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                  Outsourcing

                  September 20, 2010




The views expressed in this presen...
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                                       Typical Corporation
                                                ...
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                                       Globalization of Services
IT Services
•   IT & IT enabled
    servi...
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                                        Outsourcing Models

• The best models are
  those that have at lea...
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                                  Team Structure – Outsourced offshore Model
Typical team structure
for a ...
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                                  Team Structure – Co-Sourced offshore Model
Typical team structure
for a ...
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                                    Economics – Typical IT Rates (Rack)
Experience Level
                 ...
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                  Outsourcing 2.0 Model
                   The significant problems we face cannot be solv...
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                                 Outsourcing Spend

•   Global outsourcing market was nearly US$373 billio...
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                                   Outsourcing Predictions - ZDNet
1.   Locus of power will move from the ...
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Program Meeting: 'Outsourcing' (St. Louis, Sep 2010)

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BDPA St. Louis chapter focused their September 2010 program meeting on “The Future of Outsourcing”. This was a very informative topic presented by Mr. Nash Anwar.

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Program Meeting: 'Outsourcing' (St. Louis, Sep 2010)

  1. 1. version 3 2 Outsourcing September 20, 2010 The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies of Edward Jones or any other organization.
  2. 2. version 3 2 Typical Corporation Technology Services Business Process Services • Application • Accounts Payable Business Development/Enhancements • Accounts Receivable Process • Administration • Data Warehousing • Infrastructure Management • Billing Technology • Application Technology • Bookkeeping Transformation • Call Center • Product Engineering • Claims Processing • Customer Service • Enterprise Resource Planning (ERP) • Due Diligence • Financial Services • Enterprise Application Integration (EAI) • Market Research • Sales and Marketing • Strategy and Analysis • Testing e-Business/Client Services Employees • Portals Employees • Customer Relationship • Contract Management Management (CRM) • Facilities Management Clients • Mobility • Payroll/Benefits • Web Enabling • Staffing The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 2 of Edward Jones or any other organization.
  3. 3. version 3 2 Globalization of Services IT Services • IT & IT enabled services outsourcing • Services USA portfolio/range Canada • Application Europe development and management • Technology services • Business process management services Ireland • Data Entry Eastern Europe • Infrastructure South America Management Brazil • Infrastructure Costa Rica operations Asia & Pacific India China Israel Philippines The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 3 of Edward Jones or any other organization.
  4. 4. version 3 2 Outsourcing Models • The best models are those that have at least 15 – 20 percent onsite, handling communications with users, the rest of the project team and the offshore programmers. • It is their responsibility to schedule testing and make sure specifications are clear – not the customers • The work should be shoulder-to-shoulder with their clients, rather than phone-to-phone or eyes shut. The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 4 of Edward Jones or any other organization.
  5. 5. version 3 2 Team Structure – Outsourced offshore Model Typical team structure for a completely outsourced model. Major Risks: • Team Management • Time zone challenge • Communication challenge • Lack of ingenuity • IP protection • Quality of delivery • Stunted Innovation The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 5 of Edward Jones or any other organization.
  6. 6. version 3 2 Team Structure – Co-Sourced offshore Model Typical team structure for a completely outsourced model. Major Risks: • Team Management • Cost structure is higher • Time zone challenge • Communication challenge The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 6 of Edward Jones or any other organization.
  7. 7. version 3 2 Economics – Typical IT Rates (Rack) Experience Level Annual Monthly Annual Junior: Up to two years of Location Experience Rate Rate Shift experience in the Premium corresponding discipline. Advanced $ 6,650 $ 79,800 $ 3,900 Manila Senior $ 5,300 $ 63,600 $ 3,900 Intermediate: Two to four Offsite Intermediate $ 4,250 $ 51,000 $ 3,900 years of experience in the Junior $ 3,400 $ 40,800 $ 3,900 corresponding discipline. Advanced $ 6,200 $ 74,400 $ 3,900 India Senior $ 5,100 $ 61,200 $ 3,900 Senior: Five to eight Offsite Intermediate $ 4,000 $ 48,000 $ 3,900 years of experience in the Junior $ 3,000 $ 36,000 $ 3,900 corresponding discipline. Advanced $ 9,650 $ 115,800 $ 7,800 Toronto Senior $ 8,700 $ 104,400 $ 7,800 Advanced: More than Offsite Intermediate $ 7,400 $ 88,800 $ 7,800 eight years of experience Junior $ 6,300 $ 75,600 $ 7,800 in the corresponding Advanced $ 22,500 $ 270,000 $ 11,700 discipline. US Senior $ 19,750 $ 237,000 $ 11,700 Onsite Intermediate $ 15,100 $ 181,200 $ 11,700 Junior $ 12,000 $ 144,000 $ 11,700 Advanced $ 6,200 $ 74,400 $ 3,900 China Senior $ 5,100 $ 61,200 $ 3,900 Offsite Intermediate $ 4,000 $ 48,000 $ 3,900 Junior $ 3,000 $ 36,000 $ 3,900 Advanced $ 7,800 $ 93,600 $ 3,900 Eastern Europe Senior $ 6,300 $ 75,600 $ 3,900 & Israel Intermediate $ 5,000 $ 60,000 $ 3,900 Offsite Junior $ 4,000 $ 48,000 $ 3,900 The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 7 of Edward Jones or any other organization.
  8. 8. version 3 2 Outsourcing 2.0 Model The significant problems we face cannot be solved at the same level of thinking we were at when we created them. – Albert Einstein • Collaborative Approach • Vested Outsourcing TM • Economy • Accountability • Will it last? The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 8 of Edward Jones or any other organization.
  9. 9. version 3 2 Outsourcing Spend • Global outsourcing market was nearly US$373 billion in total revenue by the end of 2009. A growth of 14.4 percent over 2008 - ZDNet • Gartner survey found that 85 percent of organizations anticipate their spending to increase or stay the same when the economy returns, pointing to a return to growth in the IT services market in 2010. • The Asia-Pacific IT services market will rebound to its growth trajectory to reach US$48.7 billion in 2010 - IDC • Recovery will see a rise of 9.3 percent, over 6.5 percent in 2009. • India's IT services market is set to double over a five-year period, between 2008 to 2013, to hit US$12.8 billion - IDC • CAGR (compound annual growth rate) of 18.6 percent from 2008 to 2013, • US$7.2 billion, will be due to the spend within India. The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 9 of Edward Jones or any other organization.
  10. 10. version 3 2 Outsourcing Predictions - ZDNet 1. Locus of power will move from the enterprise customer to the provider of services. Clouds will increase in importance to enterprises in 2010, and there will be fundamental changes within information, communications and technology (ICT) 2. "Chargeback" will "charge back" onto the CIO agenda. There will be more emphasis on the need to justify the "business value" of IT infrastructure demands. 3. Services "productization" to move up the value chain. Service providers will look to adopt a template-based models. 4. System integration 3.0: New models = New services. Adoption of cloud solutions, hosted delivery models and data center transformation will drive the need for a new system integration engagement model. 5. Emergence of Intelligent X: The services opportunity. e-governance initiatives, environment sustainability, carbon footprint and intelligent infrastructure implementations will be the next big wave for public-private investment in 2010 and beyond. 6. Business process outsourcing (BPO) versus knowledge process outsourcing (KPO). KPO will be retained by the parent as organizations continue to be wary of outsourcing intellectual property. 7. Business analytics and pricing innovation will collide in the KPO market. Analytics will be incorporated into broader KPO engagements to lower costs, which will include a significantly higher proportion of business outcomes-based type of model. 8. "Mobius strip" of business continuity will enter the boardroom. Business continuity and disaster recovery will become an integral part of the business strategy planning. 9. Connectivity and convergence: Growth in next-generation network services. Flexibility, customization of services, enhanced quality of service and reliability will drive the transformation toward next-generation "all-IP"-based networks. 10. Infrastructure vendors will make the most of the setting Sun.Infrastructure vendors will capitalize on Oracle/Sun decline in the market by building competitive strategies such as channel recruitment and target multi-vendor environments. The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 10 of Edward Jones or any other organization.
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