Introduction
The Emirates Airways is the leading airline company in the entire Middle East region. This firm was started on October 25, 1985 by the government of United Arab Emirates. The government was keen on transforming this country into a business hub, and a tourist’s destination. The government had improved the infrastructure of the country and the city of Dubai was first turning into a global business hub.
The government was therefore concerned that there was no national airline that would travel from this city directly to other parts of the world (Sandhusen, 2008). The leadership of this country decided to start this company to take care of the national interests. The government therefore, funded this firm and offered it an enabling environment to prosper in this industry.
The Emirates Airways has made a lot of effort to ensure that it meets the expectation of the government and that of the customers. With the increasing market competition, the management of this firm realized that the only way it could prosper in this market would be through coming up with ways through which it could emerge as the preferred firm.
The management therefore, developed various strategies that would meet the expectations of customers. In its quest to attract customers, the firm became the first airline to install entertainment facilities in all its planes in the entire Middle East region (Liew, 2009). Most of these technical activities were initially outsourced.
However, the firm changed this strategy to in-sourcing after the realization that it had the capacity to build its own workforce. This has seen the firm become the leading airline in this region, and the fourth in the entire world.
Specific Business Unit and Component to be outsourced
In every project, there must be a clear schedule that should be followed to ensure that it achieves its objectives. Emirates Airline was concerned of the state of the IT within the firm. Some of the delays were experienced in the process of booking, and there was need to improve the system in order to enhance efficiency of the firm.
The management therefore, developed a project that would ensure that it improves its internal communication and the inter-departmental connectivity within the firm (Lamb, 2012). This was the reason why the management decided to outsource external labor to work on this project as it was apparent that the available labor force lacked the capacity to perform this activity.
However, the firm acted prudently by making their employees work alongside the hired technicians. The firm soon developed a workforce with the capacity to handle this activity. This allowed it to revert to in-sourcing of the activities internally. The Gantt chart below specifies the activities that were carried out in this project
Gantt chart
The above Gantt chart demonstrates all the activities that were accomplished within a specified duration. The firm started out by outsourcing the services, and when its workforce had developed understanding of the facts, the firm then tasked its employees with the duty to improve the project.
An Overview of the Business and Business Model
Emirates Airways is currently the leading airline in the Middle East. The firm has its headquarters in Dubai, at Dubai International Airport. This firm operates in to four largest destinations across the world. The firm operates in more than 100 destinations in 74 countries. The company has managed to overcome stiff competition that is in the current market.
According to Charantimath (2007), the airline industry is very competitive. This scholar notes that this competition has been rising in the past decade with the entry of new airlines into the industry. It becomes a big challenge for a firm to operate in such a competitive market if it lacks proper competitive strategies. This scholar notes that the aviation industry has been consistently on the rise in the past one decade.
The emerging technologies have brought in a lot of changes in this industry, and firms are forced to adjust their operations in order to meet the market demands. The emerging trends in the aviation industry cannot be ignored. It would force a firm to embrace these changes in order to realize the benefits that this industry has to offer. This is what the management of Emirate Airline has been keen on.
This firm has received enough financial support from the government to enable it manage the emerging trends in the aviation sector. Some of the technological inventions always demand that the firm gets experts to handle various aspects of technology. It sometimes forces the firm to look for this expertise outside the firm. Effective marketing has seen this firm become the largest airline in this region.
According to Bissoondoyal (2006), marketing has changed from what it used to be in the past. Marketing was considered as part of production about 50 years ago. By then, competition was low, and the main concern was to increase production of the firm. The market was readily available in the global world. However, this has systematically changed over the years.
Firms have come to realize that customers have various options to choose from when they want to make a purchase. Given such independence of the customers, firms have come to realize that they have to come up with strategies that would enable them attract customers. This has resulted in a scenario where every firm is struggling to come up with appealing strategies through which they can capture the attention of the customers.
This competition is very stiff in the aviation industry. Such leading airlines like the British Airways, the Virgin Atlantic, Air France among others; the Emirates Airways is forced to come up with a strategy that would enable it capture the market in the best way possible. IT plays a central role in enhancing success of the firm in the market.
Service Components Outsourced
As stated above, the aviation sector is very competitive. Firms have come to embrace technology as a way of managing this competition. The top management of Emirates Airline was concerned of the time that it takes to process details of customers while booking a flight with the firm. Other major airlines like the British Airways and even Qatar Airways had developed mechanisms that allowed them to reach out for the customers easily.
They had improved their system in a way that their customers could easily book for the plane through online means. These IT leaders of this firm appreciated the fact that its workforce had no capacity to develop a system that will enhance communication between the firm and the customers, and even within itself (Hartman, 2002). The system that was in existence was weak and could not be relied upon to deliver the expected results.
The management of this firm therefore had to outsource external skills in order to improve the IT department of the firm. The management of this firm hired expects to help improve the system to enhance booking of the plane online. The system was developed to allow all the booking offices to have instant communication amongst themselves and with the customers. The management decided to improve the internal workforce in the process of developing this system.
The Rationale for Outsourcing
Outsourcing is one of the new trends in the current world. Initially, a firm would be involved in all the activities within the firm. The management would determine all the activities that should be undertaken within the firm. The management would then assign the activities to various departments within the firm to accomplish. This was working well in those olden days, especially after the Second World War.
Firms did not have to struggle looking for the market. The global market was very large, but firms that were doing mass production for various products were very few. There was therefore no serious competition in the market (Handlechner, 2008). The main focus of most firms was to increase their production capacity because of the readily available market.
However, this was changing as the world was getting globalized. Various firms were coming into existence from various corners around the world. With the emerging technologies, the world was fast turning into a global village. Many countries also considered opening up their markets for foreign firms. This brought about serious competition as firms had to convince the market that their products are the best.
Outsourcing was first witnessed in the aviation industry. This industry still remains the leading outsourcing industry in the world. The airlines in many countries across the world realized that most of their employees did not have the capacity to offer quality service to the planes for maintenance purposes. These airline firms struggled to look for employees with the capacity to take care of the maintenance of the planes.
The process of looking for such experienced individuals was not only costly, but also very tiresome. It would take a lot f time getting an individual with enough knowledge in this area, and retaining them within the firm was another problem. This condition was worsened by the fact that such tasks would require a number of individuals to work as a team. The following are some of the justifications of outsourcing by Emirates Airline.
Increasing of the Operations Efficiency
Outsourcing is one of the best ways of increasing operations efficiency. It is common to have cases where a firm lacks proper expertise to undertake certain activities. This is very common when dealing with the emerging technologies. It may take a very long time for a firm to train its employees on certain activities within the industry (Gerber, 2008).
Outsourcing therefore comes out strongly as the best strategy that allows the firm to operate with the highest efficiency level even if it lacks expertise in some fields. Employees who have knowledge and experience will be retained in their departments to increase their efficiency. Those tasks that the firm lacks proper expertise will be assigned to other firms with enough capacity to deliver good results. This way, the operations of the firm will be very efficient.
Increasing Time to Focus in Other Core Activities
According to Ferrell (2011), it is always a strenuous and time consuming process trying to undertake a task that one has limited knowledge in. Such an individual will be performing two tasks at a time. The first task will be learning how to perform the task, while purporting to perform the task.
This takes a lot of time that would have been used to undertake other activities. When such activities are outsourced, it allows the firm more time to focus on activities that it can perform best. This way, the management, and the employees will be left with ample time to focus on other core activities of the firm.
Improving Management of Information
Information is one of the key components of a firm that always dictates success or failure in the market. A firm that is able to develop an information flow has the capacity to succeed, unlike another with disrupted information strategy. Information management is always very important.
Outsourcing enhances information flow. When a firm outsources another firm, it would mean that the firm will have a reduced number of employees. Coordinating the reduced number of employees is much easier. The management will use the leadership of the outsourced firm to ensure that its employees work within its expectations.
Reduced Cost of Operations
Firms are currently fighting to reduce costs of operations. Customers are demanding more for a lesser cost. The suppliers are demanding more money for lesser suppliers they deliver, citing increased cost of operations. Emirates Airline is pressed between these two forces.
It has to find a way of meeting the needs of the two forces. Outsourcing offers firms this opportunity. When a firm outsources another to perform certain tasks, this would mean that the firm will not need to hire individuals in these departments. This reduces the cost of labor for the firm.
Reduced Risks
The process of outsourcing reduces the risks of errors in performing certain activities. This is very common in the aviation industry. When these tasks are assigned to experienced individuals, chances that the activity will be done in a faulty way are minimized. This reduces risks that would be met if the activities were done by inexperienced employees within the firm.
Quick Implementation of New Technologies
The emerging technologies are very important in the modern world. It is important that the management of Emirates Airline ensures that it has the capacity to manage the emerging technologies. Outsourcing other firms in various departments within the organization helps in quickening the implementation of new technologies.
To implement new technologies as quick as may be desired, there is always need to ensure that there are individuals who have an understanding of such technologies (Evans, 2012). The management f this firm will only need to go for a firm with experience and knowledge of the new technologies. Outsourcing their services will enable the outsourcing firm to implement new technologies at a faster rate.
Compliance to Security
In most of the industries, there are some rules and regulations set by relevant authorities to protect the public. In the aviation sector, there are safety and security rules set up by various aviation bodies. The same case applies to various other departments.
Some sensitive industries like the aviation industry would require individuals with a deep understanding of the requirements put forth by the regulators. When a firm outsources such sensitive tasks to other firms, it makes it easy for the firm to comply with the security and safety rules. This would eliminate any possible cases of litigation.
Staffing Flexibility
One of the biggest tasks that human resource department and the IT unit have to handle is the flexibility of the staff. The staff of any given organization must be flexible. It must be able to approach the emerging trends in the market and be able to come out successful. However, this is not very easy because of specialization that comes with division of labor.
When an individual is assigned a specific task, it would be difficult to make them perform other activities that are different from their current tasks. However, there must be flexibility of the workforce to enable the firm withstand the emerging trends. Outsourcing is the best way to enhance staff flexibility.
A firm will only need to hire individuals with understanding of the emerging trends as and when needed. Employees will be given time to develop understanding of these new trends and master them, before they can start performing such tasks.
Development of the Internal Staff
It is import to develop the internal workforce. Development of the staff can come in various approaches. One of the most common ways of developing the workforce is through in-service learning. In this strategy, employees’ capacity is improved while they are at work. Outsourcing is very vital in this strategy. The management will outsource a firm with the desired skills in a particular sector.
The management will then select the workforce that should learn the desired strategy and assign them to work alongside the outsourced firms. The employees would be expected to learn how to handle certain tasks by getting involved in doing them (Ferrell, 2011). The outsourced firm will not only be helping the firm in performing that particular activity, but also in teaching and developing the local staff.
The firm will therefore develop a strong workforce that has the capacity to handle various activities within the firm. The above are factors that made the firm consider outsourcing the services of external workforce in improving the communication system of the firm.
The Decision Makers in Outsourcing
The decision of outsourcing some activities within the firm is always an involving activity. It is always important that various senior management officials get to agree on some of the factors to be considered when outsourcing. When Emirates Airline made the decision of outsourcing the services of external workforce in the IT department, the recommendation came from the head of the IT department.
Following complains that were received by customer care unit from the customers over the inefficiency of the firm, the management instructed this department to adjust the system to reflect on the emerging trends in the market. The IT department admitted that it lacked the capacity to improve the system to the levels that were expected. The department recommended hiring firms that had the capacity to improve the system to the world’s standards.
The IT management team played a major role in bridging the communication gaps between top executive. The executives had to be convinced that the firm lacked the capacity to undertake these duties by itself. The IT head therefore, had a huge responsibility of ensuring that all the officials who were responsible for giving a node to the project were convinced beyond any reasonable doubt that the best way was to outsource these services.
The Decision to In-source the Activities and Role of IT leaders in improving communication and rapport
The management of Emirates Airline was keen on ensuring that the contract for the activities lasted for about three months. The above Gantt chart clearly demonstrates this. The reason why the management was forced to outsource for these activities was due to lack of a proper expertise internally. One of the terms of the contract was that internal workforce would be working alongside the outsource workers.
It was therefore a decision of the top management that after some time, the internal workforce would assume the activities that were carried out by the outsourced labor. The internal workforce therefore, took the responsibility of maintaining the system on the run, and making improvements whenever this was necessary. The IT department has fully resumed all the activities that involve communication and coordinating information within the firm and also with customers.
Booking is now mostly done online, and customers have registered satisfaction with the services they receive from the firm. The process of moving from outsourced services to in-sourced services did not raise a lot of concern. This was because the IT department had stated initially that they only needed support from the external firm on how to adjust the system to reflect on the emerging trend.
It was agreed that the outsourced firm would only take about two and a half month, after which their contract with the airline would expire. It was therefore, not a big challenge for the IT leaders to inform other members of the department that they had decided to use the internal workforce to carry on with the activities that remained.
The Current Status of the Firm
Emirates Airline current status can be analyzed from various fronts. The move by the firm to outsource the IT services only to change the decision later on has had a number of benefits to the firm. The current status of the firm can be analyzed from a number of fronts. The following is an analysis of the current status of the firm from a number of fronts.
The Current Marketing Strategies of Emirates Airline
The move by the firm to outsource the IT services has had a massive impact on the firm’s marketing strategies. The team formulated a strategy that involved technological advancement in various departments. The firm then moved to the implementation strategy before coming up with evaluation and control procedures.
Emirates Airlines is one of the current success stories in a group of companies that have managed to be successful in the face of increasingly competitive environment. This is attributed to its strategies that have helped it manage the competition in the aviation industry. The world is getting transformed with the emerging technologies. One of the defining technologies that are transforming the world into a global village is the communication technology.
The phones and the internet have made communication very easy. The firm has made it possible for the customers to make bookings through internet irrespective of their location. This has seen this firm expand its operations to regions beyond this country. As such, this has seen this firm expand its customer base and the number of routes it takes.
The strategies are very important because in such a market, any misstep by a firm may lead to automatic fall of the firm and therefore, every step must be calculated very keenly. According to Hartman (2002), the current world market is very competitive. This scholar notes that this competition is not only created by the fact that there are several firms producing the same product, but also the fact that customers are informed.
The current customers are very knowledgeable and know exactly what they want. They have the knowledge of where to get that which they need and at what price. They know the alternatives that are available and this makes them more demanding. As such, turning these individuals into loyal customers of a firm is not easy. It forces a firm to develop a strategy that would enable it remain relevant in the market
The Current International Marketing Campaigns used by Emirates Airlines around the World
In the current market, customers are very demanding. This firm is constantly under pressure to perform exceedingly well in order to manage the competition in the market. It faces a lot of pressure from the suppliers. The jet fuel is constantly on the rise. The airline firm has to otherwise but to pay the increased price of fuel. The cost of maintenance is also high.
This increases the cost of delivering products to the customer. The firm also needs to improve on the quality of the products in order to ensure that they outmuscle other competitors. When the product is delivered to the customers, the customer will demand reduced prices simply because they have other alternatives. This would force the firm to find a way of generating profits in such a harsh environment.
The outsourced services helped a great deal in overcoming this challenge. The Emirates Airways has come to realize that it has to develop means through which it can develop promotional campaigns for its products in the global market. The Emirates Airways has developed a brand in the local market, and the entire region of Middle East.
The region appreciates the fact that this company offers the best travel services in the region. However, there is a very strong competition from another regional airline, the Qatar Airways, which is posing threat to this firm. It forces the firm to come up with strategies which can enable it attract the customers in the region. Regionally, this firm has positioned itself as a company that takes care of comfort, safety and security of the passengers.
One of the leading concerns of most passengers is the comfort of the plane. This is because the distance is always very long. This would require some comfort for the passengers in order to reduce fatigue. The passengers are also concerned with their security once on air. This is because of the rising insecurity in most cities. Terrorist attack on the airplanes has become very common in the current globalized world.
Passengers want reassurance that they will be safe when they embark on such journeys. This market proposition has seen it win trust of the local market. This firm has also made concerted effort to attract travelers of other nations. In order to reach out for the customers, this firm has tried to use both the social media and mass media to communicate their message to the customers.
The firm made the decision to use social media marketing after the management decided to outsource the IT services. Locally, the firm has actively engaged in promotional campaigns in the mass media. It has developed television commercials that help it reach the local market. The social media has been very vital in reaching out for the international community.
The YouTube has helped this firm in airing its television commercials to the international community. The Facebook and Tweeter have also been very vital in communicating to the customers in the international market. When the firm decided to stop outsourcing the services, the internal workforce has been able to manage this strategy.
The Impact of the Decision Stop Outsourcing IT Services
When the management decided to stop outsourcing the IT services, it was a little challenging for the employees of Emirates Airline to run the system on their own. They did not find it easy to take full control of the new system especially because of technicalities involved. The top management did not have issues with this change of approach because they were informed before the project was started.
The head of IT department had a little challenge filling the gap which was left by the technical team that was hired to improve the system. The head of this unit had to convince the employees in this department that they had the capacity to handle this project on their own. The employees in this department also had a big challenge trying to adjust to this new system.
It was difficult for the employees to take control of a system where most of the bookings and paying the fare was done online. The top management also exerted a lot of pressure on this department to come up with advanced strategies that would ensure that passengers are entertained while they are on air.
The Financial Status of the Firm
The decision by the firm to improve its IT system by outsourcing the services from external experts has had direct positive financial impact on the firm. There have been an increased number of bookings per day. This can be attributed to the fact that customers can now make bookings online. Online booking has made it possible for customers to book for flight irrespective of their locations. The IT department has also improved entertainment services for the customers, further attracting them to the firm.
References
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