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Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
Are  Offshore  Players  Ready  to Deliver  on  New  Demands?
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Are Offshore Players Ready to Deliver on New Demands?

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Service Buyers' demands have changed post recession, as a result, they are/will push service providers to deliver very different value. Offshore Providers' current model and efforts are falling short …

Service Buyers' demands have changed post recession, as a result, they are/will push service providers to deliver very different value. Offshore Providers' current model and efforts are falling short of clients needs!

Published in: Business, Economy & Finance
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  • 1. Sudin AptePress MeetBangalore – 29th April, 2011 © 2011 Offshore Insights Research & Solutions Private Limited.
  • 2. What Clients Are Thinking About Offshore Players? Premise AgendaService Buyers’ Internal Demands Characteristics of “smart”Change Post Recession enterpriseAs a result, they are / will pushservice providers to deliver very How it changes the way IT will perform at “smart” enterprisesdifferent valueOffshore providers’ current model How a mid-sized IT servicesand efforts fall short of client needs company prepare and win in the changed scenarioNew agenda for Indian IT emerges Discussions and Q&A © 2011 Offshore Insights Research & Solutions Private Limited.
  • 3. Research Methodology  Surveyed 30 top offshore clients who spend more than $100 Million or more per year in January/Feb time to understand their offshore spend and post recession strategies to tap offshore  Further surveyed another 45 offshore clients to understand shifts in their requirements, and how they perceive some of top Indian providers for delivering changed requirements  Interviewed more than a dozen IT services vendors – Indian and MNCs  Analyzed over 75 interactions clients had with Offshore Insights on this subject © 2011 Offshore Insights Research & Solutions Private Limited.
  • 4. © 2011 Offshore Insights Research & Solutions Private Limited.
  • 5. Firms plan to spend more in 2011 on offshoreHow do you expect your offshore spending in next 12 months? North America (n=46) Europe (n=27) 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Increase more Increase 5%- Decrease 5%- Decrease more than 10% 10% 10% than 10% © 2011 Offshore Insights Research & Solutions Private Limited.N = 76, Source – Offshore Insights
  • 6. © 2011 Offshore Insights Research & Solutions Private Limited.
  • 7. Business and societal factors impact next waveof technology Data flood continues, gets further complex and important Architecture focus shifts from server and app centric to Services Pervasive technologies connect physical and digital worlds Individual rights and abuse issues keep focus on Security and Privacy Cloud computing’s value becomes real Social platforms evolve as new source of business intelligence Firms look at Analytics as basis for differentiation and client service User interface & convenience matters even more © 2011 Offshore Insights Research & Solutions Private Limited.
  • 8. Top Offshore Clients Re-strategize To leap-frog Benefits – Findings from our study  Offshore Insights surveyed 26 top offshore clients.  Clients profile – typically Fortune 500 clients, more than 5 years clients of offshore services, based across NA, Europe and Japan  Survey covered satisfaction level and reasons, and what they will do in coming 24 months  Survey and interviews conducted in Dec 2010/Jan 2011 © 2011 Offshore Insights Research & Solutions Private Limited.
  • 9. Most clients are generally happy with theirexperience so far A] How satisfied are you with your offshore experience? - Overall satisfaction Don’t know/Cant Very unhappy say, 6% Very happy with with what we what we received, 7% received, 12% Fairly or to some extent unhappy, 11% Fairly or to some extent happy, 63% N = 26 Source – Offshore Insights © 2011 Offshore Insights Research & Solutions Private Limited.
  • 10. Clients express satisfaction over offshoring basics B] How satisfied are you with your offshore experience? - basic offshore benefits like saving, process, quality Very unhappy with Don’t know/Cant what we say, 1% received, 6% Very happy with what we Fairly or to some received, 18% extent unhappy, 7% Fairly or to some extent happy, 68% N = 26 Source – Offshore Insights © 2011 Offshore Insights Research & Solutions Private Limited.
  • 11. © 2011 Offshore Insights Research & Solutions Private Limited.
  • 12. Geo-political issues, cultural aspects, and innovation are client pain points C] How satisfied clients are on various offshore characteristics? Satisfied Indifferent Dissatified Geo political issues Account managementGDM - Non-India delivery centersStaffing issues (including attrition) Innovation Pricing transaprency Global culture Process/Quality superiority Saving 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% N = 26 Source – Offshore Insights © 2011 Offshore Insights Research & Solutions Private Limited.
  • 13. © 2011 Offshore Insights Research & Solutions Private Limited.
  • 14. “What” and “How” of offshoring dominatestrategy re-visit goals "What are your top offshore services management initiatives in this offshore revamping?" Other initiatives 6 Restructure vendor portfolio 4Review/revamp offshore strategy 5 Increase offshore projects/work 11 Improve governance process 12 Change the way we work (price… 16 Restructure work portfolio 20N = 38 Negotiate offshore rates 21Source: Forrester Research © 2011 Offshore Insights Research & Solutions Private Limited. N = 26 Source – Offshore Insights 0 5 10 15 20 25
  • 15. © 2011 Offshore Insights Research & Solutions Private Limited.
  • 16. Top shifts on offshore client side (1/2)  Newly created steering committees influence IT strategy  Almost 65% companies have such committees  Committees have influential representation from business leaders, Operations, Finance, and even Strategy group  IT Project approvals and budgeting are linked to actual business, not IT value  Alignment and higher response to business requirements is new mandate  Most CIOs performance is measured on business metrics  Business client needs higher flexibility and agility  Clients prefer incremental solutions, not outright replacements  Deal size becomes small,  Clients look for solutions on top of existing platforms  Easy to adopt/exit and “investment light” solutions are in demand © 2011 Offshore Insights Research & Solutions Private Limited.
  • 17. © 2011 Offshore Insights Research & Solutions Private Limited.
  • 18. … But current relationship formats are notgood enough for new needs  Majority of client engagements are still resource centric  The deliverables and service levels are linked to technology and things which don’t essentially convert into business value  Substantial work coming to offshore is mundane and from IT Ops and support area  Providers have limited capability to transform clients’ key business processes end to end  Relationships are managed junior to middle management levels and hover around rate cards, not looked by many clients as strategic partners © 2011 Offshore Insights Research & Solutions Private Limited.
  • 19. © 2011 Offshore Insights Research & Solutions Private Limited.
  • 20. © 2011 Offshore Insights Research & Solutions Private Limited.
  • 21. Want to know more? Email – shashank@offshoreinsights.com Phone - +91 020 25459851/52 Website: www.offshoreinsights.com Research Garage, 12 Shailesh Society, Ganesh Nagar, Pune – 411 052, INDIA

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