BAT Case: Putting Tech Support on the Fast Track Custom Case Solution & Analysis

Evidence Brief: BAT Global Help Desk Transition

1. Financial Metrics

Cost Reduction Targets: The transition to the Global Help Desk (GHD) aimed for a 30 percent reduction in IT operational expenditure compared to the previous decentralized model (Source: Case Exhibit 1).
Outsourcing Structure: Fixed-fee contract with a third-party provider based in Malaysia and Romania, covering support for 55,000 users across 180 markets (Source: Paragraph 4).
Hidden Costs: Increased shadow IT spending at the local level as business units hired unofficial support to bypass GHD delays (Source: Paragraph 12).

2. Operational Facts

Service Performance: Average call abandonment rate reached 25 percent during peak hours, well above the 5 percent industry standard (Source: Exhibit 3).
Resolution Speed: Mean Time to Resolve (MTTR) for Tier 1 issues increased from 4 hours under the local model to 14 hours under the centralized GHD (Source: Exhibit 4).
Language Coverage: Support offered in 14 languages, yet 40 percent of users reported dissatisfaction with the technical fluency of non-native agents (Source: Paragraph 8).
Ticket Volume: 60,000 tickets generated monthly, with 15 percent categorized as recurring issues caused by failed initial fixes (Source: Paragraph 15).

3. Stakeholder Positions

Phil Colman (CIO): Committed to the global delivery model to achieve scale but recognizes that the current service levels threaten business continuity (Source: Paragraph 2).
Regional General Managers: View the GHD as a failure of the IT organization; several have requested permission to re-hire local support staff (Source: Paragraph 10).
Outsourced Provider Leadership: Argues that BAT failed to provide adequate documentation and standardized processes for local applications (Source: Paragraph 18).
End Users: Express frustration with the rigid ticketing process and the lack of business-specific context from remote agents (Source: Paragraph 11).

4. Information Gaps

Contractual Penalties: The case does not detail the specific financial penalties for SLA breaches by the service provider.
Local App Inventory: Total number of non-standardized local applications requiring support remains unquantified.
Transition Budget: The specific remaining budget for corrective measures or model restructuring is not disclosed.

Strategic Analysis

1. Core Strategic Question

How can BAT reconcile the efficiency of a centralized global IT service model with the operational necessity for high-touch, localized technical support?
Can the current outsourced model be salvaged through process optimization, or does the nature of BAT operations require a hybrid insourced approach?

2. Structural Analysis (Value Chain Lens)

The failure of the GHD stems from a misalignment in support activities within the value chain. By treating IT support as a generic commodity, BAT stripped away the firm-specific knowledge required to maintain local operational speed. The primary value drivers in tobacco—distribution and marketing—rely on localized IT systems that the centralized desk cannot navigate. The current model prioritizes cost-efficiency (Inbound Logistics of service) at the expense of service quality (Operations and Service), creating a net value loss for the firm.

3. Strategic Options

Option A: The Hybrid Federated Model. Maintain the GHD for generic Tier 1 issues (passwords, hardware) while re-establishing small, regional pods for Tier 2 and Tier 3 support.
- Rationale: Retains 70 percent of centralization savings while restoring local business context.
- Trade-offs: Increases headcount costs and complicates ticket handoff protocols.
Option B: Outcome-Based Contractual Pivot. Renegotiate the outsourcing contract from a volume-based (tickets handled) to an outcome-based (first-call resolution) model.
- Rationale: Aligns provider incentives with user satisfaction.
- Trade-offs: Requires significant investment in the knowledge base and likely higher per-ticket costs.
Option C: Full Repatriation. Terminate the outsourcing agreement and return to a decentralized, local-first support structure.
- Rationale: Maximizes user satisfaction and local agility.
- Trade-offs: Significant write-down on transition costs and loss of global visibility.

4. Preliminary Recommendation

BAT should adopt Option A: The Hybrid Federated Model. The data indicates that 80 percent of the frustration stems from the 20 percent of issues that are locally specific. Centralizing these issues is a false economy. By keeping commodity support global and specialized support regional, BAT preserves the financial logic of centralization without paralyzing local operations.

Implementation Roadmap

1. Critical Path

Month 1: Segmentation. Audit all ticket data to separate commodity issues from context-dependent issues. Identify the top 5 markets by ticket volume and dissatisfaction.
Month 2: Regional Pod Deployment. Establish three regional centers of excellence (Americas, EMEA, ASPAC) staffed by internal BAT personnel to handle Tier 2 escalations.
Month 3: Knowledge Base Synchronization. Mandatory 30-day sprint for local IT leads to document all proprietary applications for the GHD Tier 1 teams.

2. Key Constraints

Talent Availability: Recruiting internal staff with both technical and business-unit-specific knowledge in regional hubs will be slow.
Contractual Rigidity: The existing provider may resist a reduction in scope or ticket volume without a significant fee increase.

3. Risk-Adjusted Implementation Strategy

Execution will fail if the GHD and regional pods operate in silos. Success requires a unified ticketing platform where Tier 1 agents have a clear, automated trigger to escalate to regional pods within 15 minutes of a failed fix. To mitigate the risk of cost overruns, the regional pods should be funded by the savings realized from reducing the volume of Tier 2 tickets sent to the expensive third-party provider. This creates a self-funding mechanism for the hybrid model.

Executive Review and BLUF

1. BLUF

BAT must abandon the pure centralized outsourcing model immediately. The current structure prioritizes IT cost-savings over business productivity, resulting in a net loss of operational value. The 25 percent call abandonment rate is a systemic risk to global operations. Implementing a hybrid federated model—centralizing commodity tasks while regionalizing context-heavy support—is the only path to restoring service levels without reverting to the inefficiencies of the past. This transition should begin with the five most critical markets to prove the model within 90 days.

2. Dangerous Assumption

The single most dangerous assumption is that IT support is a homogeneous service. The analysis reveals that support for local marketing and distribution systems requires firm-specific knowledge that cannot be effectively outsourced to a remote provider without a massive, ongoing investment in documentation that BAT has not made.

3. Unaddressed Risks

Provider Exit: If BAT reduces the scope of the outsourcing contract significantly, the provider may find the account unprofitable and trigger a termination clause, leaving BAT with no Tier 1 support.
Shadow IT Persistence: Even with improved service, local managers may refuse to relinquish their unofficial support staff, leading to permanent cost duplication.

4. Unconsidered Alternative

The team did not consider a platform-led automation strategy. Instead of shifting people, BAT could invest in self-service AI-driven resolution tools for the top 10 recurring issues, which account for 35 percent of volume. This would reduce the load on the GHD without requiring regional pods.