y y y y Software experiments. According to Nasscom's findings Indian IT-BPO industry expanded by 12% during the Fiscal year 2010 and attained aggregate returns of US$ 71. Custom Application Development and Maintenance (CADM). As per NASSCOM. y The industry is governed by IT software and facilities like System Integration.Overview y The IT industry has played a major role in placing India on the International map. the Indian IT exports are anticipated to attain US$ 175 billion by 2020. The recent multi million dollar agreements in the IT industry:  A 5 year agreement between HCL Technologies and News Corp for administering its information centers and IT services in UK. UST Global and Infosys Technologies for a contract worth US$ 600 million .6 billion. network services and IT solutions.  Global giant Walmart has short listed there Indian IT dealers namely Cognizant Technology Solutions. Since many years India has been an Outsourcing hub due to its reasonably priced labor. growing economy and availability of technically proficient workforce. In total the export and domestic IT sector are expected to attain profits amounting to US$ 225 billion along with new prospects from BRIC nations and Japan for its outsourcing operations. As per the industry analysts. the pact is estimated to be in the range of US$ 200-US$ 250 million .

IT infrastructure outsourcing and Enterprise Solutions.Siemens. Major Clients: Motorola. security services and storage services. with three major offices in Australia. It serves in 90 locations globally. Pioneer.Major Players in IT outsourcing y IBM Global Services. application management services. data center outsourcing services.8 billion and employs 399. Visteon y Computer Sciences Corp (CSC) . It witnessed highest growth among the top ten vendors in 2010.CSC is the third largest IT outsourcing company in the world. It has a revenue of $95.000 professionals and had a revenue of 16. It provides a wide range of IT outsourcing services including system integration.IBM Global Services is the largest IT outsourcing company in the world. which an increase of 22 percent in its revenues.2010. Cisco systems. e-business hosting services. application outsourcing.HP is also one of the top ten IT outsourcing companies. end-user workplace management. An array of services provided: application development. Major Clients: Oracle. system integration. y Hewlett Packard (HP) . Nortel. support services. maintenance. help desk services and software supply chain.409 employees worldwide. Major Clients: Lucent Technologies. .1 billion $ for the second quarter ending October. Europe and Asia. It presently employs 94. Sun Microsystems and Thales Electronic Devices . networking. HP¶s IT outsourcing services include application management.

enterprise security. architecture consulting. Adidas group. Infrastructure services. Numonyx. the company has grown rapidly and now employs 127. it also makes economic sense with least amount of risk. Wipro currently has over 800 active clients. . system integration. Major clients: ABB(UK. business intelligence and data warehousing. Vodafone.US). Analog Devices. testing services and web services. System Integration services and many more. Major Clients: Pitney Bowes. Woolworths etc. business intelligence. Cisco Systems etc. which is based on the principle of taking work to the location which offers best talent. Architecture services.7 billion US $( As per Dec¶ 2010).000 employees worldwide . Colt Technology Services y Wipro . TNT. e-commerce. enterprise applications services. Its IT outsourcing services include application development and maintenance. e-business. NXP semiconductors. when it was established. Hughes Networks Systems.00.y Infosys. Fujitsu Network communication. Wipro has business operations in over 55 countries and has 72 global delivery centres.TCS is a subsidiary of the Indian corporate giant ± Tata provides IT outsourcing services such as application development and maintenance. AGL energy. Since 1981. Infosys also pioneered the Global Delivery model. Major Clients: ABB.Infosys has been the pioneer in offshore IT outsourcing.Wipro is yet another Indian IT major with a revenue of US$ 6 billion(2009-2010) and employs 1. Kodak. e-learning and enterprise application integration. Infosys provides various IT outsourcing services including application development. Sygenta AG. Corporation bank.779 professionals worldwide with a revenue of 5. y Tata Consultancy Services. Knowledge services. Sony pictures.

y ABB Systems Ltd. is an IT company that functions on a customers come first ideology. y Activities to be outsourced:       Storage and data services Integrated communication services IT strategy and architecture services Maintenance and technical support services Site and facilities services.Since technology support is an essential area for the efficient working of our business. . diagnose hardware/software faults and solve technical and applications problems.in case a new technology needs to be introduced in the company. outsourcing this function will lead to cost savings. They can help in testing and evaluating the new technology.134 crores.ABB Systems Ltd. Also. collaborate and connect. y Headquartered in Gurgaon with a revenue of around Rs. IT support services. we will be supported by IT technical support officers to install and configure computer systems. We focus on creating long lasting partnerships with customers by identifying their needs and provide solutions that support them. y We are committed to innovation and Research and Development focusing on how people communicate.

supplies and equipment 4) INBOUND AND OUTBOUND LOGISTICS . control systems. processes and services that collectively deliver value to the firm's business components and services and.Value Chain The IT value chain refers to the IT components. to the firm's external customers y PRIMARY ACTIVITIES: 1)TECHNOLOGY DEVELOPMENT 2)OPERATIONS 3) MAINTENANCE 4) RESEARCH AND DEVELOPMENT 5)MARKETING AND SALES y SECONDARY ACTIVITIES: 1)INFRASTRUCTURE: Organization structure. potentially. company culture etc. 2)HUMAN RESOURCE MANAGEMENT 3)PROCUREMENT: Purchasing of raw material.

Core and Critical Activities y CORE ACTIVITIES:  NETWORKING  ASSEMBLING AND SYSTEMS INTEGRATION  CUSTOMER SERVICE y CRITICAL ACTIVITIES:          RESEARCH AND DEVELOPMENT IT SUPPORT AND MAINTENANCE(ON SITE) SECURITY AND STORAGE IT STRATEGY AND ARCHITECTURE IT INFRASTRUCTURE PRODUCT DESIGN SUPPLY CHAIN MANAGEMENT TRANSPORTATION MARKETING .

NON CRITICAL  CAFETERIA  SECURITY SERVICES .CONTINUED« y CORE -CRITICAL  MARKETING AND BRANDING  CUSTOMER SERVICES  NETWORK SERVICES  ASSEMBLING  SUPPLY CHAIN y CORE-NON CRITICAL  PRODUCT DESIGN  ADVERTISING y NON CORE ± CRITICAL  TRANSPORTATION y NON CORE.

y y y Software and Application services-Outsourcing can provide higher expertise and latest applications software's and their implementation. . implementing a new technology or software and for installing of systems. cost saving and getting an assembly of best available parts in the market to develop a quality finished product can be achieved y Customer Services. Supply Chain-This is an essential activity of our company since the assembling ad integration is done on site. saving time so that our company can concentrate on its core activities.By outsourcing this particular function.Activities to be Outsourced y IT Support and Maintenance-This function needs to be outsourced so that technical support is constantly available for hardware/software faults.Customer support services needs to be outsourced for cost saving. Manufacturing.

IT Infrastructure services. .Vendors y Infosys.Manufacturing of certain hardware parts. customer support services y Wipro. y IBM.Application and Software Services y HCL Technologies.Manufacturing of certain hardware parts.

Reasons for Outsourcing y Tactical Reasons for Outsourcing y Strategic Reasons for Outsourcing .

Companies outsource because they lack required resources. if an organization is expanding its operations. especially into a new geographic area. vehicles. Outsourcing reduces the need to invest capital funds in noncore business functions. Outsourcing is certainly one option for addressing functions that are difficult to manage or out of control. mean abdication of management responsibility. Outsourcing does not. Lack of internal resources. in effect. sold to the provider as part of the outsourcing transaction. Cash infusion. Outsourcing can also improve certain financial measurements of the firm by eliminating the need to show return on equity from investments in noncore areas. outsourcing offers a practical and important alternative to building the needed capability from the ground up.Tactical Reasons for Outsourcing important tactical reason for y Reduction or control of operating costs. and licenses used in current operations all have a value and are. For example. nor does it work well as a knee-jerk reaction by companies in trouble . Outsourcing can involve a cash payment resulting from the transfer of assets from the customer to the provider. Increased availability of capital funds. Equipment. however. The single most y y y y outsourcing is to reduce or control operating costs. Access to the outside provider's lower cost structure is one of the most compelling short-term benefits of outsourcing. Problematic functions. facilities.

Strategic Reasons for Outsourcing y Improve business focus. Every organization has limits on the resources available to it. procedures. and techniques. When companies outsource. tools.one that is already reengineered to world-class standards -. There are tremendous risks associated with the investments an organization makes.and documentation. they can be more flexible. It allows an organization to realize the anticipated benefits of reengineering by having an outside organization -. and adaptable to changing opportunities. Accelerated reeingineering benefits. Outsourcing permits an organization to redirect its resources from noncore activities toward activities that have greater return in serving the customer. Outsourcing is often a by-product of business process reengineering. outsourcing providers bring extensive worldwide resources to meeting the needs of their customers. By the very nature of their specialization. . and competitive advantage through expanded skills.take over the process. Shared risks. increased career opportunities for personnel who make the transition to the outsourcing provider. more-structured methodologies. An organization with world-class capabilities offers access to new technology. Redirection of resources. dynamic. Outsourcing lets a company focus on broader business issues y y y y while having operational details assumed by an outside expert. Access to world-class capabilities.

you could see a combination of these models in operation. y In a typical IT organization. y Governance Based Model y Pricing Based Model y Project Based Model .Outsourcing models in IT Sector y Outsourcing is the process of shifting/delegating/transferring a service/process/function to a third-parties/external service provider which would otherwise be an in-house function/service/process.

This model has three different flavors to it. this model is based on the strategy adopted to govern the project or the project organization or the project team. y Professional Services or Staff Augmentation y Co-Managed and y Managed Services or Fully Outsourced. .Governance based model As the name itself suggests.

where the defining guideline are the payments to vendors or the pricing of the work order. as the name itself suggests this model is based on Price. .Pricing based model Again. There are different types of Pricing Models in existence today. y Managed Capacity and y Fixed Price projects. These are y Time and Material.

The hybrid model may comprise Staff Augmentation. a hybrid model of information technology outsourcing can be seen in operation.y Project/Engagement based model or Hybrid Model: In most organizations. Managed Capacity. Managed Services. Usually choice of models for each project or engagement is decided based upon a few parameters that are detailed below: y y y Maturity Price Work . but most will be. Time and Material and Co-Managed y Not all models will be in operation. Fixed Price.

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