Introduction
Strategic outsourcing is delegating certain functions by a company to service providers for management. With its help, companies can focus on their core business and improve it. Outsourcing is necessary for risk management, efficient use of resources, and growth of advantages. It improves the quality of information collected through access to global databases. Bharti Airtel used strategic outsourcing to achieve risk reduction in market expansion.
Discussion
As part of the strategic outsourcing program, Bharti Airtel planned to focus on creating a functioning market in Africa and growing mobile consumers. Gupta, the CFO, also believed that outsourcing would improve the cost structure and reorganize resource consumption (Palepu & Bijlani, 2012). Bharti Airtel’s business model used outsourcing to conduct marketing campaigns in the new market without spending much on product development. By delegating some functions, the Bharti Airtel team achieved growth in the company’s culture, boosting morale and staff’s desire for development.
Bharti Airtel handed over some of its tasks to Nokia and Ericsson, putting them in charge of supplying and managing equipment and focusing on strengthening marketing and sales growth. Beginning in 2009, the company began acquiring businesses in Africa to merge knowledge. However, outsourcing proved complicated because Bharti Airtel had virtually no technical expertise in Africa (Palepu & Bijlani, 2012). Criticism of outsourcing led to a drop in stock and the departure of employees. However, in the aftermath, outsourcing helped Bharti Airtel carve out a more significant niche in Africa. If the company had stopped redistributing employees to distributer companies, they probably would not have been able to come up with stock growth and overall demand for telecom services.
Conclusion
Strategic outsourcing involves delegating and redistributing IT functions to other vendors. Bharti Airtel used outsourcing in its business model to overcome economic growth and service disintermediation stagnation. Through outsourcing, the company was able to capture most of the Indian market and establish itself in Africa. In addition, outsourcing allowed the company to control some of its human and technical resources and manage its marketing campaigns.
Reference
Palepu, K., & Bijlani, T. (2012). Bharti Airtel in Africa. Harvard Business School Case 112-096.