Telstra Outsourcing Case Study

I) Introduction

With the development of economies and globalization, offshore outsourcing activities to overseas countries with huge benefits such as lowering costs, improving quality of product and service innovation are becoming strategic plans for the business operations of companies. Telstra Corporation Limited is known as the largest Telecommunications and Media Company in Australia offering telecommunication and entertainment products and services to help potential customers improve their lives and works through connection (Telstra website). Telstra had progressively implemented outsourcing processes related to Information Technology (IT) and Business Process (BP) services since 2003 with the aim of reducing cost and improving efficiency (Oshri et al 2013, p. 102).

This report will investigate the outer and inner factors, which influence Telstra and lead the company to focus on offshore outsourcing processes. Also, a brief analysis of the impacts of offshore activities on the company’s stakeholders as well as the reasons for keeping a number of activities onshore and the associated implications will be outlined in the

The economic fluctuations strongly influence on operation of the firms. The big gaps of wage inflation rates and exchange rates between developed countries like Australia and developing countries have significantly endured over time and they can be the financial attractiveness of outsourcing (Postma et al 2013). For instance, in last few years, after Global Financial Crisis occurred, the Australian currency strongly appreciated (Manalo et al 2014); other currencies from developing countries depreciated, such as Indian Rupee depreciated 50% in 2011 (Postma et al 2013). So this was a big advantage for Telstra to make payments for operational and labor costs in foreign countries when implementing offshore outsourcing