New Trends in Outsourcing_Socially responsible outsourcing

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New Trends in Outsourcing_Socially responsible outsourcing

  1. 1. OUTSOURCINGIT OUTSOURCINGAPPLICATION DEVELOPMENTNEW TRENDSSOCIALLY RESPONSIBLE OUTSOURCING
  2. 2. Learning Objectives• At the completion of this session you will be able to: – Understand the impact of outsourcing in the developed and developing economies – Understand the challenges resulting from outsourcing – Understand how the outsourcing industry is addressing these challenges – List some success stories of socially responsible outsourcing Socially Responsible Outsourcing
  3. 3. Topics Index1 What is the impact of Outsourcing? In this session we are going to:2 What challenges have resulted from • Understand the challenges Outsourcing? created by Outsourcing, and how Socially Responsible3 What is Socially Responsible Outsourcing is addressing Outsourcing (SRO)? these challenges4 How does SRO work?5 Some examples of SRO Socially Responsible Outsourcing
  4. 4. Topics Index1 What is the impact of Outsourcing? What challenges have resulted from In this topic we are going to:2 Outsourcing? • Understand the impact of the growth of the outsourcing3 What is Socially Responsible industry Outsourcing (SRO)?4 How does SRO work?5 Some examples of SRO Socially Responsible Outsourcing
  5. 5. What is the size of the market? BPO and IT Outsourcing Market Unrealized Market Potential ($305 billion) Unrealized Current India ($ 26.2 billion) Market Market Others ($18.8 billion)Source: IAOP World Summit 2009 Socially Responsible Outsourcing
  6. 6. Impact of IT & BPO on India• Accounts for 45% of total urban employment generated during 1994-2005• 2.5 million direct jobs have created 5 million additional jobs• CSR contributions of firms towards education and healthcare• New standards set for HR practices and significant progress in Diversity and Inclusion Socially Responsible Outsourcing
  7. 7. The potential of the Outsourcing Industry• The BPO and IT Outsourcing industry has the potential to triple by 2020• Current impact of ITO and BPO is huge, but only confined to urban areas and some smaller cities• Huge potential to extend the model to developing economies beyond India, China, and Philippines Socially Responsible Outsourcing
  8. 8. Topics Index1 What is the impact of Outsourcing? In this topic we are going to:2 What challenges have resulted from Outsourcing? • Look at the social challenges created by the growth of the3 What is Socially Responsible outsourcing industry Outsourcing (SRO)?4 How does SRO work?5 Some examples of SRO Socially Responsible Outsourcing
  9. 9. DiscussionCan you think of some challenges that have resultedfrom Outsourcing? Socially Responsible Outsourcing
  10. 10. Concentration of Outsourcing Locations• The BPO and IT Outsourcing work is concentrated in a few countries and metros• Over 170 million skilled workers in Africa and rural Asia are left out• The benefits of outsourcing are not reaching marginalized regions and disadvantaged populations Socially Responsible Outsourcing
  11. 11. Rural to Urban Migration• Rural to Urban “brain drain”• Severe pressure on Urban infrastructure Socially Responsible Outsourcing
  12. 12. Issues in Developed economies• Some types of jobs have been displaced from developed economies to developing economies, causing a need for re-skilling• Economic stagnation and rising unemployment has compounded the problem• Protectionist voices being raised in the developed economies Socially Responsible Outsourcing
  13. 13. Ethical Issues• Exploitation of workforce in less developed locations• Ethical issues in outsourcing – the limits of outsourcing Socially Responsible Outsourcing
  14. 14. Outsourcing Childbirth – is it ethical? Socially Responsible Outsourcing
  15. 15. Topics Index1 What is the impact of Outsourcing?2 What challenges have resulted from Outsourcing? In this topic we are going to:3 What is Socially Responsible • Understand what Socially Outsourcing (SRO)? Responsible Outsourcing is4 How does SRO work?5 Some examples of SRO Socially Responsible Outsourcing
  16. 16. Socially Responsible OutsourcingSocially Responsible Outsourcing (SRO) is an outsourcing model that yields social benefits in addition to its traditional commercial benefits.For example an SRO firm may:• Be located in a marginalized region• Employ from a disadvantaged population• Contribute to the development of the community Socially Responsible Outsourcing
  17. 17. SRO – Being sensitive to the client country• Redeploy, not displace staff• Invest in education and training• Invest in the community• Being sensitive in dealing with people getting displaced Socially Responsible Outsourcing
  18. 18. Benefiting the Host Country Socially Responsible Outsourcing 18
  19. 19. SRO – Using less developed Regions• Use less developed regions in developed economies – US States like Idaho• Less developed countries like Ghana, Bangladesh, sub-Saharan Africa• Tier-3 and smaller towns in countries like India and China Socially Responsible Outsourcing
  20. 20. Topics Index1 What is the impact of Outsourcing?2 What challenges have resulted from Outsourcing? In this topic we are going to: What is Socially Responsible • Understand how Socially3 Responsible Outsourcing Outsourcing (SRO)? works4 How does SRO work?5 Some examples of SRO Socially Responsible Outsourcing
  21. 21. SRO – taking outsourcing to the villages! Socially Responsible Outsourcing
  22. 22. SRO – How does it work? Small slice of Create more Small firms in $160 B opportunities the poorest services for talented places Industry rural workers Socially Responsible Outsourcing
  23. 23. SRO – How does it work? AFTER: Graduates earning six times SRO: average annual Young people income, pursuing work six hrs/day careers providing services to clients to BEFORE: support their Disadvantaged family and young people education with limited education and opportunities Socially Responsible Outsourcing
  24. 24. Topics Index1 What is the impact of Outsourcing?2 What challenges have resulted from Outsourcing? In this topic we are going to:3 What is Socially Responsible • Look at some real-life Outsourcing (SRO)? examples of how SRO works4 How does SRO work?5 Some examples of SRO Socially Responsible Outsourcing
  25. 25. SRO Case Study – Digital Divide DataLocation: Phnom Penh, Cambodia• Nonprofit Social Venture led by Harvard graduate Jeremy H.• Started in Phnom Penh in 2002 with 25 employees• Form processing, transcription• Education for sex-trafficked women, medical care, scholarships• Currently employs 500+ people at 3x minimum wage• Operationally self-sufficient with revenue from clients Socially Responsible Outsourcing
  26. 26. SRO Case Study – Himalayan TechiesLocation: Kathmandu, Nepal• Social venture led by American Ellie Skeele and Nepali MIT grad Rabi Kamacharya• Started in Kathmandu in 2000 with 3 people to provide jobs for educated but underprivileged Nepalis• Software and web application “I was working in Bangalore before. development; IT consulting services Now I am home, in Nepal, working on better technology and allowed to• Provides training, on-site recreational give my opinion about how things facilities, and direct exposure to clients should be done. I feel like I am respected at HT.” Prakash Gautam, Technical Lead at Himalayan Techies Socially Responsible Outsourcing
  27. 27. SRO Case Study – Drishtee BPOLocation: Saurath Village, Bihar, India• Award-winning social venture led by Satyan Mishra and Kunal Chawla• Started in 2000 to leverage technology in rural poverty alleviation• Types of services: Transcription, online research, survey and form Processing• Distributed rural delivery model reduces risk and taps into skilled rural workers• Provides in-depth training for workers with little prior experience Socially Responsible Outsourcing
  28. 28. DiscussionAll of you have seen the huge gap between the haves andhave-nots in today’s society. Please discuss the questions onthe following slide in light of this session on SRO. Socially Responsible Outsourcing
  29. 29. SRO Discussion Questions1. Do you think SRO is a practical solution to today’s social inequality? Why or why not?2. What challenges do you see in implementing SRO in the less developed regions of your country?3. If implemented widely, do you see some beneficial side-effects of SRO? Socially Responsible Outsourcing
  30. 30. Summing Up…• Outsourcing has created a huge impact in some economies like India. The potential market is much larger• The benefits of outsourcing have so far only been visible in a few countries and only in large cities• Socially Responsible Outsourcing promises to take the benefits of outsourcing to less developed regions, and less privileged populations• SRO also has promise to resolve other difficult problems like urban infrastructure, & scarcity of talent Socially Responsible Outsourcing
  31. 31. References• Socially Responsible Outsourcing from the Ground Up: http://www.iaop.org/firmbuilder/articles/34/187/1845/• Socially Responsible Outsourcing viewpoint: http://www.zensar.com/zensar-media/editorials/538-socially- responsible-outsourcing• Is your outsourcer a sweatshop?: http://www.computerworld.com/s/article/315482/Is_your_o utsourcer_an_IT_sweatshop_ Socially Responsible Outsourcing
  32. 32. Thank You

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