Outsourcing – The Green Answer (Ari Marjamaa, Dnv Maritime Advisory)

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Presentation given at the Tradewinds conference on PerformanceCritical Outsorcing in Oslo 2009

Presentation given at the Tradewinds conference on PerformanceCritical Outsorcing in Oslo 2009

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  • 1. Outsourcing – the green answer? Performance critical outsourcing for the maritime industry Ari Marjamaa, Director DNV Maritime Advisory Nordic November 18th, 2009
  • 2. Framing the issues Can outsourcing - Play a role in helping ship owners conform to new regulations? - Contribute to a company’s green profile? Is the growth of outsourcing a threat or an opportunity for class? Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 2
  • 3. Change in regulations? What changes? Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 3
  • 4. Environmental regulations are here to stay BEYOND CO2PENHAGEN FUTURE REGULATIONS BALLAST WATER EEOI RECYCLING EEDI SEEMP CO2 NOx, SOx & “PM” SCRUBBERS FUEL LEVY VOC ETS +++ But also: Increased stakeholder awareness Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 4
  • 5. Compliance depends on your capabilities TECHNOLOGY PROCESSES PEOPLE & & ACTIVITIES COMPETENCE Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 5
  • 6. Most companies face the capability gap NEW TECHNOLOGY INCREASING FLEET & CAPABILITY COMPLEXITY INCREASING COMPETITION ities abil cap CHANGING ired ny requ REGULATION pa Com Status quo NEW MARKETS Compan y capabi lity outlo ok LOWER EMPLOYEE RETENTION FINANCIAL PRESSURES COST CUTTING TIME Outsourcing – the green answer? 18 November 2009 11 November 2009 Slide 6 © Det Norske Veritas AS. All rights reserved. 6
  • 7. Your capabilities determine your green performance Technology vs capability – what matters the most? World class 5 Arctic spills capability 4 CO2 Waste CAPABILITY VS 3 Alien Species TECHNOLOGY Mammal 2 1 NOx Technology 0 0 1 2 3 4 5 Environm ental im pact ENVIRONMENTAL IMPACT (Measured as environmental significance, impact on brand, cost and compliance) Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 7
  • 8. Access to capabilities increasingly drive outsourcing EXAMPLE: SHIP MANAGEMENT COST AS DRIVER DILEMMA 1970s 2000+ TODAY: ACCESS TO LOWER COST & 1990s CAPABILITIES AT THE SAME TIME CAPABILITIES AS DRIVER Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 8
  • 9. The same discussion…in 1998 It's a sad thing that people who have known about the imposition of ISM becoming mandatory for the past four years are now, some of them, still rushing to gain certification. BRUCE W.B. LUCAS Atlantic Marine Vessel owners with smaller number of vessels would benefit RAMESH BHAT by having 3rd party managers to Jardine Ship deal with the ever demanding Management maritime legislation worldwide. Outsourcing – the green answer? 18 November 2009 http://www.marinelog.com/DOCS/sman.html © Det Norske Veritas AS. All rights reserved. 9
  • 10. So, can outsourcing help ship owners conform to new regulations? And does it contribute to a company’s green profile? Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 10
  • 11. YES… Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 11
  • 12. …but it all depends on what you can outsource Strategically important In-house IMPORTANCE TO PRIME PURPOSE Outsourced Not strategically important Not needed Critical CORE COMPETENCE TO ACHIEVE PURPOSE Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 12
  • 13. Managing uncertainty and risk through outsourcing If you do not have the technology… …outsourcing might give you cost efficient access to it If you do not have the right people & competence… …outsourcing might let you get access to them quickly, without developing from scratch If you do not have the right processes & activities… …outsourcing might let you leverage on something that already exists But will you need the capabilities in the future? Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 13
  • 14. Outsourcing places demands on the company Fundamental competence 3rd party available in- support to house to select, OR select, monitor monitor and and control 3rd control 3rd party party services services Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 14
  • 15. Partnerships contribute to company image and brand Green Ship of the Future Sustainable shipping Clean Cargo SEAaT BUT ONLY REAL CAPABILITIES CAN BUILD A REAL GREEN PROFILE Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 15
  • 16. All in all, outsourcing can be good for you SOME ADVANTAGES… …AND SOME BUTs Good for the company The 3rd party supplier - Quicker needs to offer significant - Cheaper advantage - Less hassle You still need to be in Good for the industry control - Quicker ramp up to meet requirements You will not be a green - Knowledge diffusion champion solely through - Drive innovation outsourcing Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 16
  • 17. Is the growth of outsourcing a threat or an opportunity for class? Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 17
  • 18. The survey is still a complex process… Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 18
  • 19. …with some critical success factors Efficient organization of TIME work Decision making Number of parties involved TRANSACTION COST Effective organization of work COMPETENCE Competent counterparties Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 19
  • 20. Opportunities – and some challenges too Drive development Need for verification Competent counterparties Conflict of interest Lack of clear mandate Interaction with too many parties Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 20
  • 21. Peanuts does not always get you monkeys Monkeys, or elephants, are not always what you need Some times, all you need is a cost efficient expert Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 21
  • 22. Safeguarding life, property and the environment www.dnv.com Outsourcing – the green answer? 18 November 2009 © Det Norske Veritas AS. All rights reserved. 22