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 .

11. MAKE THEM A STRATEGIC PARTNER   . 7. EVALUATE AND SELECT YOUR SUPPLIERS WITH CARE 6.KEYS TO EFFECTIVE OUTSOURCING 1. 3. 5. TRAIN AND EDUCATE THE SUPPLIERS 8. REVIEW RESULTS TOGETHER 10. IDENTIFY THE NEED FOR OUTSOUCING 2. NEED ASSESMENT 4. 9.

     7. BETTER RELIABILITY AND SCALABILITY ON DEMAND • •  . COST EFFICIENT 4. HIGHLY COLLABORATIVE CLIENT-SERVICE PROVIDER RELATIONSHIP • • Mitigate complexity • Reduce transaction costs • Gain competitive advantages   REQUIREMENTS • More transparency • Better communication • Greater trust • Genuine reciprocity • 8. 9.

external services and support to assure they achieve organizational goals and return on investment. 8. • Manage internal resources. MEETING PLANNERS 11. 9. • 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. 10. .4. 7.

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” .

5% = 30.5% 2000 1990 ’ s . IS WELL POSITIONED TO LEVERAGE THE KPO OPPORTUNITY Revenues (India) for 2003-04: IT Outsourcing BPO KPO = USD 21.5 billion = USD 3.72 billion Knowledge Process Outsourcing This involves advanced analytical and technical skills as well as some decision making Business Process Outsourcing This involves offshoring of lowend (contact center kind of) work IT Outsourcing This involves offshoring of IT services.6% = 49.INDIA. offshore software development and support Expected CAGR during 2003-2010: IT Outsourcing BPO KPO 1998 = 27. WITH ITS STRONG IT AND BPO BACKGROUND.9 billion = USD 0.

GLOBAL KPO MARKET IS EXPECTED TO BE USD 17 BILLION BY 2010. the major revenues will come from six prominent sectors . etc. etc.) Rem ote Education and Publishing Anim ation and Sim ulation Service s (incl. several new KPO services will become prominent in the global offshoring space 100% 29 75% 44 12% 8% 9% 29% 50% 71 25% 56 12% 12% Data Search. Integration and M anagem ent Biotech and Pharm a 18% Engineering and Design (incl. Analytics) Others Indian KPO sector will increase its share in the Global KPO sector to 71% by 2010 from 56 % in 2003 Out of the estimated opportunity of USD 17 billion in the KPO sector in 2010. WITH INDIA HAVING 71 % SHARE KPO market in India = USD 12 billion by 2010 Global KPO market = USD 17 billion by 2010 By the year 2010. Biote ch. VLSI. Highway Design.) 0% 2003 2010 In d ia R e s t o f W o rld R&D (excl. Pharm a & VLSI.

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 .000 Revenue generation (2010) Employment opportunity (2010) BPO USD 18 billion 820.shore services KPO USD 12 billion 250.000 .

KPO GROWTH DRIVERS DEMAND-SIDE TRENDS SUPPLY-SIDE TRENDS §Shortage of knowledge professionals in developed nations §Cost pressure §Reduced time to market §Need for more flexibility §BPO and IT vendors maturing §Players moving up the value chain §Increasing domain expertise § .

THE INDUSTRY WILL KEEP GROWING DUE TO ADDITION OF NEWER PROCESSES Individual BPO processes will witness their respective lifecycles The combined effect is equivalent to an ever 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.

20 BPO Buy 25 .35 KPO 0 10 20 30 40 USD per hour .25 Make BPO KPO 35 . FOR SMES… 15 . ESP.40 Advantages of ‘Buy’ vs. ‘Make’: Faster ramp up Lower complexity Lower cost Better control 10 .‘BUY’ INCREASINGLY BECOMING PREFERRED SETUP.

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 • .WIPRO • • • •    Wipro Business Process Outsourcing (BPO) is a leading provider of BPO services focusing on the complex.

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’. This implies that rather than merely running isolated processes for customers.      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. India’s domestic business process outsourcing (BPO) market is set to touch USD 6.700 crore) by 2013.82 billion (around Rs 31. 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.  • • •  . The domestic BPO market is evolving into third-party ‘transformational outsourcing’ relationships from the existing captive dominated market structure.

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