Workshop on Business Transformation Outsourcing

BUSINESS TRANSFORMATION OUTSOURCING IS THE FUTURE OF OUTSOURCING BTO Industry : Third Generation of Outsourcing Joydip Chakladar Management Guru http://isbtbschool.allindialive.org

TRADITIONAL OUTSOURCING VS BTO Joydip Chakladar Management Guru http://isbtbschool.allindialive.org TRADITIONAL OUTSOURCING BUSINESS TRANSFORMATION OUTSOURCING (BTO) Modest improvement in cost, service levels and support capabilities BTO brings improvement in performance , which can be measured in tangible gains in share price ,market position and return on capital and create strategic value High scale but narrow scope High scale and Broad scope

FIRST GENERATION

MEGA DEALS -In the first generation, one big vendor took home a mammoth deal. For instance, EDS bagged the $10bn Xerox contract or IBM-Kodak signed an $8bn IT outsourcing deal

Joydip Chakladar Management Guru http://isbtbschool.allindialive.org

SECOND GENERATION

In the second wave, that is, in the 1990s and till recently, the deal size was still big but smaller than the first generation. Like the $4-bn IBM deal with Cable & Wireless.”

THIRD GENERATION

The third generation deal is typified by the rise of offshore companies (like TCS, Wipro, Infosys). Deals are getting smaller and being split among multiple vendors. Like the $2.2bn ABN Amro outsourcing deal. That one involved IBM, Accenture, TCS, Infosys and Patni Computer Systems.

BUSINESS TRANSFORMATION OUTSOURCING IS THE FUTURE OF OUTSOURCING Challenges and Opportunities in BTO industry. Joydip Chakladar Management Guru http://isbtbschool.allindialive.org

BTO OPPURTUNITIES & CHALLENGES

BTO is a response on recognizing the fact that all operations cannot be successfully outsourced. Instead the company , should retain some key process in order to stay competitive.

The decision is strategic and critical that which operation process the company should and what it should outsource. This is the biggest challenge in BTO project.

NATURE OF BTO PROJECTS

Customer retains the Business Unit (IT or HR)

Engages the vendor to improve the subject business Unit, by leveraging the knowledge and capabilities of the vendor.

HOW DOES A BTO PROJECT GETS EXECUTED

Phase I : Traditional Off shoring solutions which create significant savings from labor arbitrage to permit the investment in the SBU.

Phase II : A comprehensive review and analysis of the existing process, procedures and tools used by the SBU. Following the best practices which should be adopted by the SBU. This analysis phase can take number of years. It is in fact the a version of traditional consulting services with steroids.

Phase III : In this phase the vendor’s employee work side by side with the SBU employee to implement the new process , procedures and tools.

BUSINESS TRANSFORMATION OUTSOURCING IS THE FUTURE OF OUTSOURCING Entrepreneurs roadmap for tapping the BTO opportunity Joydip Chakladar Management Guru http://isbtbschool.allindialive.org

ANALYSIS OF BTO PROJECTS FROM ENTREPRENEURS PERSPECTIVE

BTO PROJECTS HAVE MORE CUSTOMER RESPONSIBILITY THEN THE TRADITIONAL OUTSOURCING PROJECTS WHICH MEANS THE CHANCES OF FAILURES ARE LESS IN A BTO PROJECT.

THIS STANDS AS AN OPPURTUNITY FOR AN ENTREPRENUER TO VENTURE IN BTO INDUSTRY

ENTREPRENEURS ROADMAP

BTO PLANNING AND ANALYSIS

NEGOTIATION FOR A BTO PROJECT

BTO PROJECT GOVERNANCE

BTO PROJECT PLANNING AND ANALYSIS

BTO PROJECT AGREEMENTS ARE MORE CLOSER TO A STANDARD CONSULTING AGREEMENT THEN AN STANDARD OUTSOURCING AGREEMENT.

IN A BTO PROJECT THE PARTIES WORKS BACKWARDS AND THEY FIRST AGREE ON THE STRATEGIC GOALS, AND THEN ONLY COME AND WORK ON THE DESCRIPTION OF SERVICES, ONCE THEY HAVE DRAWN THE BASELINE FOR MEASURING THE PROGRESS ON THE PROJECTS.