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Strategic Outsourcing at Bharti Airtel

Bharti Airtel faced challenges with rapidly scaling its network and managing capital expenditures as its customer base grew 100% annually in early 2004. It needed a lean and predictable cost model as network investments became outdated quickly. Bharti Airtel outsourced its IT requirements, which were divided into telecom, customer, and business support systems, to companies including IBM to achieve scalability. Bharti partnered with IBM for an end-to-end outsourcing agreement where payments were linked to revenues and service level agreements. This strategic outsourcing model helped Airtel reduce costs and adapt to evolving technology needs.

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Harshit Kumar Singh
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21 views2 pages

Strategic Outsourcing at Bharti Airtel

Bharti Airtel faced challenges with rapidly scaling its network and managing capital expenditures as its customer base grew 100% annually in early 2004. It needed a lean and predictable cost model as network investments became outdated quickly. Bharti Airtel outsourced its IT requirements, which were divided into telecom, customer, and business support systems, to companies including IBM to achieve scalability. Bharti partnered with IBM for an end-to-end outsourcing agreement where payments were linked to revenues and service level agreements. This strategic outsourcing model helped Airtel reduce costs and adapt to evolving technology needs.

Uploaded by

Harshit Kumar Singh
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Strategic Outsourcing at Bharti Airtel Limited

GROUP 2
Name Roll No
Surbhi Mehra 19BM63010
N Pradeep Kumar 19BM63034
JVV Sandeep 19BM63049
H Srinivas 19BM63055
Dasari Harish Kumar 19BM63057
Harshit Kumar Singh 19BM63058
B Santosh Kumar 19BM63071
Anuj Parmar 19BM63086
Shree Krishna 19BM63111
V Samuel David 19BM63113
Swati Pandey 19BM63124

During early 2004, when Bharti’s customer base was growing at 100% per year it faced a huge
challenge to keep pace with network expansion and budgeting for capital expenditures was a
nightmare. The investments made on the equipment are becoming irrelevant in few years as there
will be a new technology or equipment in the market and they felt that they need a lean and
predictable cost model.

Bharti Airtel had an IT requirement that could scale up to match the size of the organization it
projected to become in a few years as there was the problem of scalability in their system. Their IT
requirement is broadly divided into three categories; Telecom Network Systems and Software,
Customer Management Information Systems and Business-Support Software and Hardware
Architectures. To meet its IT requirement Bharti contracted with IBM, Sun Microsystems, HP, and
Oracle. Bharti chosen IBM as it will provide Bharti with complete and comprehensive end-to-end
management service for supplying, installing, and managing all of its hardware and software
requirements. The made an agreement with IBM that the payments will be linked to the percentage
of revenues generated by Bharti and pre-defined SLAs. Bharti and IBM pursued joint go-to-market
opportunities and avenues for selling value-based services in the areas of communications and IT
services.

Airtel realized that they need a robust cost model to capture huge market base in India. Airtel had to
restructure its ARPU based assessment to Manufacturer of Machines model owing to reduce the
increasing costs and adapt to the evolving technology needs. With this model, Airtel outsourced
network and IT requirements to IBM and turned out to be effective in achieving the objectives. The
partnership was strategic and a revenue sharing based model ensured that the contractors were
penalized for every call that was dropped. Implementation of this model required trust, faith &
collaboration and it proved to be highly successful and Airtel started to outsource HR functions,
customer churn management and behavioral analytics. Later it was extended to other geographies.

Through its sincere endeavors over the years, Airtel has made rapid progress in all three dimensions
of sustainability. Airtel launched "Hello Tunes", in July 2004 becoming the first operator in India to do
so and their Airtel theme song, composed by A.R. Rahman, was the most popular tune in that year.
On 9th October 2008, Airtel started DTH TV services across India under the brand name Airtel digital
TV.

In 2013, Bharti Airtel launched a voice-based solution portal for value added services that provides
information in local language on activities such as agriculture, devotion, job updates, entertainment,
education and health. 'Apna Chaupal', designed for rural and semi-urban market, enabled mobile
customers across the country.

In 2015, Airtel launched the ‘Sustainability Plan 2020’, which is the framework for its sustainable
business. The Company’s strategy maintains its emphasis on customers, community, partners, planet
and people, with focused and measurable goals that align with the Company’s business objectives.
Currently Airtel has the highest active subscribers in India.

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