Business Report: Telstra Outsourcing Analysis and Recommendations

Executive Summary

Outsourcing services provides one way for entity’s to reduce costs such as labour, procurement and other production costs but is also prone to various challenges. This paper assesses Telstra’s outsourcing decisions and makes recommendations to better these decisions.

Due to its human capital intensive business; Telstra has outsourced services such software development and call centre services through partnership with other firms such as IBM, Infosys and EDS. Challenges to outsourcing have however been encountered with regard to ethical rating of its outsourcing decisions such as massive loss of jobs for Australian workers and exploitation of individuals providing the outsourced services. Secondly; service quality deterioration has also affected Telstra’s outsourcing decisions.

To manage these challenges various recommendations have been advised. First the company needs to evaluate the cultural distance between the offshore providers and the customer base to ensure customer satisfaction with outsourced services. Secondly; appraisal of the providers’ capabilities and working conditions is needed to ensure they meet technological needs of the company and employee satisfaction for better performance is necessary. Evaluating services that can be economically provided in-house to avoid unnecessary loss of Australian jobs is also advisable with transparent outsourcing procedures bearing a potential to mitigate employees unions, blockage of the company’s outsourcing strategies. Go to introduction here.

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