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Outsourcing in various functions and industries
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Outsourcing in various functions and industries



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  • 3. WHAT IS OUTSOURCING??  Outsourcing is the process by which an organization contracts with another individual or company to get some of its work done.  Generally it is non-core aspects of the business that are outsourced.  Main reason for outsourcing is to cut costs while focusing on core business activities.  Quality management and controlling might be a big risk
  • 4. Outsourcing Industry in India  India is a market leader in global outsourcing.  Six of the world's top outsourcing destinations are located in India.  As of 2007-08, Indian outsourcing industry is estimated to be worth nearly $52 billion.  Banking and financial services account for about 40 percent of India's outsourcing business.
  • 5. INDIA A FAVOURED DESTINATION  Availability of qualified manpower  Political stability  Infrastructure  Communication skills  Lower wages  Proven delivery capabilities
  • 6. TYPES OF OUTSOURCING Business Process Outsourcing Knowledge Process Outsourcing Information Technology Outsourcing
  • 7. BUSINESS PROCESS OUTSOURCING  Contracting of the operations and responsibilities of specific business functions to a third-party service provider.  Categorized into back office outsourcing and front office outsourcing  BPO that is contracted outside a company's country is called offshore outsourcing and that to a company's neighbouring (or nearby) country is called nearshore outsourcing.
  • 8. FUNCTIONS UNDER BPO  Professional - accounting, purchasing, information technology support and other specialized services.  Manufacturing - optimizing their bottom line and positively impacting their top line.  Process-specific - specific to a unique process or internal procedure  Operational - Machine maintenance, equipment repair cleaning
  • 9. Functions Examples PROFESSIONAL- BANKING STANDARDCHARTERED has outsourced its Money LaunderingControl to India. MANUFACTURING FORD outsources its component manufacturing to India to run its global operations. PROCESS MICROSOFT in India has outsourced its HR functions to Gurgaon solely.
  • 10. KNOWLEDGE PROCESS OUTSOURCING  KPO or Knowledge Process Outsourcing calls for work that needs higher levels of involvement from the worker.  The worker has to employ advanced levels of research, analytical and technical skills.  KPO industry is less older and mature than the BPO sector.
  • 11. FUNCTIONS UNDER KPO SEGMENT EXAMPLES Legal services Morgan Stanley, Dupont Market research and analytics Bharti Airtel hired Ogilvy Pharma and R&D GlaxoSmithKline hiredTCS Health care services Fortis and Sri Ganga Ram Hospital- Surrogacy Education and training Online Math for overseas
  • 12. INFORMATION TECHNOLOGY OUTSOURCING  An organization uses IT outsourcing for functions ranging from infrastructure to software development, maintenance and support.  A company may outsource all of its data storage needs because it does not want to buy and maintain its own data storage devices. Most large organizations only outsource a portion of any given IT function.
  • 13. "By 2009 the Information Technology and Enterprise Solutions (ITES) market in India alone is likely to reach $142 billion. This estimate contrasts with the current price tag of $532 billion to provide these services in the United States." –McKinsey Study
  • 14. DELL – A study in Call Center
  • 15. Quick Facts  Currently employs 8,000 Indians.  Services outsourced : Customer service Software Development  Added a third, 180,000-square-foot call center just this March, with about 300 new employees to start  Plans to add 2,000 people within the next year to bolster its software development and back-office services.  Expanded call center payrolls.
  • 16. INDIANIZATION Innovation Quality of Work Cost Reduction
  • 17. A WAVE OF COMPLAINTS "I feel sorry for Dell technicians if they don't have that information. They're on the front lines."
  • 18. Consideration to deindianize!??  Language and cultural rifts between disgruntled U.S. customers .  Dell employees fielding calls seemed unwilling to depart from a script.  The biggest challenge for Dell in India was working on the accent.
  • 20. “India represents a great market opportunity for us….business is expanding at a very rapid pace there.” - Michael Dell
  • 21. INDIA-STILL DELL’S FAVOURITE.  Manufacturing not possible in India because for that a large market, good supply base and export-import environment is necessary.  So in order to take the benefit of *Small Indian Callers* , it wants to direct its processes to India.  Thus, investment in the manufacturing base of US leads to a reduction in the man minutes from 28 to 5 now.
  • 22. "The survey of 25 large organizations with a combined $50 billion in outsourcing contracts found that 70% have had negative experiences with outsourcing projects and are now taking a more cautious approach. One in four companies has brought outsourced functions back in-house and nearly half have failed to see the cost savings they anticipated as a result of outsourcing.“ – Deloitte Consulting DELOITTE’S view of DELL’S response…..
  • 23. Bibliography  http://www.sourcingmag.com/content/what_ is_outsourcing.asp  http://www.articlesbase.com/business- opportunities-articles/types-of-outsourcing- services-96100.html  http://www.rbi.org.in/scripts/bs_viewcontent. aspx?Id=2249#T2  http://www.msnbc.msn.com/id/4853511/ns/b usiness-forbes_com/t/dell-moves- outsourced-jobs-back-us-shores/
  • 24. Submitted by –  Mridula Das (4)  Dhruv Khrishnaraj (15)  Ishita Jain (17)  Kshitij Dalmia (19)  Navya Luthra (23)  Pratik Laddha (33)  Shreya Bakliwal (44)