EFFECTIVE OUTSOURCING

PRESENTED BY

ROSHINI MANOHAR
 DRIVERS

• Control Costs
• Improve operational efficiency
• Abundance of skilled manpower
• Lack of availability of internal resources
• Improve speed and time-to-market
• Optimum utilization of resources
• Focus on core competencies and innovation
• Greater flexibility and competitiveness
• Availability of functional expertise and domain knowledge
• Global best practice
•
•
•
•
 PROCESS OF OUTSOURCING

FOUR STAGES


• Strategic thinking
• Evaluation and selection
• Contract development
• Outsourcing management or governance


SUCCESS DEPENDS ON


• Executive-level support in the client organization

• Ample communication to affected employees
• The client's ability to manage its service providers
•
•

•
CHALLENGES
 KEYS TO EFFECTIVE OUTSOURCING

1. IDENTIFY THE NEED FOR OUTSOUCING

2.
3. NEED ASSESMENT
4.
5. EVALUATE AND SELECT YOUR SUPPLIERS WITH CARE
6.
7. TRAIN AND EDUCATE THE SUPPLIERS
8.
9. REVIEW RESULTS TOGETHER
10.
11. MAKE THEM A STRATEGIC PARTNER






7. HIGHLY COLLABORATIVE CLIENT-SERVICE PROVIDER RELATIONSHIP



•
• Mitigate complexity
• Reduce transaction costs
• Gain competitive advantages


REQUIREMENTS
• More transparency
• Better communication
• Greater trust
• Genuine reciprocity
•
8. COST EFFICIENT
4.
9. BETTER RELIABILITY AND SCALABILITY ON DEMAND
•
•
4.
7.
8.
9.
10. MEETING PLANNERS
11.
• Manage internal resources, external services and support to assure they achieve
organizational goals and return on investment.
• Establishing goals and objectives
• Performance standards
• Clarity of direction and leadership
• The post event evaluation
 Quality
 Costs
 Improved partnering on future projects


• “ESSENCE OF OUTSOURCING” is when both sides are committed to a

productive partnership and always strive to improve, the relationship will
prosper.
 AVOIDING PITFALLS

• Clarity of Purpose and the Objective

• Clear Contract
• Contract Duration & Review
• Picking the Right Partner
• Make It Win/Win!
• Governance & Communication
 RISKS

• Cost-Reduction Expectations
• Data Security/Protection
• Loss of Business Knowledge
• Vendor Failure to Deliver
• Government Oversight/Regulation
• Culture
• Knowledge Transfer
• Coordination costs
• Loss of internal logistics management capability
• Reduced contact with final customer
•

•
INDIA - “THE GLOBAL LEADER”
 INDIA, WITH ITS STRONG IT AND BPO BACKGROUND, IS WELL
POSITIONED TO LEVERAGE THE KPO OPPORTUNITY

Revenues (India) for 2003-04:

Knowledge Process
IT Outsourcing = USD 21.5 billion
Outsourcing
BPO = USD 3.9 billion
KPO = USD 0.72 billion This involves advanced
analytical and technical
skills as well as some decision
making

Business Process Outsourcing

This involves offshoring of low-
end (contact center kind of) work
IT Outsourcing
This involves offshoring of IT
services, offshore software Expected CAGR during 2003-2010:
development and support IT Outsourcing = 27.5%
BPO = 30.6%
KPO = 49.5%

1990 ’ s 1998 2000

 GLOBAL KPO MARKET IS EXPECTED TO BE USD 17 BILLION BY 2010,
WITH INDIA HAVING 71 % SHARE

KPO market in India = USD 12 billion by 2010 By the year 2010, several new KPO services will
Global KPO market = USD 17 billion by 2010 become prominent in the global offshoring space

100%
9%
8% 29%
29
44 12%
75%

50%
12%
18%
12%
71
56 Data Search, Integration and M anagem ent
25%
Biotech and Pharm a
Engineering and Design (incl. VLSI, Highway Design, etc.)
0% R&D (excl. Biote ch, Pharm a & VLSI, etc.)

2003 2010 Rem ote Education and Publishing

Anim ation and Sim ulation Service s (incl. Analytics)
In d ia R e s t o f W o rld Others

Indian KPO sector will increase its share in the Out of the estimated opportunity of USD 17 billion
Global KPO sector to 71% by 2010 from 56 % in in the KPO sector in 2010, the major revenues will
2003 come from six prominent sectors
 SEVERAL MNCS OFFSHORING HIGH-END WORK TO INDIA

Pharma/Biotech

Semiconductor

Telecom and IT

Financial Services

Multinational Companies
 …TO OFFER MASSIVE EMPLOYMENT OPPORTUNITY …

Indian non - IT off - shore

services

USD 12 billion
KPO
250,000 Revenue generation (2010)

Employment opportunity (2010)

USD 18 billion
BPO
820,000
 KPO GROWTH DRIVERS

DEMAND-SIDE TRENDS SUPPLY-SIDE TRENDS

§Shortage of knowledge §BPO and IT vendors

professionals in developed maturing
nations
§Players moving up the
§Cost pressure value chain
§Reduced time to market §Increasing domain expertise
§

§Need for more flexibility

 ..THE INDUSTRY WILL KEEP GROWING DUE TO ADDITION OF NEWER
PROCESSES

Individual BPO processes will witness their The combined effect is equivalent to an ever
respective lifecycles growing industry

Industry Size
Industry Size

Time
Time

The size of addressable market for BPO is high and it is expected to increase for many years. These
market show no signs of maturity in the foreseeable future.
 ‘BUY’ INCREASINGLY BECOMING PREFERRED SETUP, ESP. FOR SMES…

15 - 25

BPO 35 - 40
Make

Advantages of ‘Buy’ vs.

‘Make’:
KPO
Faster ramp up
Lower complexity
10 - 20 Lower cost
Better control
BPO 25 - 35
Buy

KPO

0 10 20 30 40
USD per hour
 WIPRO
•
•
• Wipro Business Process Outsourcing (BPO) is a leading provider of BPO services
focusing on the complex, voice and non-voice based segment of customer-care
services.
• The integrated solution approach provides enhanced value to the
customers through
 Process standardization
 Process simplification
 Process optimization
•


 ENTERPRISE BPO


• The technology dependency across industry domains has increased with each passing year.
• At Wipro BPO we have leveraged our range of enterprise services to enable diverse domains
meet existing technology and functional requirements.
• Our best-in-class solutions provide you with a platform to take your enterprise to the next
level of operational excellence.


 DOMESTIC BPO


• With nearly 500 players, India’s domestic business process outsourcing (BPO) market is set to
touch USD 6.82 billion (around Rs 31,700 crore) by 2013.
• The domestic BPO market is evolving into third-party ‘transformational outsourcing’
relationships from the existing captive dominated market structure.
• This implies that rather than merely running isolated processes for customers, BPOs would
engage more deeply to identify and transform core business processes to add greater
market value in the ‘creation and delivery of end products and services’.

THANK YOU