The document discusses outsourcing and provides the following key points:
1. It outlines various business processes and technology services that are commonly outsourced.
2. It describes different outsourcing models including completely outsourced, co-sourced, and onsite/offshore team structures.
3. Global outsourcing spend is projected to grow significantly with the Asia-Pacific market rebounding to reach $48.7 billion in 2010. India's outsourcing market is also expected to double over five years.
Program Meeting: 'Outsourcing' (St. Louis, Sep 2010)
1. version 3 2
Outsourcing
September 20, 2010
The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies
of Edward Jones or any other organization.
2. version 3 2
Typical Corporation
Technology Services
Business Process Services
• Application
• Accounts Payable Business Development/Enhancements
• Accounts Receivable Process
• Administration • Data Warehousing
• Infrastructure Management
• Billing
Technology • Application Technology
• Bookkeeping
Transformation
• Call Center
• Product Engineering
• Claims Processing
• Customer Service • Enterprise Resource Planning
(ERP)
• Due Diligence
• Financial Services • Enterprise Application
Integration (EAI)
• Market Research
• Sales and Marketing
• Strategy and Analysis
• Testing e-Business/Client Services
Employees
• Portals
Employees
• Customer Relationship
• Contract Management Management (CRM)
• Facilities Management Clients • Mobility
• Payroll/Benefits • Web Enabling
• Staffing
The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 2
of Edward Jones or any other organization.
3. version 3 2
Globalization of Services
IT Services
• IT & IT enabled
services outsourcing
• Services USA
portfolio/range
Canada
• Application
Europe
development and
management
• Technology services
• Business process
management services Ireland
• Data Entry Eastern Europe
• Infrastructure South America
Management
Brazil
• Infrastructure Costa Rica
operations
Asia & Pacific
India
China
Israel
Philippines
The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 3
of Edward Jones or any other organization.
4. version 3 2
Outsourcing Models
• The best models are
those that have at least
15 – 20 percent onsite,
handling
communications with
users, the rest of the
project team and the
offshore programmers.
• It is their responsibility to
schedule testing and
make sure specifications
are clear – not the
customers
• The work should be
shoulder-to-shoulder
with their clients, rather
than phone-to-phone or
eyes shut.
The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 4
of Edward Jones or any other organization.
5. version 3 2
Team Structure – Outsourced offshore Model
Typical team structure
for a completely
outsourced model.
Major Risks:
• Team Management
• Time zone
challenge
• Communication
challenge
• Lack of ingenuity
• IP protection
• Quality of delivery
• Stunted Innovation
The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 5
of Edward Jones or any other organization.
6. version 3 2
Team Structure – Co-Sourced offshore Model
Typical team structure
for a completely
outsourced model.
Major Risks:
• Team Management
• Cost structure is
higher
• Time zone
challenge
• Communication
challenge
The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 6
of Edward Jones or any other organization.
7. version 3 2
Economics – Typical IT Rates (Rack)
Experience Level
Annual
Monthly Annual
Junior: Up to two years of Location Experience
Rate Rate
Shift
experience in the Premium
corresponding discipline. Advanced $ 6,650 $ 79,800 $ 3,900
Manila Senior $ 5,300 $ 63,600 $ 3,900
Intermediate: Two to four Offsite Intermediate $ 4,250 $ 51,000 $ 3,900
years of experience in the Junior $ 3,400 $ 40,800 $ 3,900
corresponding discipline. Advanced $ 6,200 $ 74,400 $ 3,900
India Senior $ 5,100 $ 61,200 $ 3,900
Senior: Five to eight Offsite Intermediate $ 4,000 $ 48,000 $ 3,900
years of experience in the Junior $ 3,000 $ 36,000 $ 3,900
corresponding discipline. Advanced $ 9,650 $ 115,800 $ 7,800
Toronto Senior $ 8,700 $ 104,400 $ 7,800
Advanced: More than Offsite Intermediate $ 7,400 $ 88,800 $ 7,800
eight years of experience Junior $ 6,300 $ 75,600 $ 7,800
in the corresponding Advanced $ 22,500 $ 270,000 $ 11,700
discipline. US Senior $ 19,750 $ 237,000 $ 11,700
Onsite Intermediate $ 15,100 $ 181,200 $ 11,700
Junior $ 12,000 $ 144,000 $ 11,700
Advanced $ 6,200 $ 74,400 $ 3,900
China Senior $ 5,100 $ 61,200 $ 3,900
Offsite Intermediate $ 4,000 $ 48,000 $ 3,900
Junior $ 3,000 $ 36,000 $ 3,900
Advanced $ 7,800 $ 93,600 $ 3,900
Eastern Europe
Senior $ 6,300 $ 75,600 $ 3,900
& Israel
Intermediate $ 5,000 $ 60,000 $ 3,900
Offsite
Junior $ 4,000 $ 48,000 $ 3,900
The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 7
of Edward Jones or any other organization.
8. version 3 2
Outsourcing 2.0 Model
The significant problems we face cannot be solved at the same
level of thinking we were at when we created them. – Albert Einstein
• Collaborative Approach
• Vested Outsourcing TM
• Economy
• Accountability
• Will it last?
The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 8
of Edward Jones or any other organization.
9. version 3 2
Outsourcing Spend
• Global outsourcing market was nearly US$373 billion in total revenue by the end
of 2009. A growth of 14.4 percent over 2008 - ZDNet
• Gartner survey found that 85 percent of organizations anticipate their spending to
increase or stay the same when the economy returns, pointing to a return to
growth in the IT services market in 2010.
• The Asia-Pacific IT services market will rebound to its growth trajectory to reach
US$48.7 billion in 2010 - IDC
• Recovery will see a rise of 9.3 percent, over 6.5 percent in 2009.
• India's IT services market is set to double over a five-year period, between 2008 to
2013, to hit US$12.8 billion - IDC
• CAGR (compound annual growth rate) of 18.6 percent from 2008 to 2013,
• US$7.2 billion, will be due to the spend within India.
The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 9
of Edward Jones or any other organization.
10. version 3 2
Outsourcing Predictions - ZDNet
1. Locus of power will move from the enterprise customer to the provider of services. Clouds will increase in
importance to enterprises in 2010, and there will be fundamental changes within information, communications and
technology (ICT)
2. "Chargeback" will "charge back" onto the CIO agenda. There will be more emphasis on the need to justify the
"business value" of IT infrastructure demands.
3. Services "productization" to move up the value chain. Service providers will look to adopt a template-based
models.
4. System integration 3.0: New models = New services. Adoption of cloud solutions, hosted delivery models and data
center transformation will drive the need for a new system integration engagement model.
5. Emergence of Intelligent X: The services opportunity. e-governance initiatives, environment sustainability, carbon
footprint and intelligent infrastructure implementations will be the next big wave for public-private investment in 2010 and
beyond.
6. Business process outsourcing (BPO) versus knowledge process outsourcing (KPO). KPO will be retained by
the parent as organizations continue to be wary of outsourcing intellectual property.
7. Business analytics and pricing innovation will collide in the KPO market. Analytics will be incorporated into
broader KPO engagements to lower costs, which will include a significantly higher proportion of business outcomes-based
type of model.
8. "Mobius strip" of business continuity will enter the boardroom. Business continuity and disaster recovery will
become an integral part of the business strategy planning.
9. Connectivity and convergence: Growth in next-generation network services. Flexibility, customization of
services, enhanced quality of service and reliability will drive the transformation toward next-generation "all-IP"-based
networks.
10. Infrastructure vendors will make the most of the setting Sun.Infrastructure vendors will capitalize on Oracle/Sun
decline in the market by building competitive strategies such as channel recruitment and target multi-vendor environments.
The views expressed in this presentation are my personal views and do not necessarily reflect the views or policies 10
of Edward Jones or any other organization.