Business process Outsourcing (BPO) is a service area which is likely to experience considerable growth in the future. The global BPO value is estimated at US$140 billion and this is expected to grow at a compound annual growth rate (CAGR) of 3.1% until 2021. The main reason for the growth of the industry is driven by the needs of the business to reduce costs (Cision, 2016). They seek to focus on the core needs of the business and naturally this is highlighted, by the need to outsource non-core activities to specialists who will be able to undertake such tasks. Therefore, several administrative as well as software related tasks are being outsourced currently.
Sri Lanka is an upcoming location for outsourcing business; this is primarily due to the country possessing a superior education system which has produced an employee base with high-end skills which are paramount to the development of the industry. For instance, the country produces over 5,000 accountants annually and most of them have read for a British qualification. Likewise, the labour wage rates are relatively low and the attrition rates are estimated to be nominal at approximately 6.6% (Tennakoon, 2015). This can be compared with attrition rates in excess of 10% in India for the same industry. Meanwhile, industry growth is supported by the government, since the business is privileged to enjoy special tax and other concessions.
There are several companies who have identified these advantages and established their operations in the country. These companies are primarily focused in providing services to international markets whilst mainly concentrating on developed markets. Such operations of this nature generally promote additional employment opportunities in the market while maximizing the benefits affiliated with the outcomes. Since, India boasts of a significant outsourcing operation, Sri Lanka has recognized the benefits of this industry and have embarked on expanding its presence in this environment, to achieve positive outcomes.
The organization which is selected for the discussion is ABC LTD., one of the prominent players in the global medical billing outsourcing industry. The role of the company is vital for the industry as the company will assist the medical practitioners to manage their medical claims. Further, there are several areas which require coding and data entry. Therefore, Doctors as well as the hospitals are positioned to outsource these aspects to the company and allow them to process, whilst concentrate on after-care services of the patient. This will enable them to enhance the service related aspects.
The company specializes in management of healthcare practices at hospitals. For instance, billing processes, medical insurance claims, handling of claim denials, management of administrative aspects affiliated with the hospitals including management of revenue analysis and financial management aspects are some of the areas which can be serviced by a BPO operation. Thus, the above aspects remain vital to achieve appropriate benefits and reach positive results in the future (ABC, 2018). Therefore, ABC LTD will enhance the quality of these aspects and ensure that the management complies with local as well as international requirements.
Meanwhile, the company benefits since they can minimize labour costs whilst increase the accuracy of the claims, due to the availability of cheap labour in BPO service industries, as opposed to labour costs incurred by developed countries. Whilst the company has established several centers of operation, the business in Colombo primarily concentrates on improving operation related outcomes such as medical insurance claims. The services they provide covers several developed countries based globally and comprise of ensuring the quality of healthcare services are improved, and thereby enabling healthcare institutions to avoid focusing on administrative and operational functions.
3.0 Structure of the organization
The organizational structure depicts the formation of the various responsibilities within an organization, to achieve a common goal. (Millar, 2009). Meanwhile, it clearly portrays how each role is inter-connected to achieve a common goal. Therefore, possessing the appropriate organizational structure is paramount, as it is bound to lead the organizations to perform their tasks and achieve the relevant outcomes in an appropriate manner (Holtzhausen, 2002).
Meanwhile, ABC has experienced considerable evolvement of the structure, due to the various growth needs they have encountered in the past. Thus, the overall outcomes associated with the structure and its development remains vital to achieve the desired results.
Figure 1 – Current organizational structure (ABCs, 2018)
The above structure depicts the geographical areas remain the basis for the division of the structure. While the administrative functions are primarily housed at the head office of the company, the country geographic operation to function as one tightly knit unit within the company. The policies are developed at an organizational level and this will entail these units to adhere to the instructions administered from the center.
The structure is not tall enabling employees from the bottom interact with the top-level positions and provide their points of views (Rosenberg and Keller, 2016). The top down as well as bottom up communication is occurring in an efficient manner and results could be achieved from these outcomes. The centers on the other hand, tend to be considerably performance oriented and competitive with each other. Therefore, the overall performance of the center is measured using several attributes which could be included in these aspects.
Thus, the above organizational structure is believed to provide an appropriate framework for the company to operate and achieve the envisaged results.
However, it is also important to note that the organization faces considerable challenges and the role of the organizational structure in mitigating the issues remains important (Campbell and Strikwerda, 2013). The next section of the discussion will highlight these key challenges. Meanwhile, appropriate recommendations can be provided in the context of solving these issues. However, such recommendations require to be targeted at optimizing performance of the organization to achieve appropriate outcomes consistent with the needs in place.
4.0 Challenges and issues
The organization faces several challenges which they require to address. Management of these challenges will enable them reach appropriate results and benefit from the outcomes. Whilst identifying these issues remain important, it is also necessary to understand the impact it is likely to create on the overall performance aspects of the organization in the future. Thus, these areas are important aspects which will provide positive benefits to the parties. The following are some of the key issues identified.
4.1 Inconsistent performance
The centers require to maintain their performance levels; the top management enables each center to determine the strategies it intends to undertake, to achieve the required performance criteria. Therefore, each center may outline a different course of action. This will ensure that each area of the company will achieve appropriate levels of performance and appropriate results can be achieved. The main issue that the company has experienced, is the lack of consistency in this area.
The performance scores across the operational centers of the company indicate that there are several inconsistencies observed in relation to the performance of the centers. This is an issue which the organization needs to address and solve effectively. The presence of inconsistencies in performance could impact client satisfaction.
For instance, if the client is attached to the Sri Lankan center and for some reason his account requires to be transferred to a different center, the overall service level is impacted and the client is likely to encounter either satisfaction or dissatisfaction due to the changes he is likely to experience. This highlights that an appropriate level of consistencies requires to be maintained within the centers, and ensure that the performance of all these units are aligned to maximize the outcomes.
4.2 Culture issues
Culture of the organization is an aspect which drives the overall organizational performance. If the companies fail to develop an appropriate culture, this could impact the outcomes in terms of performance. Thus, the companies are seeking appropriate ways to develop culture related values which will eventually promote the performance of the organization in the future. Possessing the relevant culture in place will lead the parties to achieve appropriate outcomes and eventually benefit from these results.
The centers have different work cultures in place; meanwhile, the heads of the centers possess the ability to influence the creation of culture within the center. This is partially allowed since it is the heads who are likely to undertake decisions that are affiliated with these aspects. However, in most instances the issue at hand and the culture of the organization do not correspond and resultantly, inconsistencies occur in the performance criteria of the organization. Thus, appropriate steps require to be undertaken to ensure that such issues are solved and problems are managed effectively. Therefore, it is evident that culture related issues exist and appropriate solutions require to be provided. It is however, clear that these centers are situated in different geographical locations and possess their own unique culture and value systems. However, the main issue being that this could impact customer satisfaction negatively.
4.3 Knowledge transfer issues
In the BPO industry, the role of the center and results derived remain an area of importance; resultantly, there are areas of knowledge that other sections of the organization can benefit from. Being able to share this knowledge will lead the organization to achieve relevant outcomes.
Costs are likely to be saved and specific factors with the correct focus can be used when the knowledge areas are shared effectively. Therefore, these activities will eventually maximize the benefits that the parties will enjoy in the future. This is an area of importance to companies who are engaged in this nature of business.
Meanwhile, transferring knowledge amongst the units remain a limited possibility; since they are unwilling to share the knowledge achieved regarding issues and experiences they have undergone. Therefore, the competition between these country-based units will make it difficult to identify the best practices in one country and to implement them in the other. Thus, the knowledge transfer remains a challenging area for the company and necessary steps require to be undertaken, to implement best practices. While the company has systems in place to transfer knowledge amongst these locations, it is observed that the actual effective usage of these facilities remains limited by nature. Thus, the competitive nature and the compartmentalization of the structure prevents one unit from benefiting from the experiences of the other, regarding best practices that are in place and how the parties will be able to benefit from these outcomes.
4.4 Employee attrition issues
When an organization of this nature is faced with employee attrition, it is apparent that organizations require to pay prompt attention to remedy the situation. The BPO industry is considerably dependent on skilled employees. If the organization is experiencing high labour turnover, it is unlikely that the company will be able to reach the desired outcomes and perform consistent with the expectations of the clients. Thus, addressing of this issue promptly is critical for the company to achieve progress and improve future performance levels.
The company has faced inconsistent levels of attrition. Meanwhile, there are different issues within the same functional area which can lead to attrition related issues. This is another area that the management requires to focus on resolving. Lack of focus and attention to these issues are likely to aggravate the attrition problem and create long term issues within the company. This is attributed to the lack of coherence regarding the various practices within the company which could lead to high level employee dissatisfaction.
4.5 Training and development related issues
The employees require to be developed consistent with the needs of the organization. The main issue is prevalent at center level, where the requirements for training and development are likely to differ. Thus, the company has allowed the center management to decide regarding their training requirements and undertake activities to meet the needs of the employees. Meanwhile, performance appraisal is administered for each employee to understand and address their specific needs and thereby achieve beneficial results and improve the overall organizational outcomes. Therefore, training and development related issues remain vital to achieve the above outcomes.
The employees who are working in centers in countries like India and Sri Lanka are not exposed to the systems that are operating in many developed countries. Thus, they will require to be developed to identify the needs of the clients and ensure that they work towards fulfilling the expectations according to their needs. Due to the differing objectives in training, the training requirements vary in each center. Therefore, each center conducts their own training program thereby leaving hardly any control at headquarters, regarding the quality of the contents and curriculum. Therefore, the center managers primarily determine the areas of training required and the mechanisms of conducting same. Thus, the overall integrity levels associated with training activities remain low.
One of the main areas which requires attention and addressed in this discussion, is the need for coherence and integrity of organizational practices. While the company is a single operation, it is apparent that the regional centers have their own approaches and policies which are likely to undermine the total integrity of the operations. This lack of operational integrity remains an issue which does not assist to resolve the problems the parties are currently faced with. Therefore, the employees are likely to be demotivated since they are directly operating under the purview of the center manager and their career growth opportunities are limited.
Thus, the above discussion highlights that there are four main areas that are likely to impact the overall operations of the company and these issues are either directly or indirectly related to the structure of the organization. Therefore, the management requires to evaluate their current operations and implement remedial action where necessary, to ensure these aspects are positioned to achieve appropriate results. However, changing the current structure and the set-up, will also be considerably difficult. Therefore, the organization is required to develop the structure consistent with the needs they possess. Resultantly, they will be able to achieve positive results provided they initiate necessary steps to change the manner they operate.
5.0 Proposed structure
The organizations develop and the structure also evolves. Meanwhile, the evolution of the structure does not mean that it is the approach that will optimize the outcomes. However, it is important to note that implementing the appropriate structure will enhance the outcomes and the operations in the future context (Carpenter, 2013). Therefore, an appropriate structure requires to be developed, to optimize performance related outcomes. The mere evolution of the structure alone, will not guarantee that appropriate outcomes will be reached the by parties. This is the primary reason that ABC requires to re-evaluate the issues associated with the structure and develop an appropriate solution subsequently.
The issues discussed indicate that the company has a compartmentalized structure. In other words, the organization require to operate within the assigned geographies where each unit operates separately. This has created competition among these units and sharing of knowledge, culture and the experience does not occur. This is leading the organization away from the performance focus. Meanwhile, to optimize the performance of the organization, changes will require to be introduced to convert the structure from a geographic to a task oriented structure. Such a change will enable performance to conform to the needs of the organization in the future.
Figure 2 – Changed organizational structure (author developed)
The above structure conveys that the departments are divided based on tasks. Therefore, each country will contain parts of each department depending on the skills they possess. For instance, if the Sri Lankan team performs well in the prescription handling area, that should be the area that is assigned most to the Sri Lankan operation. However, each geography should not be limited to a single task either. This will ensure that the departments will be able to operate according to the needs of the organization and achieve envisaged results.
The country centers should be operated by a country head, who will mainly concentrate on administrative aspects of the organization instead of working with operational features. This will enhance the ability they possess to achieve the needed benefits and ensure optimum performance are achieved. Therefore, the Country Head will ensure that the training acidities, knowledge sharing activities and the IT platforms are suitable to function according to the best interests of the company and support the operational aspects of the company.
Meanwhile this task oriented culture will re-define competition; for instance, the competition will not be based geographically; however, the different departments can contribute to increased competition and manage the issues appropriately.
The departments will be encouraged to share knowledge within and work to develop the employees. The departmental heads will be assigned targets and they will work to reach these targets in an appropriate manner (Štorga, Mostashari and Stanković, 2013). Thus, the overall outcomes will enhance the required results and maximize the relevant benefits in the future. Thus, the above structure will facilitate performance optimization whilst promote benefits amongst the parties.
Implementing changes to the structure is always considered a challenge; meanwhile, it is important to identify how teams are formed in each geography to undertake the required changes. Likewise, the country heads enjoys a high level of independence to manage the current units under their purview. This authority will eventually cease and they will be required to focus more on administrative functions (Bassett and Carr, 1996). This will ensure that the organizational outcomes are managed efficiently and there is a higher level of integrity. However, if the employees are not divulged the details of the benefits nor encouraged to participate in change activities, they are likely to be reluctant and the overall resistance to change will be considerably high.
The above discussed structure change is the main approach that ABCs should undertake to solve the problem at hand. Resultantly, the changes to the structure will integrate the functions within the organization. However, undertaking these changes is not a simple task which can be achieved within few days. Effort is required to maximize the outcomes and ensure that desired results are reached. This will ensure that the parties are able to achieve beneficial results in the long term and the outcomes will lead to suitable achievements in the future context.
The employees require to be consulted –
The current structure is well established; however, prior to changing the structure, it is advisable that the management develops the proposed framework and communicate same to the employees. Meanwhile, the ideas of the employees can be obtained to ensure that the desired results are reached.
Thus, possessing the appropriate structure in place will enable the parties to achieve beneficial, results in the future. This is an area of importance and the parties will be able to reach appropriate results and benefit from these outcomes.
The knowledge sharing channels require to be established –
Each department will need common channels which they can use to share the knowledge between the departments. This initiation requires to be established with a view to facilitating the knowledge sharing activities. The benefits will be maximized due to this approach and ensure that the desired outcomes are reached. For instance, the development of an appropriate knowledge library, internet etc. remains important. Therefore, possessing these tools will enable employees to gain the knowledge in their respective areas from various locations, and achieve the required results.
Domain experts will need to be established –
These are the parties who have expertise within the teams; they will have experience and exposure to the international markets and could assist the rest to perform efficiently. Thus, the establishment of such experts will motivate them to share their knowledge with the others. Likewise, the others will be motivated to reach their performance levels in the future. The establishment of the domain expertise will enable the teams to source knowledge and work efficiently in all areas they are engaged. This will improve the overall performance aspects and improve the eventual experience that the customers would receive.
Customer management policies –
Within each of the functional areas, steps will require to be taken to improve overall handling capabilities which will address the needs of different customers. However, the customer management guidelines will require to be developed in the center. This will enable the establishment of improved capabilities affiliated with overall customer management areas. Thus, appropriate policies will have to be developed to improve customer management capabilities between the parties in the future. Therefore, the policies developed centrally will indicate that the customers will be able to experience superior outcomes and achieve positive benefits in the future.
Customer management training –
It is vital that this aspect is properly unified. Therefore, it is mandatory that the parties manage this area with the intention of reaching appropriate outcomes in the future. Meanwhile, it is vital that the departments are provided with the required training to achieve the desired outcomes. Such training will provide beneficial results to all and the outcomes can be maximized in the context of the results achieved in the future.
Integrity requires to be increased within the culture –
The employee culture and the value systems need to be integrated. This is now made simplistic, since one single department oversee the tasks. The department will need to work consistent with the needs of each function and the parties will be able to achieve relevant outcomes. Thus, increased integrity within the culture remains important and the parties will require to achieve the needed outcomes consistent with the expectations in the future. Meanwhile, maintaining a high level of integrity with the tasks will enable the organizations to perform and reach the desired outcomes.
Thus, the above recommendations were developed with a view to maximizing the results within the operational structure. Instilling the relevant operational structure will lead the organizations to achieve beneficial results. It is vital therefore, that the parties adopt appropriate steps with the intention of maximizing the results and meeting performance targets. The employee satisfaction will be high since they are aware that they belong to a well-integrated global structure where several opportunities exist for growth within the given organization.
The above discussed outcomes associated with the study highlight that the results owing to change within ABCs is likely to be positive by nature. Since, the company has not reformed the structure from inception and the geographic structure imposes several restrictions and reduces the actual growth potential the company possesses.
The compartmentalization to geographic units makes it difficult for the company to perform and achieve the required results with a long-term view. Thus, the eventual outcomes highlight that the changes to the current structure will be the first step they will need to take towards reforming the organization.
However, mere changes to the structure will be insufficient; it is vital therefore, that they undertake further changes consistent with the needs of the organization which will match the structure based changes they have incorporated. Thus, ABCs will be able to reach the targets and benefit from these outcomes due to introducing appropriate changes to the structure and its operations. Meanwhile, the main objective of the paper is to evaluate the task integrity and develop an actual task based structure. Likewise, the organizational culture integrity also remains important in this area. All these aspects will lead to positive outcomes in the future context.
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