Case | HBS Case Collection | July 2006 (Revised December 2007)
Strategic Outsourcing at Bharti Airtel Limited
by Francisco de Asis Martinez-Jerez, V.G. Narayanan and Michele Jurgens
Faced with exponential growth and a competitive telecom environment, Bharti looks for ways to better manage its capital expenditures for telecommunications and information technology. One option is to hand over management of its telecom and IT networks to its vendors. Explores the pros and cons of such an outsourcing arrangement for a company in an industry where technological superiority is considered an essential element in competitive strategy.
Keywords: Innovation and Management; Job Cuts and Outsourcing; Competitive Advantage; Technology Networks; Telecommunications Industry; India;
Bhart Airtel Limited Case Study Analysis
1536 WordsNov 25th, 20107 Pages
The case study “Strategic Outsourcing at Bharti Airtel Limited” discusses the impact of quick growth on Bharti Airtel Limited, and its need to make a large decision regarding outsourcing within its IT department. Bharti Airtel Limited is the largest cellular service provider in India, with more than 141 million subscriptions currently. It also offers fixed line services and broadband services. It is also India’s largest integrated and first private telecom services provider, and a worldwide leader in mobile and fixed wireless services. But Bharti ran into a problem in 2003. Business was becoming so successful and growing so rapidly, that the company couldn’t keep up. The core competency of Bharti Airtel Limited was…show more content…
Because the company would be growing so fast over the next few years, they would need the help of other companies or they would risk being unable to keep up with the business. There were benefits to outsourcing for the vendors as well. Bharti was obviously growing more and more successful, so the vendors could possibly rake in a large amount of revenue by signing with them. This would also increase the vendors’ market share in India, a country that was virtually untouched by them before.
Aside from the potential benefits, there were also a number risks for Bharti Airtel if it turned to outsourcing. First off, the company had to ask whether it be more costly to keep internal practices or outsourcing practices? It was very risky to entrust so much of a company into the hands of another company. Some possible problems for Bharti included vendor bankruptcy or inability of the vendors to deliver, or even a contract breach from the vendors. It was wise of Bharti to do research before jumping into anything, and it learned which companies would be best suited for providing the needed services. Bharti chose Ericsson and Nokia Siemens, the top two mobile network equipment manufacturers for network management, and IBM for services dealing with the management of all of Bharti’s hardware, software, and application needs, as well as the expert knowledge it needed for its IT systems. IBM was known globally as the