scuttled • How would the time-to-market for IT based services be affected
HR Dept.
• The transfer of so many employees was a headache logistically as well as emotionally
Acceptance by leadership – Many amongst the board and in lower levels too were very very skeptical about the departure from the normal practices in the Telecom industry.
Benefits of the proposal - Bharti
Lesser investment upfront and only as per usage
• A carefully thought out contract with vendors makes them partners. Now its their responsibility to ensure that the desired hardware is in place as per requirements. They cant use extra hardware as payment is only as per usage
Freedom to the management to focus on other important areas Improved agility
• Leading Agility • Management can focus more on sensing opportunities in the environment • Take over of all IT systems (Bharti’s as well as acquired companies) by IBM would lead to better creation of usable information from the current data • Following Agility • The lengthy purchase process is gone • It is as much in the vendors favor to ensure that only the desired hardware is in place at the desired time • The whole process of responding to changing demands is thus much more quicker that earlier
Issues with the Proposal - Vendors
Additional risk to be borne
Gamble on the upcoming brand in terms of huge upfront investments Bharti employees to be absorbed in their businesses
• Different cultures, values and system • Small size of the company
To work with Bharti, vendors would have to project Bharti’s future: not their area of expertise
Benefits of the proposal - Vendors Huge opportunity to sell products for an extended time frame
An opening to lucrative deals in the Indian Telecom sector in future
• With the tremendous growth rates, this is a very lucrative market • Going ahead with this deal shows the vendors positive intent as well as risk taking abilities
Thank You!
doc_449199690.pptx
It also lists the benefits of the proposal for bharti and for the vendors.
Strategic Outsourcing at Bharti Airtel Limited
Issues before Bharti Airtel
To keep going the fast track growth, additional hardware is required, in huge amounts as well as at a fast rate Obsolescence of networking hardware at a very fast rate A long drawn procurement process
• Takes a lot of time • Takes a lot of attention of the management
Conflict of interest with the hardware vendors
• Vendors want to sell more equipment • Bharti Airtel wants maximum coverage and capacity utilisation with minimum equipment
Integration of legacy systems of the acquired companies HR Issues – Attraction and retention of good talent both for IT as well as networking was difficult because of Aitel not being an established name
The proposal
• Buildup, maintenance and servicing of Telecom network to equipment vendors • Ericsson • Nokia • Siemens • Buildup, maintenance and servicing of Bharti’s core IT infrastructure to IBM
Outsource
Details of the proposal
• Vendor will provide the network capacity as per Bharti’s projected requirements • Payment to be made only after resource has been used by Bharti customers • Ownership goes to Bharti, but operations and maintenance responsibility rests with vendor • SLAs would be there to ensure quality of service • Initial agreement is for 3 years, subject to renewal by mutual agreement • Payment to vendors is as per the capacity installed • Bharti employees rendered jobless by this deal would be absorbed in the relevant company at the corresponding positions
Ericsson, Nokia and Siemens
continued..
• Completely responsible for end-to-end supplying, installing and management of Bharti’s IT requirements • Payment is to be made as a percentage of revenues, and would progressively decline with increasing revenues • SLAs would be there to ensure quality of service • Contract would be for a period of 5 years, renewable for another 5 years • Bharti employees rendered jobless by this deal would be absorbed in the relevant company at the corresponding positions
IBM
Issues with the Proposal - BHARTI
Operations Dept. – Concerned about handing over the day to day operations to vendor, as they felt BHARTI was more experienced and hence better positioned to handle this
IT & Marketing Dept.
• Afraid that software/hardware not supported by IBM will be scuttled • How would the time-to-market for IT based services be affected
HR Dept.
• The transfer of so many employees was a headache logistically as well as emotionally
Acceptance by leadership – Many amongst the board and in lower levels too were very very skeptical about the departure from the normal practices in the Telecom industry.
Benefits of the proposal - Bharti
Lesser investment upfront and only as per usage
• A carefully thought out contract with vendors makes them partners. Now its their responsibility to ensure that the desired hardware is in place as per requirements. They cant use extra hardware as payment is only as per usage
Freedom to the management to focus on other important areas Improved agility
• Leading Agility • Management can focus more on sensing opportunities in the environment • Take over of all IT systems (Bharti’s as well as acquired companies) by IBM would lead to better creation of usable information from the current data • Following Agility • The lengthy purchase process is gone • It is as much in the vendors favor to ensure that only the desired hardware is in place at the desired time • The whole process of responding to changing demands is thus much more quicker that earlier
Issues with the Proposal - Vendors
Additional risk to be borne
Gamble on the upcoming brand in terms of huge upfront investments Bharti employees to be absorbed in their businesses
• Different cultures, values and system • Small size of the company
To work with Bharti, vendors would have to project Bharti’s future: not their area of expertise
Benefits of the proposal - Vendors Huge opportunity to sell products for an extended time frame
An opening to lucrative deals in the Indian Telecom sector in future
• With the tremendous growth rates, this is a very lucrative market • Going ahead with this deal shows the vendors positive intent as well as risk taking abilities
Thank You!
doc_449199690.pptx