Offshoring and outsourcing best practice

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Offshoring and outsourcing best practice

  1. OFFSHORING IS NOT OUTSOURCING hey clueless managers – stop being lame!!!!! http://www.flickr.com/photos/55984616@N00/
  2. PART ONE OFFSHORING
  3. What is Offshoring?
  4. Let’s divide the world into 3 zones: 1) Americas 2) Europe, Middle-East & Africa 3) Asia Pacific
  5. Offshoring happens when a delivery manager has team members based in more than 1 of those 3 zones
  6. Nearshoring, happens when a delivery manager has team members in more than one location, but within a single zone
  7. EXAMPLE a software development manager is offshoring if she has 4 developers in Zurich and 12 in Mumbai and/or 6 in Weehawken
  8. EXAMPLE An operations manager is nearshoring if he has 6 people in Tokyo & 20 people in Singapore.
  9. why offshore?
  10. REASON ONE Reduce the cost of operations (potentially by far the most important) by location-specific, loaded salary arbitrage
  11. REASON TWO To support our clients or other business units where (or when) they are
  12. REASON THREE Access global talent pools where they exist
  13. what do you need to know to be a good offshoring manager?
  14. managing nearshore & offshore teams requires many of the same skills
  15. unfortunately nearshoring managers often fail to receive training
  16. which is annoying for Singaporeans and Indians supporting managers in Tokyo and Hong Kong who only 'think' they know how to manage a nearshore team
  17. so nearshoring and offshoring managers both need to do some training
  18. Being good at Shoring requires 7 core competencies
  19. SHORING CORE COMPETENCY ONE Cultural Awareness / Sensitivity
  20. SHORING CORE COMPETENCY TWO Using Communications tools effectively / Knowledge Transfer
  21. SHORING CORE COMPETENCY THREE Managing and architecting distributed workload (how do you effectively divvy up work across locations and time)
  22. SHORING CORE COMPETENCY FOUR Matrix Management
  23. SHORING CORE COMPETENCY FIVE Virtual-Team administration & talent management
  24. SHORING CORE COMPETENCY SIX Jurisdictional compliance
  25. SHORING CORE COMPETENCY SEVEN Geo-political macro-economic trend / strategic risk management & site selection (only at leadership level, really)
  26. CAVEAT ALERT You can define Offshore, Nearshore, and Onshore around differences between cultures as opposed to geographical zone. I think geographical zones is more effective in practice though....
  27. PART TWO OUTSOURCING
  28. What is outsourcing?
  29. Outsourcing, happens when you enter into a contractual relationship with a third-party company to deliver a product or process
  30. outsourcing may or may not include offshoring
  31. so a manager in London would be outsourcing if she worked with IBM in London or Infosys in Chennai
  32. Insourcing happens when you enter into a contractual relationship with a subsidiary to deliver a product or process
  33. insourcing also may or may not involve offshoring
  34. Note that many regulators (especially after 'Too Big To Fail') require the same operational controls for Insource as well as Outsource relationships even though Insourcing is through parent/child legal entities. So it is important to deal with them both in any internal curriculum
  35. why outsource?
  36. REASON ONE Acquire specialized skills
  37. REASON TWO Transfer costs and risk to third party who enjoys economies of scope or scale
  38. REASON THREE Transfer out non core-competencies so that we can focus on our core competencies
  39. REASON FOUR Move semi-variable balance sheet costs (salary) to fully-variable costs
  40. REASON FIVE Move very fast
  41. REASON SIX Handle short-term demand peak
  42. REASON SEVEN Reduce costs
  43. what do you need to know if you are managing outsourcing?
  44. being good at sourcing requires 8 core competencies
  45. SOURCING CORE COMPETENCY ONE Service-Level Agreements & Management
  46. SOURCING CORE COMPETENCY TWO Negotiation
  47. SOURCING CORE COMPETENCY THREE Contract Management
  48. SOURCING CORE COMPETENCY FOUR Vendor Discovery & Selection
  49. SOURCING CORE COMPETENCY FIVE Transition Management (in and out) and Knowledge
  50. SOURCING CORE COMPETENCY SIX Invoice Management
  51. SOURCING CORE COMPETENCY SEVEN Supply Chain Management Controls (Supplier Risk Management) Execution
  52. SOURCING CORE COMPETENCY EIGHT Competitive Core Competency Strategy (what do we outsource and what do we keep. Leadership skill mainly)
  53. PART THREE FINAL WORDZ
  54. OK, managers
  55. you are now warned
  56. skill up!
  57. so you can stop shooting yourself in the foot
  58. with immature management practices
  59. Selena Sol asks….. SHARE THIS DECK & FOLLOW ME (please-oh-please-oh-please-oh-please) http://www.slideshare.net/selenasol/presentations stay up to date with my future slideshare posts selena@selenasol.com http://www.linkedin.com/pub/eric-tachibana/0/33/b53
  60. CLICK HERE FOR MORE!!!!

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