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Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
Is4632 outsourcing strategies (final) (5)
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Is4632 outsourcing strategies (final) (5)

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  • Business Process Off-shoring (BPO)
  • http://www.banktech.com/business-intelligence/229400115 http://www.businessweek.com/magazine/content/06_05/b3969428.htm
  • http://www.banktech.com/business-intelligence/229400115 http://www.businessweek.com/magazine/content/06_05/b3969428.htm
  • http://www.banktech.com/business-intelligence/229400115 http://www.businessweek.com/magazine/content/06_05/b3969428.htm
  • Outsourcing considerations: Why India?
  • Outsourcing considerations: Scale and Quality of the Workforce
  • In the “30 Attack Destination Countries” Outsourcing considerations: Risk Profile & Law and Policies
  • Outsourcing considerations: Opportunities for Banking Industries
  • Outsourcing considerations TCS: Size, Financial strength
  • TCS’ Banking and Financial Service BPO offerings include the following:Securities ProcessingMortgage ProcessingCredit Card ProcessingFund AccountingPayment ProcessingInvestment Banking SupportTCS provides customized solutions to banks and financial institutions by offering a wide range of products, including the following:SecuritiesMutual FundsFund AccountingCredit CardsConsumer AssetsBankingCashTradeWealth Management
  • Transcript

    • 1. 1
      Sourcing Strategies
      Leo Kwok40034280
      Gaargi Sharma51485416
      XING Sang, Shania 51159740
      Tsang Wan Ching, Venice 51466936
      Kwok SiuChun,Vincent 51442023
    • 2. Agenda
      2
      Introduction
      Process outsourced by Citigroup
      Decision making process
      Outsourcing considerations
      Risk involved
      Comparison of expected outsourcing strategies & real situation
      Competitive Advantage brought by outsourcing
      Recommendation
      Conclusion
    • 3. 3
      What is outsourcin ?
      Outsourcing
      The practice of contracting out a business function previously performed in-house to an external provider
    • 4. 4
      Business Process Off-shoring (BPO)
      Subset of outsourcing
      • Involves the contracting of specific business operations/functions to a third party
      Comprised of two methods of outsourcing
      Nearshoring
      Outsourcing to nearby foreign countries
      Offshoring
      Outsourcing to distant foreign countries
    • 5. 5
      Reasons to outsource
      Cost advantages
      Focus on core competencies
      Improve overall efficiency
      Increase customer satisfaction
      Gain competitive advantage
    • 6. 6
      Outsourcing Lifestyle Model
      Building block 1
      Investigate
      Building block 2
      Target
      Building block 9
      Refresh
      Building block 3
      Strategize
      Building block 8
      Manage
      Building block 7
      Transition
      Building block 4
      Design
      Building block 5
      Select
      Building block 6
      Negotiate
    • 7. 7
      Citigroup Inc.
      American multinational financial services company based in New York City.
      Formed from one of the world’s largest mergers in history by combining Citigroup and Travelers Group together on April 7th, 1998.
      Over 200 million accounts spanning 140 countries.
      Primary dealer in US Treasury securities.
      One of the “Big Four Banks”
    • 8. 8
      Citigroup and Tata Consulting Services
      Tata Consulting Agency acquires Citigroup Global Services for $505 million on Oct. 8th, 2011.
      $2.5 billion contract providing outsourcing services, application development, and infrastructure support to Citigroup and its affiliates for the next 9.5 years.
    • 9. 9
      Processes outsourced by Citigroup
    • 10. Processes outsourced by Citigroup
      10
      CGSL services five of Citigroup’s nine product lines in more than 45
      countries:
    • 11. Processes outsourced by Citigroup(Con’t)
      11
    • 12. 12
      Decision making process for outsourcing
    • 13. 13
      The decision making process I
      Why does Citigroup choose to outsource?
      “If you don’t do it, you won’t survive.”
      -Daniel Marovitz,2006
    • 14. 14
      The decision making process II
      Indentify sourcing strategy :
      Offshore outsourcing
      Choose which function to be outsourced:
      BPO Non-core competencies
      Select outsourcing service providers
      -Country
      -Company
    • 15. 15
      The decision making process III
      Outsourcing considerations - Country selection
      Lower labor rates ?
      Culture?
      Gvmt policy?
      Regulation?
      Citi
      Risk involved?
      Sufficient supply of qualified labor?
    • 16. 16
      The decision making process IV
      Service Provider selection & evaluation I
      Does the SP
      Have the ability to fulfill detailed business requirements of Citigroup
      • Tangible resources (e.g. robust IT infrastructure, equipment )
      • 17. Intangible resources (e.g. talent, human resource)
      Have relevant experience in providing the required services
    • 18. 17
      The decision making process V
      Service Provider selection & evaluation II
      Does the SP
      • Have satisfactory performance track record in providing similar services
      • 19. Have financial strength to take the engagement and compliance to requirements
      • 20. Large in size-have a group chunky enough to amortize physical cost
      • 21. Have good reputation and social recognition Goodwill
    • 18
      Outsourcing Considerations
    • 22. 19
      Outsourcing considerations: Why India?
      Mature Outsourcing Market
    • 23. 20
      Outsourcing considerations: Cost
    • 24. 21
      Outsourcing considerations:
      Scale & Quality of the workforce
    • 25. 22
      Outsourcing considerations: Infrastructure
    • 26. 23
      Outsourcing considerations: Risk Profile & Law and Policies
      India counts 0.48% ranked 23rdfor the vulnerability of security attack while China ranks second at 12%.
      The penalties for defiance of laws are high.
      Legal contracts are based on- buyer country, seller country and international legal systems.
      Everyone tries to minimize uncertainty & reduce transaction costs. Lack of confidence makes it difficult for contract setting up.
    • 27. 24
      Outsourcing considerations: Opportunities for banking industries
    • 28. 25
      Outsourcing considerations: Why TCS?
    • 29. 26
      Outsourcing considerations TCS: Size, Financial strength
      A part of the Tata Group
      India’s largest industrial conglomerate, TCS has over 116,000 of the world's best trained IT consultants in 50 countries.
      Financial strength to take the engagement and compliance to requirements
      The company generated consolidated revenues of US $5.7 billion for fiscal year ended 31 March 2008
    • 30. 27
      Outsourcing considerations TCS: Relevant experience
      Involved in Banking and Financial Services BPO for three decades.
      Worked with leading banks and financial institutions like Deutche Bank, Royal Scotland Bank, HSBC Bank, etc.
      Ability to fulfill detailed business requirements of Citigroup in terms of its physical assets (e.g. robust IT infrastructure ) and human resources (e.g. talents pool)
    • 31. 28
      Outsourcing considerations TCS:Company Fame
    • 32. TCS had much of what Master calls ‘the soft infrastructure’ in place—English capabilities, a cultural and business affinity with its Western customers, rule of law,”
      29
    • 33. 30
      Risk involved
    • 34. Risk involved & risk management I
      31
      Loss of control
      Implement and execute procedures to:
      • Ensure that all vendors under its control are performing in accordance with contract and performance expectations
      Inconsistency in
      controlling
      Assure that the controls over outsourced information and transaction processing activities are equivalent to those that would be implemented if the activity were conducted internally
    • 35. 32
      Risk involved & risk management II
      Over-dependence (“over-trust”) on the vendor
      Incomprehensive
      contract
      • Conduct reviews of the service provider
      • 36. Implement multiple checks & balances
      Ensure the contract including Exit Strategy
      (end-to-end process)
    • 37. 33
      Comparison betweenexpectation & real situation
    • 38. Expected sourcing strategies for Citigroup I
      34
    • 39. Expected sourcing strategies for Citigroup II
      35
    • 40. Real situation between Citigroup & TCS
      36
    • 41. Real situation between Citigroup & TCS
      37
      Citigroup was …
      • Able to keep its core competencies & strategic systems
      • 42. Able to maintain long-term relationship with its outsourcer
      • 43. Able to rely on a single vendor: TCS
      • 44. Able to find TCS to offer better service with a lower cost
      • 45. Unable to find TCS to take over its worst IT staffs
    • 38
      Competitive Advantages
    • 46. Competitive Edge brought
      39
    • 47. Summary of Citi’s outsourcing strategy
      40
    • 48. Citigroup’s vendor management
      41
    • 49. 42
      Recommendation
    • 50. Recommendation
      43
      Cost is not the only factor to be considered when outsourcing
      Contract should include the ability to shift the focus towards enhancement and innovation
      Buyer organizations should use a structured, strategic approach to calculate the true costs of outsourcing
      They should include favorable transition clauses in the contract
      Should have vendor management measures
    • 51. 44
      Conclusion
    • 52. Conclusion
      45
      There are internal and external reasons in outsourcing
      A few factors are needed to be considered while considering outsource
      A risk is always involved in outsourcing so a control mechanism is needed
      When doing outsourcing right, it could bring business values to the company
    • 53. 46

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