Maintaining competitive advantage VIA-IT intensive business process outsourcing (BP0) in the banking industry in Thailand | |
| Author | Phetdavanh Phatsalouphon |
| Call Number | AIT RSPR no.SM-03-75 |
| Subject(s) | Contracting out--Thailand Information technology--Thailand |
| Note | A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration, Schoo of Management |
| Publisher | Asian Institute of Technology |
| Series Statement | Research studies project report ; no. SM-03-75 |
| Abstract | This study has focused on three issues: (1) reasons for outsourcing business processes, (2) cost and benefits for outsourcing business process, and (3) successful factors of outsourcing business processes or functions. It was designed to investigate (1) the impo1tance of IT for business operations of two banks and two IT vendors in Thailand, (2) the advantages/benefits that Banks can receive by outsourcing their business processes or functions, (3) cost and benefits between outsourcing business process and in-house practices in banking industly in Thailand, and (4) competitive advantage and opportunity created through BPO for banks in Thailand. All these objectives were satisfied. This research has been conducted by using both primary and secondary data. Interview questionnaire was used as a tool to gather primary data. Secondary data was collected from various sources such as published articles and research papers. More particularly, this study focused on only 2 banks (Thai Danu Bank and Thai Fa1mers Bank or Thai Kasikorn Bank) and 2 IT vendors (HP and IBM) that have practiced business process outsourcing in Thailand. The major findings of this research are summarized as follows: Two vendors were taken as sample of case studies to investigate the practices of BPO IT-intensive outsourcing. In vendor's point of view, two main benefits that the bank could achieve through outsourcing were focus on core business and cost saving and control. There were assets of both parties being used from three main areas: technology wise, facility wise and human resources. Three most common drawbacks for vendors were culture adaptation, customer expectation was too high, and the business manager from both sides can't negotiate and figure out the basis of the contract. Two different types of evaluation metrics were used to ensure the level of service: Service Level Agreement (SLA) and Customer Satisfaction Survey (CSS). Two banks that outsourced their IT functions or business processes were selected as case studies to survey the actual benefits, key success factors, critical failure factors, the vendor selection criteria, and drawbacks. Two main benefits found include enabling sharper focus on core competencies, catalyzing wider organizational change, achieve world-class standards and benchmarks, improve the quality of service, lower or transfer capital expenditures, and cost reduction and control. Both banks have emphasized on three aspects in selection criteria: functional, industly expertise, and reputation. The key drivers behind were to improve technology and expe1tise with outsourcing providers, and to improve quality of service from outsourcing providers. The study found top 3 key success factors: mutual trust between outsourcer and outsourcing provider, concise service level definitions and agreements, and improvement areas and measure continuously; top 3 critical failure factors: service level does not meet the demand, consider too much on short term solution, and focus on cost saving too much; and top 3 drawbacks: risk that the cost of outsourcing exceeds expectations, level of in-house knowledge and expe1tise erodes, lost valuable data to competitors. The executives of both vendors predicted that the BPO outsourcing market for finance company will increase in the next few years in outsourcing industly in Thailand. |
| Year | 2003 |
| Corresponding Series Added Entry | Asian Institute of Technology. Research studies project report ; no. SM-03-75 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Johri, Lalit M.; |
| Examination Committee(s) | Venkatesh, Sundar;Sununta Siengthai; |
| Scholarship Donor(s) | Asian Institute of Technology (Partial Scholarship);French Government; |
| Degree | Research report (M.Sc.) - Asian Institute of Technology, 2003 |