STRATEGIC OUTSOURCING

AT BHARTI AIRTEL LIMITED

GROUP B
"WAS BHARTI’S CHOICE OF ‘BUY’ (I.E., OUTSOURCE) FOR ITS CORE NETWORK
OPERATIONS RIGHT?“

ARGUMENT NO

• Loss of control/ excessive dependence on vendors as partners would play a huge role. Losing hardware and network control.
• Bharti Airtel Limited has been rapidly expanding its network in India over years. As its network grows, they need tremendous
capital expenditure and management time to maintain the business. Vertical integration is a process of owning or merging
companies from different stages of a supply chain. For the long tem, vertical integration enables companies to control and
improve their supply chains, reduce transportation costs and capture additional profit margins.
• Vertical Integration also develops competencies within the company and builds capabilities.
• Operations department – Concerned about handling day to day operations to vendor as Bharti had the expertise in operations.
• IT & Marketing Department: effect on time to market , support for other applications mostly legacy systems. Software not
supported by IBM no longer available.
• HR Department: Transfer of employees , absorption into system, cultural mismatch , loss of talent
"WAS BHARTI’S CHOICE OF ‘BUY’ (I.E., OUTSOURCE) FOR ITS CORE NETWORK
OPERATIONS RIGHT?“

ARGUMENT NO

• SLAs with vendors add to the complexity. Very tough to enforce

• Bharti can bring in investments for capex required to build on its own to build a vertically integrated
organization
• Costly to make in the short-term. But pays off in the long-term
• En route to become a major player in Indian telecom (100% growth in customer base py). Why go for
revenue sharing!
• An Indian startup reverse outsourcing to established western vendors and then sharing responsibility as well
• Should Bharti become a mere marketing company or replace the CIO and build a solid IT team?
• Asset heavy vertically integrated model suits long term goals
THANK YOU