Global Petrochemical Co BPO Strategy
BACKGROUND & OBJECTIVE
A leading global petrochemical manufacturer and distributor, with an annual revenue of $4 billion, faced a significant cost increase from their current outsourced service provider. To mitigate this financial impact and optimize their service delivery, the company sought to develop a comprehensive outsourcing strategy and procurement framework. The objective was to identify cost-effective outsourcing solutions, streamline business support services, and establish a shared service outsourcing model that would enhance operational efficiency. The project aimed to provide a structured approach to vendor selection, procurement, and long-term cost optimization while ensuring minimal disruption to ongoing business operations.
PROJECT APPROACH
The engagement began with an in-depth assessment of the client’s business challenges, internal processes, and existing outsourcing arrangements. A detailed business support strategy was developed, outlining key areas for process improvements and cost-saving opportunities. A structured shared service outsourcing model was designed to centralize service delivery functions while maintaining flexibility and scalability. The project team provided critical tools and frameworks, including Request for Proposal (RfP) development and bidding process management, to ensure a seamless transition to a more cost-effective outsourcing arrangement. A strong emphasis was placed on accelerating improvements without compromising service quality or business continuity.
OUR METHODOLOGY
To achieve the project objectives, a combination of strategic frameworks and analytical tools was deployed. The Make vs. Buy framework was used to assess the feasibility of in-house service management versus outsourcing. Service outsourcing tools facilitated benchmarking of best practices and cost structures. A comprehensive RfP process was designed to attract competitive bids from potential service providers, ensuring transparency and alignment with business objectives. A vendor short-listing approach was implemented to evaluate service providers based on key performance metrics, cost efficiency, and service capabilities. The bidding and service evaluation methodology allowed for objective comparison and selection of the most suitable outsourcing partner. This structured methodology ensured an optimal balance between cost savings, service quality, and operational effectiveness.
THE RESULTS
The project delivered substantial financial and operational benefits to the client. A new service provider was selected, and a letter of intent was signed within six months from project initiation, ensuring a swift transition without service disruptions. The newly negotiated service agreement resulted in a total cost savings of more than 50%, significantly reducing the financial burden of outsourcing. Over a five-year contract duration, the impacted cost base amounted to approximately $100 million USD, demonstrating the long-term economic advantage of the new outsourcing strategy. The project successfully positioned the company for sustainable cost management while maintaining high service quality and efficiency.
