Bharti Case Study

3. If you were Bharti, what major concerns would you have about entering an outsourcing agreement with IBM? With Ericsson, Nokia or Siemens? (Shirley)

Bharti proposed to outsourced all of the core functions to global vendors and only focusing on sales, marketing and finances in-house. Overall concerned of partnering with vendors included contract risk, excessive dependence, reduced control and cultural differences.
In the proposal, Bharti will sign a contract with both the telecom equipment vendors ( Ericsson, Nokia, and/or Siemens) and IT equipment vendor (IBM). The contract will result in a three year and five-year partnership, respectively. There are two issues concerning the contracts, first, what happens if the vendor 's performances

Bharti will not be able to completely control the core competencies if other vendors take on core functions of the business. Reducing our control will also lead to threat in security and confidentially of Bharti. We will also lose our hardware and software application since our potential vendors do not support them. Reducing the control is time-consuming, it will be harder and longer for our sales and marketing team to incorporate the new R&D to target market effectively since these specs will come from outside

These concerns can be turned into advantage and protection for all parties.
On the agreement, it is best to clearly outline all contract terms and negotiables with vendors. As the contract term is a concern for both ourselves and our potential vendors, there should be a section for possible reasons for termination that is applicable to all parties. In addition, as a protection for both parties, a decision regarding renew or end the contract after the completion of the terms is to be made 6 months prior to the end of the current contract. These will be beneficial for all parties to make an adjustment if the partnership didn’t work out.
Since the majority of Bharti success depends on other vendors innovation and services. Bharti can reward these vendors and their employees for accomplishment on quality control and customer satisfaction ranging from cash bonus, certificates, discount on Bharti and etc. Bharti should also show appreciation and gratitude to the success of these vendors, by inviting top performers to an annual appreciation dinner. Having perks increase the individual drive to perform well and rapidly complete tasks. If Bharti wants to make the other vendors succeed, Bharti needs to make sure those employees are satisfied and