Business Transformation Conference 2.0

1. BTCON 02
INDIAN SCHOOL OF BUSINESS TRANSFORMATION (ISB&T) PRESENTS
BUSINESS TRANSFORMATION OUTSOURCING IS THE FUTURE OF OUTSOURCING
3RD
OCTOBOR,2009

2. 2
BTCON02 SESSIONS 1
Session I : 10-00-12-00 p.m : Third generation of
Outsourcing
While in the first generation of outsourcing the companies
have mega deals for instance EDS bagged the $10 bn dollar
xerox contract, in second generation we have smaller deal
sizes after 1990 where IBM took the $4 bn cable & wireless
deal . We are now seeing a new third wave of outsourcing,
where deals are getting smaller and splited to multiple
vendors who are building consortium like Business
Transformation Consortium . In this session we will discuss
about the third generation of outsourcing.

3. 3
Session II : 1-00-3-00 p.m : Challenges and Oppurtunities in
BTO Industry
Business Transformation outsourcing is very different from
traditional outsourcing . Unlike a traditional outsourcing industry, it
works backwards and parties involved first fixed up the strategic
goals, and then only come into service description. The customer
responsibility and involvement is very high in a standard BTO deal .
This brings new challenges and oppurtunities as customer now start
thinking that not every operations, could be successfully outsourced
.Taking that key decision which process should be outsourced, and
which should not be, is a key strategic challenge, which both the
vendor, and the customer has to encounter
BTCON02 SESSION II

4. 4
Session III : 4-00-6-00 p.m : Entrepreneur Roadmap for
BTO Industry
Business Transformation Projects have agreement format which
are less like a standard outsourcing agreement and more like a
consulting agreement . Though there are standard outsourcing
formats which are included but the entrepreneur has to work in a
different form of legal and advisory framework and so a roadmap
of a BTO project is quite different then the standard outsourcing
project.
BTCON 02 : SESSION III

5. Business Transformation Outsourcing is the future of Outsourcing
BTO Industry : Third Generation of Outsourcing
Joydip Chakladar
Management Guru
http://isbtbschool.allindialive.org

6. Traditional Outsourcing vs. BTO
TRADITIONAL
OUTSOURCING
BUSINESS
TRANSFORMATION
OUTSOURCING (BTO)
Modest improvement in
cost, service levels and
support capabilities
BTO brings improvement in
performance , which can
be measured in tangible
gains in share price
,market position and
return on capital and
create strategic value
High scale but narrow scope High scale and Broad scope
Joydip Chakladar
Management Guru
http://isbtbschool.allindialive.org

7. FIRST GENERATION
 MEGA DEALS -In the first generation, one big vendor took home
a mammoth deal. For instance, EDS bagged the $10bn Xerox
contract or IBM-Kodak signed an $8bn IT outsourcing deal
Joydip Chakladar
Management Guru
http://isbtbschool.allindialive.org

8. SECOND GENERATION
 In the second wave, that is, in the 1990s and till recently,
the deal size was still big but smaller than the first
generation. Like the $4-bn IBM deal with Cable &
Wireless.”
Joydip Chakladar
Management Guru

9. THIRD GENERATION
 The third generation deal is typified by the rise of
offshore companies (like TCS, Wipro, Infosys). Deals
are getting smaller and being split among multiple
vendors. Like the $2.2bn ABN Amro outsourcing
deal. That one involved IBM, Accenture, TCS,
Infosys and Patni Computer Systems.
Joydip Chakladar
Management Guru
http://isbtbschool.allindialive.org

10. Business Transformation Outsourcing is the future of Outsourcing
Challenges and Opportunities in BTO industry.
Joydip Chakladar
Management Guru
http://isbtbschool.allindialive.org

11. Bto oppurtunities & challenges
 BTO is a response on recognizing the fact that all
operations cannot be successfully outsourced. Instead the
company , should retain some key process in order to stay
competitive.
 The decision is strategic and critical that which operation
process the company should and what it should outsource.
This is the biggest challenge in BTO project.
Joydip Chakladar
Management Guru

12. Nature of Bto Projects
 Customer retains the Business Unit (IT or HR)
 Engages the vendor to improve the subject business Unit,
by leveraging the knowledge and capabilities of the
vendor.
Joydip Chakladar
Management Guru

13. How does a bto project gets executed
 Phase I :Traditional Off shoring solutions which create
significant savings from labor arbitrage to permit the
investment in the SBU.
 Phase II : A comprehensive review and analysis of the
existing process, procedures and tools used by the SBU.
Following the best practices which should be adopted by the
SBU. This analysis phase can take number of years. It is in
fact the a version of traditional consulting services with
steroids.
 Phase III : In this phase the vendor’s employee work side
by side with the SBU employee to implement the new
process , procedures and tools.

14. Business Transformation Outsourcing is the future of Outsourcing
Entrepreneurs roadmap for tapping the BTO opportunity
Joydip Chakladar
Management Guru

15. Analysis of bto projects from entrepreneurs perspective
 BTO PROJECTS HAVE MORE CUSTOMER RESPONSIBILITY THEN
THE TRADITIONAL OUTSOURCING PROJECTS WHICH MEANS THE
CHANCES OF FAILURES ARE LESS IN A BTO PROJECT.
 THIS STANDS AS AN OPPURTUNITY FOR AN ENTREPRENUER TO
VENTURE IN BTO INDUSTRY
Joydip Chakladar
Management Guru

16. Entrepreneurs roadmap
 BTO PLANNING AND ANALYSIS
 NEGOTIATION FOR A BTO PROJECT
 BTO PROJECT GOVERNANCE
Joydip Chakladar
Management Guru

17. BTO PROJECT PLANNING AND ANALYSIS
 BTO PROJECT AGREEMENTS ARE MORE CLOSER TO A STANDARD
CONSULTING AGREEMENT THEN AN STANDARD OUTSOURCING
AGREEMENT.
 IN A BTO PROJECT THE PARTIES WORKS BACKWARDS AND THEY
FIRST AGREE ON THE STRATEGIC GOALS, AND THEN ONLY COME
AND WORK ON THE DESCRIPTION OF SERVICES, ONCE THEY
HAVE DRAWN THE BASELINE FOR MEASURING THE PROGRESS
ON THE PROJECTS.
 FINALLY IN THE BTO PROJECT THE VENDOR WORK HIMSELF OUT
OF THE PROJECT IN THE BUILD-OPERATE – TRANSFER (BOT)
MODEL.

18. NEGOTIATION ON THE BTO PROJECT
 ESTABLISH WIN-WIN AGREEMENT
 WORK ON THE LONG TERM STRATEGIC GOALS
 BUILD A COLLOBORATIVE RELATIONSHIP.
Joydip Chakladar
Management Guru

19. BTO PROJECT GOVERNANCE
 BTO PROJECT GOVERNANCE IS VERY DIFFERENT THEN
THE TRADITIONAL OUTSOURCING PROJECT .
 ADRESS THE IPR ISSUES
 BUILD AGREEMENT ON LONG TERM GOALS.
 HANDLE AMBIGUITY OF LONG TERM STRATEGIC DEALS
WITH PROPER ADAPTABLE STRUCTURES

20. BTO PROJECT GOVERNANCE
 BTO PROJECT GOVERNANCE IS VERY DIFFERENT THEN
THE TRADITIONAL OUTSOURCING PROJECT .
 ADRESS THE IPR ISSUES
 BUILD AGREEMENT ON LONG TERM GOALS.
 HANDLE AMBIGUITY OF LONG TERM STRATEGIC DEALS
WITH PROPER ADAPTABLE STRUCTURES