Prospects and challenges of outsourcing in the context of power grid company of Bangladesh limited

Abstract

Power Grid Company of Bangladesh Limited is an Autonomous organization of Bangladesh which is responsible for the transmission of all generated power all over the country. The company is an entity of Power Division under the Ministry of Power, Energy and Mineral resources of Bangladesh. The vision of PGCB is Economic upliftment of the country by reaching electricity to all through reliable transmission. Cost reduction, efficiency and effectiveness is the main concern of every organization. As a result, most of the organization is now focusing on how cost could be minimized without compromising with the product or services. Most of the organizations now prefer outsourcing for the non-core activities such as security service, cleaning, catering, call center maintenance service and transportation etc. to concentrate more on core activities. Outsourcing has numerous benefits such as improving the quality, cost reduction, using the technology of the supplier, budgetary control, lower cost of capital, improved resources, concentrating more on core activities, lower administrative cost etc. Outsourcing has some risks and challenges also. The main challenges are internal resistance of the organization, employee regulation, choosing the right supplier etc. There are some risks also which could be losing of skill staffs, loss of control, problem of replacing supplier, legal issues etc. PGCB is the largest organization is power sector with a man power of around 3000 persons. It has huge infrastructure such as sub-stations, transmission lines, offices and other assets. As per the power sector master plan, 2016 within 2021 the generation of power will be 24000MW, within 2031, 40000MW and within 2041, 60000MW. To transmit this power all over the country PGCB will require huge number of resources and existing manpower will have to be four times. The present cost for a regular employee is higher than other companies including other benefits. If the number of employees increases the cost will be increase more. Different infrastructures of PGCB are KPI areas. As a result for the safety of these structures huge numbers of security staffs are required. For periodic and emergency maintenance around one fourth of the total employees are engaged. If the security service and part of the maintenance service is outsourced to the third party service provider whose core tasks are these, it will save huge cost and time for PGCB. As a result the transmission loss and availability of sub-stations will increase which will impact on the iv profit margin of PGCB. Implementation of outsourcing is PGCB is a difficult task because of the internal resistance from the CBA, risk of losing key technical staffs, choosing wrong suppliers, replacing existing suppliers etc. This research is an approach to find out the prospects and changes of outsourcing in PGCB in the light of procurement and supply chain management.