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Strategy And Implementation

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Strategic planning focuses largely on managing interaction with environmental forces, which may include competitors, government, suppliers, customers, various interest groups and other factors that affect your business and its prospects. An organizations ability to deal with these groups will vary widely depending on the group and on the timing. For example, you may enjoy greater influence with your local government than with the federal government. Also, you may be able to get more of what you want from a supplier than from a competitor. However an organization can manage these and other relationships is one of the decisions they will make during the strategic planning process. Automatic Data Processing (ADP), is a pioneer in business processing outsourcing. In 2003, ADP made a strategic decision to expand their claims services operations to Hyderabad India. This paper will discuss the impact on the remote, industry as well as the operating environment based on this decision.

Automatic Data Processing Inc. (ADP) is considered a pioneer in business process outsourcing. ADP offers employer services, brokerage services, dealer services and claims services. The claims service division provides COBRA and Flexible Spending Account (FSA) services to national account clients. Over the past several years, ADP has experienced several challenges within this division. Some of these challenges include low client satisfaction, an overwhelming client base and better service provided by the competitors. With this in mind, ADP made a strategic division to outsource most of the services offered by client services to Hyderabad India. According to Robinson, "Businesses, regardless of geography or industry, are encountering unprecedented challenges managing their workforces" Some of these challenges may include the ever-changing advancement of technology, skill shortages, mergers and acquisitions. This decision has had a profound affect on the external as well as the internal operating environment. Off shoring operations are a major part of ADP's restructuring plan. According to ADPÐ''s 2002 annual report, the client services division suffered from stagnating sales in the weak economy, client loss, and fewer employees on client payroll. The same human resources outsourcing companies that sought out businesses for cost savings had to search for ways to cut cost themselves. ADP realized that one of the ways is to transfer operations overseas to a third-party vendor. The operations in India have provided the client services division within ADP quality manpower to help support client services with documented processes. In addition to the extra manpower, we are able to service our clients 24 hours a day with the time zone differential, which allows for higher productivity and finally, India, is considered ahead of the curve with respect to technology.

The nature and degree of competition in an industry hinge on five forces: the threat of new entrants, the bargaining power of customers, the bargaining power of suppliers, the threat of substitute products or services, and the jockeying among current contestants."(Pierce. p.90). ADP is considered the premier provider for payroll



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