- Executive Summary
The main perspective of this assignment is to analyze the strategic alliance and its advantage for the company, with the name of Oslo Financial Services that is one of the world’s largest insurance founded specifically in the year 1958 by Stake Blackstrom and his campaign, Kevin Sandbech. The company, offers services in terms of insurance, life insurance, casualty insurance and property insurance The Company had grown tremendously well from last few decades due to its vast and active operations and its propensity to be in the strategic alliance with all of the big organizations of the world. The company has more than 90,000 employees in the world and has a perfect and well reputation in the financial market industry. The market share of the company is also high, and it has a remarkable sight towards the Information technology. There are different questions that needed to be answered in this particular analysis, hence step by step (SBS) approach would have been taken into account for the same analysis to complete this paper.
Merger and acquisition always be effective for the organization in particular as it is one of the provisions that deem essential for an organization from different standpoints . There are numerous organizations in the world that are having a tough time in managing its operations and winning of contracts and effective decisions should have been taken by the entities in order to retain in the business for a long span of time.
According to the crux of the case, Oslo Financial Services are intends to initiate a strategic alliance with a company, with the name of Georgia and the contract with HAL has been nullified. The main reason behind this action was the stance of cost efficiency for Oslo Financial Services. Sales Vice President, David Jordon and Philipison has the personal relationship with the owners of Georgia who will look over all the Information technology (IT) based infrastructure of the company accordingly. According to the case, Philpison has engaged the project under the name of Georgia and the entire cost currently to Oslo amount to US$ 600 million per annum. The main reason behind this step was the unethical and ineffective behavior from the current IT head of the company and CEO Michael Headbanger and Head of Risk department, Miranda Rackham had showed their insecurity towards the working of IT and its utilization in the business. The Information technology (IT) total budget of Oslo Financial Services is US$ 2 billion per annum, consisting about 5% of the total cost of the company, but still not showing any efficiency over the operations of the company.
If the project would have been outsourced to Georgia, then it will bring positive income changes for Oslo Financial Services, as the outsourcing required only $ 600 million per annum to cover all of the IT based issues of the company instead of $ 2 billion that the company is currently incurring. Operating in this way, the company may save around $ 1,400 million that can be used in other projects. There are some personal transition and emotional arguments associated with the company as with the current IT employees of the company, but they would be used in any other department, if required.
Pitfalls, cons and disadvantages always associated with business, and it is some of those things from that a management or an organization cannot denied. As a service provider, we have certain pitfalls that may hamper our operations while conducting this project, as burdensome of work may derail us from emphasizing on a certain client or any lacking from the current workforce of the company. Apart from that improper budgeting of the contract money is also an issue that needed to be the cover while conducting this project of Oslo Financial Services.
- Risks for Oslo Financial Services
It is true that outsourcing has brought lots of effectiveness and ease for the companies and businesses in terms of handling their corporate issues and other disclosures; however, there are certain risks always are there with the original party. Oslo Financial Services will grant the project to Georgia but there are certain risks that always are associated with the management of the company
- Low accentuation on their Core Business Operations
- Having Lesser Idea regarding the current business model of the company
- Risk of losing their clients
- Risk of continuously intimating about their ever changing business environment
We think that we are in the top most list of Georgia merely because of our current financial structure and competitiveness. Oslo Financial Services will be going to give the high amount of funds to the new service provider, that is not being provided by any other business; therefore we required exceptional services from them in return too.
After defining a proposal, defining its effectiveness, pitfalls and specification of the project, we all have done with the essential steps that needed to be furnishing before the acceptance of a proposal physically. After submitting the proposal, the next step on that we will work on it is how the project would be delivered in the next step. Oslo Financial Services have made the project, analyze the cost bearing on it, computing its pitfalls and spillovers and now ready to move on the roller coaster ride. Apart from this step, we will make a presentation as well for the upper management mentioning the key points and success factors of this particular project for the sake of the company in the future.
The Upper Management,
Oslo Financial Services
We are certain that Oslo Financial Services have been growing with a robust pace from last few decades, and we are also certain that Information technology is one of the integral things from the standpoint of the company, however, the CEO, Michael Headbanger, Miranda Rackham and CIO Philiison are not at all happy with the performance of the department, as they think that the budgeted amount allocated on IT is too much than its actual capacity, and they are not having the benefits that they think. In order to save the cost of the company as much as $ 1400 million per annum, the company is now outsourcing its IT based activities to a third party Georgia, who have exceptional command over managing the operations and infrastructure of many company’s IT departments. Hektor Gulrandson and other management officials will be in direct touch with the new company and obliged. Your understanding and co-operation in this said regards would be highly appreciated
Corbett, Michael F. The Outsourcing Revolution: Why It Makes Sense. Chicago: McGraw Hill, 2004.