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Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
Gs2010 preview
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Gs2010 preview

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  • 1. TRENDS, TRAPS AND EMERGING OPPORTUNITIES Rethinking Outsourcing Atul Vashistha Chairman & CEO
  • 2. 2 2
  • 3. About Neo Advisory A consulting firm singularly focused on helping organizations Consulting capitalize on Outsourcing and Services Globalization Risk Monitoring Research Since 1999 Silicon Valley • Bangalore • New York • Chicago • Sao Paulo • Monterrey • Manila • Amsterdam • Prague 3
  • 4. TRENDS
  • 5. Q2 Insights   Revenue   Pricing   Spend   Utilization   Talent © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 6. Trend: New Roles Emerging   Integrator   Chief Transformation Officer   Head of Shared Services Altering organization structure to aggregate and buy services •  A business model that centralizes common business services •  Leveraging economies of scale and scope © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 7. Trend: Vehicle for Operational Transformation Source: AMR Research / Global Services Media, 2009 Sample: 127 Enterprises © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 8. Trend: Convergence of ITO/BPO Source: Horses for Sources, 2010 © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 9. Trend: Attractiveness of Rural Sourcing   Cost of doing business in low cost locations rising   Interruptionsin supply   Cost of sourcing   Cost of management   Inflation   Locations like Omaha, Ann Arbor etc. becoming more attractive supplementary centers   Ease of doing business   Productivity enhancements   Managing political risk © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 10. Trend: Relationship Models Evolve   Staff Augmentation to Managed Services   Focus on SLAs and not resources   Increased focus on leading indicators   Benefits accrue to both   Transaction pricing   Performance rewards   Gain sharing   Suppliers want this. Do you know how to manage this? © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 11. Trend: Collaborative Sourcing   Time to Sourcing: 12 weeks or less   Negotiation Process   Non-negotiable term sheet   Solution design   Pricing benchmarks © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 12. Trend: Services Supply Chain: Demand Focus © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 13. Trend: Better Monitoring of Risk Macro-economic Risk Infrastructure Risk COUNTRY Financial Risk Business Environment Risk RISKS Geopolitical Risk Human Resources Risk Industry Risk Legal Risk Financial Risk Infrastructure Risk CITY RISKS Geopolitical Risk Business Environment Risk Industry Risk Human Resources Risk Strategy Risk Legal Risk PROVIDER Financial Risk Client & Service Mix Risk RISKS Service Capability Risk © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 14. TRAPS
  • 15. Trap: All Suppliers Are Created Equal   Asia for scale   Geographic clusters for time zone/special needs   Domain Knowledge vs Processing Skills •  Revenue: $22.33 B •  Revenue: $6 B •  Market Cap: $26 Billion •  Market Cap: $32 B •  Revenue Growth (yoy): -2.1 % •  Revenue Growth (yoy): 6.2% •  Profit Margin%: 6.91% •  Profit Margin%: 16.94% • Total Cash: $4B • Total Cash: $2B © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 16. Trap: Not Investing In The Retained Organization   Strategic Planning   Architects   Business Analysts   Trainers   Program Leaders   Vendor Management   Supply Chain Monitoring   Single Labor Pool   Career Movements   Knowledge Management © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 17. EMERGING OPPORTUNITIES
  • 18. Regional Operations Beyond U.S.A.   Scouting locations and suppliers to Operations service MNC regional operations   Asia Pacific   Europe   South America   J&J, SAP   Colombia © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 19. Driving Innovation: Knowledge Management   Collective Intelligence   Enabling Collaboration   Driving Innovation   Predictive, real time   Leverage best practices   Novartis – Cognizant   UPMC – Accenture - Microsoft © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 20. Vendor Optimization Making Strategic Partners responsible for success New •  Multi-source Expanding scope of Strategic Partners existing partners; Add Scope & negotiating better terms Re-negotiate and pricing Current •  Selecting new partners Incremental New that can deliver results Globalization Portfolio •  Identifying vendor optimization opportunities © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 21. Expansion of Global Operations Institutionalizing an enterprise view for cost reduction and globalization Global Location 1 Global Location 2 Business Unit 1 Business Unit 2   Finding early adopters   Ensuring buy-in from business Finance & Accounting units and globally dispersed Human Resources units   CEO/CFO breaking down silos Procurement Sales & Marketing Expanding globalization footprint Engineering/Product Development •  Globalization continues to be Legal Services one of the most viable cost optimization levers •  Evaluating globalization potential for all common Currently Potential to Retain services Globalized Globalize •  Enabling the early adopters © 2010 Neo Advisory & Atul Vashistha 22 All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 22. Leverage Technology To Better Integrate Partners 23   Learn to manage complex SLAs, outcomes   Convergence of portfolio, program, project, resource and performance management © 2010 Neo Advisory & Atul Vashistha All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited
  • 23. Atul Vashistha Chairman atul@neogroup.com Globalization Wisdom Group atul@neoadvisory.com Neo Group atul@vashistha.com Neo Advisory Best Outsourcing Jobs 4000 Pimlico Dr., 114-108 Pleasanton, CA 94588 www.globalizationwisdom.com

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