A business choosing to outsource certain parts of their operations has become a global trend. As a result, This Day Live recently composed an article to explore the possible benefits to a business’ operations by choosing to outsource certain aspects of the company. At the basic level, outsourcing is the release of a company’s major operations to another company for proper management of resources. The process is mostly an effective management strategy that enhances high returns on investments through cost cutting. The article used the telecoms sector in Nigeria to provide examples of how cost effective choosing the path of outsourcing can be for a business.
Specifically, in telecoms, outsourcing is the release of some managed operations of a company to another company with professional expertise, with a view to managing the operations on behalf of the original owner. This process allows company’s that aren’t focused on telecoms to reduce operational costs and to return focus to their core business operations. The idea originated with a business move made by Airtel. The company chose to outsource its call center operations to Tech Mahindra, through the Business Process Outsourcing agreement, otherwise known as BPO. Airtel’s outsourcing came with many benefits, including monetary gains; in addition to this, the system has also helped Airtel to focus more on its core business of providing voice and data services to its over twenty five million active subscribers.
Seeing the benefits reaped by Airtel, many other Nigerian companies have decided to follow suite with the process of outsourcing. The article particularly addresses MTN’s outsourcing procedures. The company started by outsourcing its core center operations in Lagos and Jos to Communications Network Support Services Limited, otherwise known as CNSSL; this was achieved through the BPO agreement. However, now MTN is planning to outsource other aspects of its business. The company has reached an agreement in principle with HIS Holding Limited for the transfer and management of its towers. The transaction will transfer the nine thousand one hundred and fifty one towers to the command of a new company, which will be owned jointly by MTN and IHS. However, under the terms of the agreement, IHS will have full operational control of the underlying tower business. In addition, there are other aspects of the deal that will work to increase quality of service and enhance the customer experience on the MTN Nigeria network. The new towers company has committed more than five hundred million dollars of additional investment over four years into tower upgrades and a maintenance program. The transaction is expected to reduce MTN’s operating costs, drive network efficiencies and further expand MTN’s voice and data capacities.