The Outsourcing Organization - Etisalat - Free Paper Sample

Introduction

Etisalat is a telecommunication firm that entails telecommunication and internet services in United Arabs Emirates (UAE). The telecommunication company has its headquarters in Abu Dhabi, UAE and has three regional offices in Northern Emirate, Dubai, and Abu Dhabi. In UAE, the telecommunication company operate in a mobile penetration that is considered the highest in the world (200%) (Kolachi and Akan, 2014). Etisalat UAE become reputable for its capability to roll out its Fiber-To-The-Home (FTTH) network systemin in the United Arab Emirates. The organization had completed the FTTH roll out for 90% of users in Abu Dhabi, thus positioning the city as the first in the universe to covered by fiber.

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Establishment

Nonetheless, the Etisalat UAE experienced increased competition from DU, a telecommunication firm established in 2005. The latter had favorably lower services charges when compared to the former while they offered similar services. It prompted the Etisalat UAE to minimize its service charges to match that of the new telecommunication firm that would the firm to maintain its client base. The organization’s most effective strategy was to outsource some of its client’s services operations to Egypt that offered quality customer services operations at a relatively cheaper service charge. In most cases, the objectives of an outsourcing process are to achieve quality services at minimized cost. Etisalat UAE was coerced to outsource some of its client’s services operation to Egypt when DU telecommunication firm offered similar services at a relatively cheap cost. Nonetheless, the organization has to follow a certain outsourcing procedure to effectively achieve its objectives. The firm will need to implement a clear outsourcing strategy while at the same time identifying major shareholders, main performance indicators of the team and activities outsourced and appropriate change management.

The Process Layout

Etisalat UAE need to determine the customer service operations that need to be outsourced to Egypt. An agreement has to made between the Etisalat and the organizations located in Egypt. The process will involve incorporating different team in the two countries to ensure a smooth flow of activities to the telecommunication firms in the latter country. For instance, the team located in UAE will be obligated to receive the customer services request and outsource to the teams in Egypt through a well-structured system (Von Glinow, Drost and Teagarden, 2002). There is need for training and development for the parties involved to ensure that the clients will not be in a position to feel the differences in clients service if they have to compare before and after outsourcing process. Apart from training, there is need for a standard procedure that will guarantee both parties in the two different countries are on the same page.

Communication to Major Shareholders

Communication is a critical factor in any given change process. The major shareholders should always be brought up to speed concerning all the steps being taken in the outsourcing process. Critical changes are received positively when any given process made is shared to the shareholders. For instance, whenever such critical information is conveyed to human resource manager, he/ she is a better position to communicate the changes to employees that are beneath his/ her position.

Change Management

It is an important phase in outsourcing process. It involves communicating the changes that are expected to be made to the employees to enable those that their position will be made redundant to look for new opportunities while those will be retained to understand their new roles in the organization.

Monitoring and Improvements

The establishment of key performance indicators is critical in the outsourcing process as it guides determine if the services outsourced are operated to desired efficiency. It will enable the organization determine if there is need for improvements to avoid losing its client base to its rival firm.

Employee Satisfaction

Unemployment is a major issue in Egypt. Graduates seek to get employment to enhance their living standards. The outsourcing of client service operations to the nation means that a lot of graduates will get an employment opportunity to improve their living standards. People that get a chance to get the job opportunities work hard to retain their position as understand that life is challenging when they are jobless (Von Glinow, Drost and Teagarden, 2002). Additionally, there is a huge difference in lifestyle between employees in Egypt and UAE. Employees in the former group are satisfied when the wages given can sustain their basic needs such as food, clothes, or housing and thus have little expectations in terms of benefits and compensations. In the case of employees in the latter countries, they have high expectations in terms of compensation and rewards which means that they are always proposing for wage increase to match their expectations. In that perspective, the outsourcing of clients’ service operation to Egypt leads to employee’s satisfaction as they have minimized expectations in terms of rewards and promotions and are actually satisfied to even secure a job.

Strategy

Etisalat UAE monopoly situation was threatened by the establishment of DU telecommunication company that offered similar services at minimized costs. Etisalat had to find a strategy to maintain its clients base. It made the decision to move from a revenue driven model to a cost driven model. It was a strategy to maintain the quality services offered to clients at a low cost to match that of their rivals (Schuler, Jackson and Tarique, 2011). Therefore, outsourcing client service operations to Egypt will enable the firm to save a lot in terms of cost per employee while at the same time entailing similar quality services that made them a reputable organization. Consequently, outsourcing the client’s services operations to Egypt was strategic since both nations speak English and Arabic and thus easy transition of responsibilities to the outsourced country.

Recruitment

As earlier mentioned, Egypt has a high unemployment rate due to political instabilities that are prevalent in the country. The political turmoil has rendered a lot of people jobless because it is challenging for people to operate businesses in an uncertain environment. These factors make it lucrative for Etisalat UAE to outsource its client’s services operations to Egypt since the nation has a lot of young educated people that have the capability to entail the same services offered in UAE at affordable prices. Therefore, Etisalat UAE is able to maintain its annual profits since it is a position to entail similar quality services at minimized cost (Kolachi and Akan, 2014). It enables the organization to maintain its client base that had started shifting to DU telecommunication company due to their relatively lower service rates when compared to Etisalat telecommunication company (UAE).

Training and Development

Customer service operations is the only segment that is being outsourced to Egypt. It is affordable and effective to put all the qualified candidates in a certain room to enlighten them on what is desired of them as well as guide them on how to deal with clients. Consequently, the outsourced organization may rely on existing resources in the parent firm which will help minimize cost (Kolachi and Akan, 2014). Etisalat (UAE) has training and development classes that recruiters must attend to enhance their skills and knowledge needed to maintain the organization's reputation and legacy.

Compensation and Benefits

Egypt has a relatively lower cost of living when compared to United Arab Emirates (UAE). Therefore, that salaries and other compensating fees offered to the workers is much lower in Egypt when compared to UAE. In that perspective, Etisalat UAE are able employ competent and reliable workers that would entail similar quality services to those observed in UAE at minimized cost (Schuler, Jackson and Tarique, 2011). Consequently, employment security is critical to the logistics firm because it enables them to retain their most skilled employees. The organization understands that when employment security is jeopardized, it will be at a loss given that it has invested in the recruitment, selection, training, and development of the workers.

Conclusion

Etisalat UAE decided on outsourcing its customer service operation to Egypt when its monopoly status was threatened by the establishment of DU telecommunication. The later organization provided similar services to Etisalat but at a relatively lower service cost. Henceforth, Etisalat had to outsource some of its functions to organizations in Egypt that will maintain quality services at affordable cost. The outsourcing strategy was instrumental since it enabled the organization to maintain its clients base that was had been threatened upon the introduction of DU telecommunication company. In that perspective, the outsourcing strategy was a critical decision to meets its organizational objectives such as client satisfaction.

References

Kolachi, N. and Akan, O., 2014. HRD Role in Organizational Development (A Case of Corporate Thinking at ETISALAT, UAE). International Business Research, 7(8).

Schuler, R., Jackson, S. and Tarique, I., 2011. Global talent management and global talent challenges: Strategic opportunities for IHRM. Journal of World Business, 46(4), pp.506-516.

Von Glinow, M., Drost, E. and Teagarden, M., 2002. Converging on IHRM best practices: lessons learned from a globally distributed consortium on theory and practice. Human Resource Management, 41(1), pp.123-140.