2 Introduction
The Country Car Club (3C) was established fifty years ago to offer breakdown assistance to motorists. In return for an
annual membership fee, members of 3C are able to phone for immediate assistance if their vehicle breaks down
anywhere in the country. Assistance is provided by ‘service patrol engineers’ who are located throughout the country
and who are specialists in vehicle repair and maintenance. If they cannot fix the problem immediately then the vehicle
(and its occupants) are transported by a 3C recovery vehicle back to the member’s home address free of charge.
Over the last fifteen years 3C has rapidly expanded its services. It now offers vehicle insurance, vehicle history checks
(to check for previous accident damage or theft) as well as offering a comprehensive advice centre where trained staff
answer a wide range of vehicle-related queries. It also provides route maps, endorses hotels by giving them a 3C
starred rating and lobbies the government on issues such as taxation, vehicle emissions and toll road charging. All of
these services are provided by permanent 3C employees and all growth has been organic culminating in a listing on
the country’s stock exchange three years ago.
However, since its stock market listing, the company has posted disappointing results and a falling share price has
spurred managers to review internal processes and functions. A Business Architecture Committee (BAC) made up of
senior managers has been charged with reviewing the scope of the company’s business activities. It has been asked
to examine the importance of certain activities and to make recommendations on the sourcing of these activities
(in-house or outsourced). The BAC has also been asked to identify technological implications or opportunities for the
activities that they recommend should remain in-house.
First review
The BAC’s first review included an assessment of the supply and maintenance of 3C’s company vehicles. 3C has
traditionally purchased its own fleet of vehicles and maintained them in a central garage. When a vehicle needed
servicing or maintenance it was returned to this central garage. Last year, 3C had seven hundred vehicles (breakdown
recovery vehicles, service patrol engineer vans, company cars for senior staff etc) all maintained by thirty staff
permanently employed in this garage. A further three permanent employees were employed at the garage site with
responsibility for the purchasing and disposal of vehicles. The garage was in a residential area of a major town, with
major parking problems and no room for expansion.
The BAC concluded that the garage was of low strategic importance to the company and, although most of the
processes it involved were straightforward, its remoteness from the home base of some vehicles made undertaking
such processes unnecessarily complicated. Consequently, it recommended outsourcing vehicle acquisition, disposal
and maintenance to a specialist company. Two months ago 3C’s existing vehicle fleet was acquired by AutoDirect, a
company with service and repair centres nationwide, which currently supplies 45,000 vehicles to companies
throughout the country. It now leases vehicles back to 3C for a monthly payment. In the next ten years (the duration
of the contract) all vehicles will be leased from AutoDirect on a full maintenance basis that includes the replacement
of tyres and exhausts. 3C’s garage is now surplus to requirements and all the employees that worked there have been
made redundant, except for one employee who has been retained to manage the relationship with AutoDirect.
Second review
The BAC has now been asked to look at the following activities and their supporting processes. All of these are
currently performed in-house by permanent 3C employees.
– Attendance of repair staff at breakdowns – currently undertaken by permanent ‘service patrol engineers’
employed at locations throughout the country from where they attend local breakdowns.
– Membership renewal – members must renew every year. Currently renewals are sent out by staff using a bespoke
computer system. Receipts are processed when members confirm that they will be renewing for a further year.
– Vehicle insurance services providing accident insurance which every motorist legally requires.
– Membership queries handled by a call-centre. Members can use the service for a wide range of vehicle-related
problems and issues.
– Vehicle history checks. These are primarily used to provide ‘peace of mind’ to a potential purchaser of a vehicle.
The vehicle is checked to see if it has ever been in an accident or if it has been stolen. The check also makes
sure that the car is not currently part of a loan agreement.
6
Required:
(a) The Business Architecture Committee (BAC) has been asked to make recommendations on the sourcing of
activities (in-house or outsourced). The BAC has also been asked to identify technological implications or
opportunities for the activities that they recommend should remain in-house.
Suggest and justify recommendations to the BAC for each of the following major process areas:
(i) Attendance of repair staff at breakdowns;
(ii) Membership renewal;
(iii) Vehicle insurance services;
(iv) Membership queries; and
(v) Vehicle history checks. (15 marks)
(b) Analyse the advantages that 3C will gain from the decision to outsource the purchase and maintenance of
their own vehicles. (10 marks)
(25 marks)