1. Offshoring core activitiesA good idea? EOA Belgium Round Table 3: Offshoring Tuesday, September 21, 2010 Chris De Mol, Program Manager Technicolor
2. [Wikipedia]: Offshoring describes the relocation by a company of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. ….. The economic logic is to reduce costs.
3. The economic logic reduce costs Are projects really significant cheaper in offshore mode?
4. The strategic logic focus on the core Put ‘own resources’ on core activities Typically the mentality of offshoring the operational and supporting processes. Offshoring those processes that are not seen as a differentiator compared to competition. Can you offshore core activities?
5. The two questions… The economic logic: => Are projects really significant cheaper in offshore mode? The strategic logic: => Can you offshore core activities?
7. Company X Development of IT solutions Having innovative IT solutions is seen as key differentiator Fast evolving market space Why would you offshore your core IT development process?
8. Reduce costs Are IT projects really significant cheaper in offshore mode? Average experience in “home base” is in a lot of cases 3 to 4 times higher than on the offshore site due to high retention rate (30%- 50% impact on throughput) Lack on business domain knowledge (20% - 40% impact on throughput) Extra overhead due to offshoring (Management, extra documentation, … ; 20%) => Net gain around 30%
9.
10. ROI = Throughput – Operational Expenses Inventory -30% +50%
![[Wikipedia]: Offshoring describes the relocation by a company of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. ….. The economic logic is to reduce costs.](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)