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    Merchants Bank MB Is A Large Regional Bank Operating in

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    Amit Pandey
    MB is a large regional bank that currently outsources its call center operations to Naftel in India. The 5-year contract with Naftel is coming up for renewal. MB is considering whether to renew with Naftel, change providers, or move the call center back to Atlanta. Key factors in the decision include the strengthening US dollar, uncertain economic outlook, available jobs and office space in Atlanta, and cost comparisons between keeping operations outsourced versus insourcing back to Atlanta. Globalization and ethical issues should also be considered.

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    Merchants Bank MB Is A Large Regional Bank Operating in

    Uploaded by

    Amit Pandey
    41 views2 pages
    MB is a large regional bank that currently outsources its call center operations to Naftel in India. The 5-year contract with Naftel is coming up for renewal. MB is considering whether to renew with Naftel, change providers, or move the call center back to Atlanta. Key factors in the decision include the strengthening US dollar, uncertain economic outlook, available jobs and office space in Atlanta, and cost comparisons between keeping operations outsourced versus insourcing back to Atlanta. Globalization and ethical issues should also be considered.

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    Merchants Bank Mb is a Large Regional Bank Operating In

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    MB is a large regional bank that currently outsources its call center operations to Naftel in India. The 5-year contract with Naftel is coming up for renewal. MB is considering whether to renew with Naftel, change providers, or move the call center back to Atlanta. Key factors in the decision include the strengthening US dollar, uncertain economic outlook, available jobs and office space in Atlanta, and cost comparisons between keeping operations outsourced versus insourcing back to Atlanta. Globalization and ethical issues should also be considered.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    41 views2 pages

    Merchants Bank MB Is A Large Regional Bank Operating in

    Uploaded by

    Amit Pandey
    MB is a large regional bank that currently outsources its call center operations to Naftel in India. The 5-year contract with Naftel is coming up for renewal. MB is considering whether to renew with Naftel, change providers, or move the call center back to Atlanta. Key factors in the decision include the strengthening US dollar, uncertain economic outlook, available jobs and office space in Atlanta, and cost comparisons between keeping operations outsourced versus insourcing back to Atlanta. Globalization and ethical issues should also be considered.

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    © All Rights Reserved
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    Solved: Merchants Bank MB is a large regional bank

    operating in

    Merchants' Bank (MB) is a large regional bank operating in 634 locations in the Southeast U.S.
    MB has grown steadily over the last 20 years, because of the region's growth and the banks
    prudent and conservative business practices. The bank has been able to acquire less
    successful competitors in recent years, further enhancing its growth. Until 2005, the bank
    operated a call center for customer inquiries out of a single location in Atlanta, GA. MB
    understood the importance of the call center for overall customer satisfaction and made sure
    that the center was managed effectively. However, in early 2004, it became clear that the cost
    of running the center was increasing very rapidly, along with the firm's growth, and that some
    issues were arising about the quality of the service. To improve the quality and dramatically
    reduce the cost of the service, MB moved its call center to Bangalore, India, where it is now run
    by an experienced outsourcing firm, Naftel, which offers similar services to other banks like MB.
    The Naftel contract was for five years, and now in late 2008 it is time to consider whether to
    renew the contract, change to another call center service provider (in India or elsewhere), or
    bring the call center back to Atlanta.
    Some important factors to consider in the decision:
    • The value of the dollar has been increasing relative to most other currencies at the time of the
    decision in late 2008.
    • The financial crisis of 2008 continues to affect the banking business, and the outlook for
    growth for MB is not as rosy as it has been for the last few years. Top management and
    economic advisors for the bank have basically no idea what is the right forecast for the coming
    five years.
    • The employment rate in Atlanta has fallen in the last several months and there is a good
    supply of talented employees who might be recruited into the call center if it were relocated back
    to Atlanta.
    • The bank has just completed a new headquarters building in Atlanta and has a good bit of
    space in the building that MB has yet to lease. The outlook for the Atlanta economy is such that
    MB does not expect to lease much of this space for at least the next three years. If the call
    center were returned to Atlanta, it would occupy a space that would be rented for $100,000 per
    month, if there were a company that wanted to lease the space.
    • If renewed, the Naftel contract would cost $4,200,000 per year for the next five years.
    • The cost of salaries to staff the call center in Atlanta are expected to be $2,300,000 per year,
    the equipment would be leased for $850,000 per year, telecommunication services are
    expected to cost $500,000 per year, administrative costs for the call center are expected to be
    $600,000 per year, and the call center's share of corporate overhead is expected to be
    $400,000 per year.

    Required
    1. Should MB return the call center to Atlanta or renew the contract with Naftel? Develop your
    answer for both a one-year and a five-year time horizon. Consider the strategic context of the
    decision as an integral part of your answer. (Hint: using discounted cash flow is not required but
    would improve your answer; MB uses a discount rate of 6%.)

    Reach out to [email protected] for enquiry.


    2. What are the global issues that should be considered in the decision?
    3. What ethical issues, if any, should be considered in the decision?

    ANSWER
    https://solvedquest.com/merchants-bank-mb-is-a-large-regional-bank-operating-in/

    Reach out to [email protected] for enquiry.


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