Outsourcing / Offshoring Strategy for Engineering & IT Services

1. Presentation
Epitude Consultants
‘Epitome of Fortitude’

2.  Experience of more than two decades in the
outsourcing industry
 Team of well experienced advisors with expertise in
respective areas viz. Engineering, Manufacturing, BPO
 Experience of working with various $ 1 B+
organizations globally especially on Outsourcing
 Tailor made services as we know each organization’s
business drivers are different
 Industry sectors served includes Manufacturing,
Construction, Aerospace & Defense, Industrial
Products, Plant Engineering Etc.
Introduction

3. Why ‘Right Sourcing’?
Reach to the Emerging Market – Offset ?
Localisation / Customisation
Time to Market
Cost Effectiveness
Learn Best Practices & be Competitive
Access to NewTechnology
Top Six Factors

4. Outsourcing Statistics
Globally upto 70% Outsourcing deals
have not been successful - In most cases
desired targets are not achieved
More than 50% deals are re-negotiated
within 2-3 years
More than 15% buyers feels they should
not have outsourced at all
This means planning / strategy need to be worked out meticulously

5. Outsourcing Strategy
 Why you want to outsource?
 Who is the owner and the commitment Level?
 What are the lessons learnt so far?
 Do you have plan B?
 Have you evaluated all the options?
 New trends - Skin in the game – Outcome based
Partnership

6. Challenges for the Industry
Governance
Dependability
Technology Upgrade
Time Lines
Alignment with Demand

7. Build a Strategy
USA
Europe / UK
Rest of the
World
• History of Outsourcing
• Tactical relationship
• Risk & Reward
• Long-term Partnership
• Slow & Steady
• Low risk appetite
• Gradually picking up
• No cost advantage
• Lack of resources

8. Solution
 Technology
 People
 Tools
 Capability
 Portfolio
 Operational Parameter
 Investments
 Team and Morale
 Culture
Transform
There is no universal solution, but there are universal problems
Assessment Strategic
Planning
Investment Execution
Not in the order of importance,
sequence nor priority

9. Transformation
New Strategy -
Rolloutin
Phases
New
Plans +
Learning
Assess
Current
Strategy
Global
Trends
Health
Check
ValueAdd

10. Address the Risk
Contract-Legal Security/Privacy
Increased/
Hidden Cost
Diminishing
Returns
Impact on
Employees
Impact on end
Customer
How do we address the above risks ?

11. Outsourced Engg Services
FY 2014 – $ 10.5B
Pure Engineering – 45%
No. Of Companies – 400+
No. Of Engineers – 180K
Cost Savings - $ 22B+
Outsourcing to India
Data Source: Nasscom

12. Outsourcing Exposure

13. Future Approach - Kick Off…
Project
Selection
Governance
Performanc
Matrix
Resource
Audit
Stitch the
broken
workflow

14. Build Centre of Engg Excellence
Ability to deliver differentiation
• Deliver Innovation for disruptive product
ideas
• Gaining advantage in a standardized world
• Productize and adopt new technology in
product road map
• Strong partnership ecosystem for long-term
component supply chain management
• Technology modernization through
investment in continual cutting edge
technology progress
Ability to manage obsolescence
• Ability for products to outlive component
and technology obsolescence
• Cost of replacement; design re-spin and
subsequent field deployment
Challenges Engineering Imperatives
• Incubation center for ideation
• Industrialization of Ideas: Disruptive ideas to
brings engineering excellence to
• Focus to create IPs for industry agreed
standards & frameworks; maximize re-use
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• Localization of products for emerging market
• Decision framework to analyze and decide
on Core-Critical elements of engineering
operations
Ability to optimize investment
• From single or staggered market launch to
concurrent global product launch
• Transformation impact on R&D budgets –
operations optimization; technology focus
Ability to monetize rapidly
• Product launch window is small; missing it
will cause revenue and market share loss
• Need to manage variants & deploy products
targeting for each market segment
• Integrated NPI / product development to
deployment ecosystem
• Modular design approach to build core
product family architecture with ‘plug &
play’ features
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3
4

15.  Engineering Outsourcing Consultancy
 Aadvisory services to large multinationals on outsourcing
strategies
 Effective utilisation of offshore development centre
 Transformational Deals
 Building ‘Centre of Excellence’
 Focussed group for Engineering & R&D Services
 Executing the deal
 Managing the relationship
 Measurement of Effectiveness
 Cultural & Soft Skills
Summary

16. Thank You
Email: Rajesh.Jain@Epitude.com
Cell: +44 7796134401