Operations Decision for Continuing Outsourcing

AbstractThe primary goal of this report is to take an in depth look at daily operations, involving Affiliated Computer Systems. To determine if current production levels, staffing, wages and quality controls are valid as a rationale to continue the contract. (ACS) is a third party company that provides outsourcing or contracting of an existing business process for CVS Caremark. CVS Caremark is the organization previously performing the task of customer service internally.

CVS Caremark outsourced the process of the customer service representative to ACS. Methodology

Data for this report was collected via a confidential survey by Taleo Resources. Due to the perceived sensitivity of this topic area, and to encourage a high level of participation, the survey was completed anonymously. A random sample of 20 middle and lower level managers was selected from ACS and CVS Caremark utilizing the current company directory. The managers were selected from multiple departments, including human resources, Right Source, Humana, Sprint and IT. The questionnaire was developed specifically for this report.

A total of 100 employees responded to the questionnaire and the final response rate was 45 percent. This was well above the target response rate of 30 percent. Very basic demographic information, such as employee level, tenure and department were collected to gauge how representative the respondents were of the sampled population. The demographic profile of respondents was comparable to the population sampled. A total of 88 respondents (85 percent) completed the survey in English, 25 (10 percent) in Spanish.

Directors accounted for 4 percent of respondents, 15 percent were team leads and the remaining 10 percent were Acting Supervisors. We will utilize the basics of economics in determining the viability of the maintaining the contract with Affiliated Computer Services. We will introduce modeling Rationality, Opportunity Cost and Thinking at the Margin; in conjunction with, supply and demand, production possibilities, and quantity and demand to make our final decision Financial Performance

ResultsEnvironmental monitoring, forecasting and environmental assessment complete the global environmental analysis. Companies like Xerox in Greely, Colorado and Post in Raleigh, NC are formidable challenges to maintaining the current contract with Affiliated Computer Services. These companies offer a strategic contrast in cost to Affiliated Computer Services. These companies compromise the relationship between ACS and CVS Caremark. Consequently these industries, markets, clients and competitors will make it difficult to maintain the contract currently in place.

The economic, social and technological events and trends which influence business decision, the factors which need to be considered for environmental scanning are events, trends, issues and expectations of the different interest groups. Issues are often forerunners of trend breaks. I have listed the significant variables below utilized in determining the fate of the contract with CVS Caremark. The significant variables, in order of importance, were:

(1) The solution took into account our internal state of readiness; (2) The project included prototyping new solutions;(3) The project deliverables were clear(4) The quality expectations were attainable and measureable throughout; (5) The staff was professional and trained(6) The company had staff buy in with respect to goals and expectations. (7) The number of HIPPA violations had to be decreased immediately (8) High absenteeism and attrition

After close examination and of all data and materials collected. The recommendation of this report is to maintain the current contract in place with CVS Caremark.

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