Procter & Gamble : Global Business Services
Submitted to: Suman Bhattacharjee Course Instructor Compensation Management
Submitted by: Md. Mohaiminul Hasan Khan ID : 150, Batch : 46D MBA
Date of Submission : 19th May 2013
Institute of Business Administration
An acceleration of profit margins and a competitive advantage are therefore the ideal outcome of BPO engagements. high-end services to comparably low prices. P&G can use a great cost advantage and the accomplishment of assignments in short time spans compared to in-house production. its product line included foods and beverages.
With help of BPO. Prior to the sale of Pringles to Kellogg Company. BPO can improve the efficiency and productivity of a company. That leaves P&G with the opportunity to receive high-quality services while being able to focus on their core activities. Their Global Business Services unit is a large unit of 5700 members with a mission to transform the way business is done. Sometimes. cleaning agents and personal care products.
Contract with an outside company for BPO while retaining current employees. Hidden costs. This will have both advantages as well as disadvantages. Offshore outsourcing delivers the additional advantage of making precious resources. also known as P&G. strategic failures or security threats are only three major risks that might occur especially when end-to-end processes are required. suppliers lack the specialization to manage highly complex processes in service segments such as financial services for instance. USA. He has four options to choose from which will be discussed below. Thus. Ohio.
. The employees of P&G will be retained instead of handing the decision of laying them off over to the outsourcing company managers. Its products include pet foods. Depending on the complexity of the outsourced service or project. who operates various activities of the buyer company offshore.Introduction
The Procter & Gamble Company. BPO can also be a risky endeavor. infrastructure and innovations accessible for P&G.
This option is the same as the first one however there is one major difference. Suppliers from all parts of the worlds offer even complex. is an American multinational consumer goods company headquartered in downtown Cincinnati. For clarification the pros and cons of each will be separately discussed. The service provider often operates from another continent. Communication errors are often cited as a major drawback of outsourcing. it might be the case that vendors will not live up to P&G's expectation.
This is the business strategy of engaging with a third party service provider.
Besides numerous advantages. They have indeed stuck to their mission statement for the past years but recent problems led Dave Walker to decide on what to do with this unit.
Spin off as a separate entity.
A small. The division of outsource providers establishes an independence between the different disciplines that should yield a higher quality result. the outside company wouldn't have to train them from the start to make them familiar with the current situation. the employees are already familiar with the job structure and responsibilities of GBS. Using specialized outsource providers means tapping into a smaller market with lower costs and less turnover than larger providers. they would definitely feel obligated to be compensated for their sacrifice of authority by P&G. In this way. providing P&G with more refined outputs than the previous option. a testing vendor can provide honest insight about the developed product's quality since they were not responsible for developing it.
This new method would have advantages of getting the creams from all the best players in the market. Retaining the jobs of 5700 employees would show them that P&G cares about their employees. Thus.Pros
P&G known for it's care for their people would obviously have an advantage if they could pull this off. either monetarily or in some other ways. Although the top managements would change but they would start with a hierarchy that has already proven to be effective prior to their take over and is efficient as a team to work on their job problems. all the major functional divisions would be handed over to different companies with respective expertise. multisourcing creates a system of checks and balances that
. specialized firm can offer more expertise at a single discipline and for at less cost. This would ensure top quality results and outcomes in individual divisions. the technical side will be dealt by best IT firms. thus. affecting their work performance. Finally it would not be wise to think that all the 5700 employees would be kept on the team after the hand over. It would be stressful and demotivating to adapt to the situation. even if a company agrees to it. Furthermore. ensuring the jobs to all employees would be futile.
Outsourcing the GBS divisions to best-of-breed companies. The financial services would be dealt by firms with financial expertise.
This option is similar to the previous one with just one major change. The whole of GBS will not be shifted to a single company. The most obvious advantage is the ability for them to leverage the expertise of vendors specializing in different disciplines. instead. Also. increasing the span of functions and overlapping responsibilities to lay off some more employees would be another choice that they would take. Not being laid off will have a reassuring effect on the employees and would give them a moral boost.
The transition of changing the top management structure might have a negative effect on the employees. outsourcing deals like this will be easier to finalize compared to one company taking over the whole of GBS. thus. Also. For example. it's also hard to find a single company who would agree on this sort of deals as they would want to have complete control over their team. Also. thus. Laying off costly employees and replacing them with more cost efficient ones is a common tactic that can be used by outsourcing companies.
The final option was to keep GBS in-house and not outsource their services at all. Communications suffer without a single point of contact.
Keeping GBS in-house was a risk that P&G has to take. There would be better management and synergy between all the divisions of GBS as they are all under the same umbrella. Whether there would be more cost savings in the future is not certain right now.
The pros of keeping GBS in-house are a lot. This would reinstate the feeling of belongingness within the employees. synergy will be minimal and the output to P&G will be faulty and unsatisfactory.
Keeping GBS In-house. this would ensure alignment of the brand message of P&G. And also there might be room for process improvements. Therefore. they still had a lot more to achieve and a lot more room for being efficient and effective towards P&G.
. P&G will have to use its own time and resources to manage the project each step of the way. organize. the future could hold a lot more potential for this unit. Less expertise on respective divisions is also another disadvantage that they have to deal with. With all the divisions separated from each other both in terms of management structure and location as well.promote quality and lower risk of problems. With the additional expertise of multiple outsource providers comes the management of additional vendor relationships. making it more difficult and time-consuming to on P&G's end to manage and maintain vendor relationships. Also. and coordinate the output of the multiple outsource providers. Thus. Everyone will be concerned about their individual objectives and prioritize their quality instead of GBS as a whole. there are numerous management concerns in this option. As GBS has only just been formed in 1999 and was still developing as an organization. Without a single outsourcer providing a turn-key solution. Handling near about six thousand employees is a lot and would incur a lot of costs in the future.
However. on its financial area. Letting things go the way they are would strengthen employee confidence over P&G and its management. it will be hard for them to integrate their outputs and manage their teams to work with one single goal. The management structure has to be maintained by P&G and this is resource consuming. As P&G had their motto inclined towards their employees and the market already had a preconceived idea about their care and concern. for example more cost savings could be achieved. Onshore employees will have to manage. it was a viable option. This option unlike the other has a different approach as it is basically a reactive approach.
only one has to be chosen for coming to a decision. the disadvantages of this option are far more probabilistic and not very certain. Provided that it has been a P&G motto to be sensitive towards their employees and show care and concern. to assist GBS in its journey with P&G for the future. I would have to choose the last option of keeping GBS in-house despite their cons. Given that there are enough brainstorming. if not totally. these drawbacks could be mitigated partially. despite all the pros and cons of the options presented in front of Dave Walker.