IM-Outsource.ppt

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IM-Outsource.ppt

  1. 1. HYPER-COMPETITION, GLOBALIZATION RAPID COMMODITIZATION INTERNAL FOCUS SHIFTS TOWARDS AREAS OF UNIQUE COMPETITIVE ADVANTAGE INVESTMENT CYCLE COMPRESSION, MORE KNOWLEDGE-DRIVEN OPERATIONS OUTSIDE SPECIALISTS BROUGHT IN FOR COMPLEMENTARY ACTIVITIES OUTSOURCING: At the Center of a Fundamental Restructuring of Business OUTSOURCING
  2. 2. OUTSOURCING DELIVERS A HIERARCHY OF BENIFITS INNOVATION (3%) CONSERVE CAPITAL (3%) IMPROVE QUALITY (3%) GROW REVENUE (4%) ACCESS TO SKILLS (9%) VARIABLE COST STRUCTURE (12%) IMPROVE FOCUS (17%) REDUCE COSTS (49%) TOP TEN REASONS FOR OUTSOURCING (PERCENT RESPONDENTS) Source: The 2004 Outsourcing World Summit
  3. 3. BUSINESS PROCESS OUTSOURCING MEANS WORKING ACROSS THE ORGANIZATION TO DELIVER VALUE TO CUSTOMERS INFORMATION TECHNOLOGY MANUFACTURING FINANCE CUSTOMER CARE DEPARTMENTS
  4. 4. Value Chain of a Service Company Market Research & Analysis R&D Prototype Test Acquire Capital Goods & Tech Acquire Materials & supplies Human- Resource Acquisition & Development Deliver Services To Customer Marketing, Sales, Customer Relationship Management
  5. 5. Activity Type Percent Outsourcing Percent considering outsourcing Food & Cafeteria Services Physical 77% Less than 10% Facility Engineering & maintenance Physical 75% 13% Component Manufacturing Physical 62% 14% Product warehousing Distribution & delivery Physical 62% 10% Mailroom Services Physical 62% 8% Travel Services Specialty 75% Less than 10% Legal Specialty 66% 12% Advertising Specialty 57% 22% Payroll Processing Specialty 53% 26% Document Design & layout Specialty 53% 6% Internet Services Specialty- IT 52% 22% Software development &maintenance Specialty – IT 46% 27% Data center operations Specialty – IT 45% 22% Help desk services Specialty – IT 42% 24% Desktop system Management Specialty – IT 36% 22% Telemarketing Transactional 41% 21% Customer service & Inquiry handling Transactional 36% 18% Customer Order processing Transactional 32% 18% Financial accounting & reporting Transactional 32% 11% Employee benefits Administration Transactional 31% 42% Product research & High-Touch Development High-sensitivity 38% 7% Field Service delivery High-touch High-sensitivity 37% 14% H.R Strategy development High-touch High-sensitivity 35% 15% Product prototype & test High-touch High-sensitivity 34% 24% Field Sales High-touch High-sensitivity 27% 18%
  6. 6. ACCEPTANCE EASTERN EUROPE MALAYSIA CHINA RUSSIA CANADA MIDDLE/SOUTH AMERICA IRELAND PHILIPPINES INDIA LOW MEDIUM HIGH HIGH MEDIUM LOW INDIA IS THE TOP OFFSHORE DESTINATION – TODAY ATTRACTIVENESS Source: Composite for IT and IT-enabled services, developed from multiple sources, including A.T Kearney, The Capco Institute, ISANI, JDalal Associates
  7. 7. FIVE PRINCIPLES FOR CAPTURING THE VALUE OF GLOBAL OUTSOURCING <ul><li>SOURCING AS STRATEGY </li></ul><ul><li>SEEKING COMPETITIVE ADVANTAGE FROM INTERNAL SOURCES, EXTERNAL SOURCES AND THE </li></ul><ul><li>COMBINATION OF THE TWO. </li></ul><ul><li>EXPANDING THE VALUE MODEL </li></ul><ul><li>GBPO VALUE = ((BUSINESS CASE) X (ACCELERATION + FLEXIBILITY)) INNOVATION </li></ul><ul><li>ZERO-BASED SOURCING </li></ul><ul><li>SOURCING DECISIONS MADE FROM A BASE OF ZERO EVERY PLANNING CYCLE </li></ul><ul><li>MARKET- DRIVEN DECISIONS </li></ul><ul><li>ESTABLISHING BEST SOURCE THROUGH OPEN COMPETITION </li></ul><ul><li>OUTSOURCING AS A MANAGEMENT DISCIPLINE </li></ul><ul><li>INVESTING IN TRAINING, PERSONAL DEVELOPMENT, AND TOOLS AS WOULD FOR ANY VALUED </li></ul><ul><li>MANAGEMENT SKILL </li></ul>

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