Alcatel Czech

In 2004 the EEIP team assisted the company Alcatel Czech, s.r.o. with the project of network (field) operations outsourcing of the company Ceský Telecom, a.s. This project was started by a new management team in Ceský Telecom with clear vision to improve efficiency, locate redundancies and focus on core capabilities with ultimate goal to improve the financial position of the company. The mandate of EEIP consisted of several tasks: performance of detailed due diligence, partial personal audit, compilation of business models for new organization, and pricing and cost allocation for each service offered to the outsourcer.

The mandate of EEIP, a.s. for Alcatel Czech, s.r.o. consisted of several tasks:

• Performance of detailed financial, legal, contractual and partially physical due diligence. This process allowed to experts of EEIP, a.s. to become familiar with Český Telecom’ operations, especially with respect to condition of its network, technologies in use and its key technology vendors.
• Partial personal audit involved description of elementary works performed by Český Telecom’s employees, the management structure and governance methods. Using the international benchmark with typical labor productivity in the industry wide discrepancies between actual headcount and necessary staff have been identified.
• Compilation of business models for new organization, definition of interfaces between outsourcer and outsourcee, and identification of potential efficiency measures with respect to service networks in the country.
• Pricing and cost allocation for each service offered to the outsourcee. Definition of each individual service, utilization of industry benchmark for costing, where improvement may be expected.
• The client Alcatel Czech, s.r.o. went through the several phases of short listing from more than eight bidders down to five and then down to the last two bidders. Despite the proven expertise and excellent capabilities of the client, the management of Český Telecom, a.s. finally decided to choose as its outsourcing supplier the company Siemens in January 2005.

More about outsourcing

The outsourcing is a specific process that enables a company to separate subordinate activities from its internal structure and to transfer it to an external subject specialized in the particular business activity or operation (subcontractor). The outsourcing allows the company to focus on its core business activities and to increase its competitiveness. Information technologies (IT), logistics, public relations, economic and legal services, and facility management are the most frequently outsourced activities. The specialized outsourcing companies usually offer more expertise in the given area and dispose with a qualified workforce. Therefore, the outsourcing of some specific activities at the external firm specializing in the given area usually generates significant cost savings for the parent company.