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How to Source Digital Initiatives to Drive Revenue Generation

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This webinar shares practical case studies that illustrate how companies have successfully sourced digital initiatives to achieve sustainable revenue gains.

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How to Source Digital Initiatives to Drive Revenue Generation

  1. 1. DIGITAL INITIATIVES & SOURCING DRIVING REVENUE Yariv Drori, VP Strategy, AY Digital Kevin English, Partner & SVP, Neo Group Atul Vashistha, CEO, Neo Group March 10, 2015 NEO INSIGHTS SERIES
  2. 2. © 2015 Neo Group Inc. Proprietary TODAY’S PARTICIPANTS2 PRESENTERS   MODERATOR   Yariv Drori, VP, Strategy at AY Digital, brings 15 years of experience in production and operation management in fast growing high tech companies in the eCommerce and ad tech space. Yariv spearheaded operations efficiencies that relied on globalization trends by leveraging talent pools in APAC and LATAM. Kevin English, Partner & SVP, Neo Group, focuses on helping the firm grow its “Chief Digital Officer” practice by assisting clients across the full spectrum of strategy, sourcing, governance and organizational management services. Kevin has over 30 years of experience in the global services sector. Atul Vashistha, CEO, Neo Group, is recognized globally as an author, speaker and leading expert on globalization, outsourcing and governance. Consulting Magazine named Atul one of the “Top 25 Most Influential Consultants” and “Top 6 IT Powerbrokers”. Atul is passionate about helping corporations create competitive advantage by leveraging global services and sourcing.
  3. 3. © 2015 Neo Group Inc. Proprietary !   Since 1999, we have been helping clients achieve business objectives and address business challenges by leveraging global services and sourcing. !   We have a singular focus on the global services supply chain. !   We achieve outcomes through deep IP, real-time analytics, globally recognized experts, proven methodologies and co-creation with our clients. !   We deliver results through three distinct and linked solutions and services: ABOUT NEO GROUP Our Featured Clients include: ADVISORY SERVICES GOVERNANCE SOLUTIONS SUPPLY MONITORING & ANALYTICS 3
  4. 4. © 2015 Neo Group Inc. Proprietary DIGITAL GROWTH IS STRONG4 Digital Ad Spending Worldwide, 2010-2016 Billions, % change and % of total media ad spending Note: includes advertising that appears on desktop and laptop computers as well as mobile phones and tablets, and excludes all the various formats of advertising on those platforms; excludes SMS, MMS and P2P messaging-based advertising Source: eMarketer, Dec 2012 148475 www.eMarketer.com Digital  ad  spending   %  change   %  share   $72.37   $87.27   $102.83   $118.40   $134.65   $149.18   $163.04   2010            2011        2012                2013          2014    2015              2016   17.5%   20.6%   19.8%   21.7%   23.4%   24.8%   25.9%   15.2%   17.7%   17.8%   15.1%   13.7%   10.8%   9.3%  
  5. 5. © 2015 Neo Group Inc. Proprietary THE SMAC GROWTH IS GLOBAL5 Ignoring the move to mobile could cost U.S. SMBs $1 trillion this year.
  6. 6. © 2015 Neo Group Inc. Proprietary CASE IN POINT: FACEBOOK USERS6
  7. 7. © 2015 Neo Group Inc. Proprietary COMPANIES LAUNCHING DIGITAL PRODUCTS7 Source: TCS Global Trend Survey, July 2014
  8. 8. © 2015 Neo Group Inc. Proprietary Revenue Staff Line Policy Chief Digital Marketing Officer Chief Digital Business Officer Chief Digital Strategy Officer Chief Digital Champion Officer The goal of digital technology is to generate new sources of revenue. •  Digital revenues responsibilities rest in the line organizations w/ memo credit to chief digital officer. •  Digital technology will be incorporated and coordinated across generate/fulfill demand processes. The goal of digital technology is to create new organizational capabilities & customer experiences. •  Establishes a digital strategy at headquarters which defines what it means to ‘be digital’ the direction, resources and relationships. •  The organization creates digital capability through its existing strategy execution process coordinated by a headquarter staff. The goal of digital technology is to generate new sources of revenue. •  Direct responsibility for generating digital revenue rests in a clearly defined and assigned unit, which may be an existing or new unit. •  Direct responsibility for the resources required to meet digital revenue responsibilities. The goal of digital technology is to create new organizational capabilities & customer experiences. •  A distinctive group builds and deploys digital capabilities via disrupting the business from the inside. •  Digitization of the rest of the organization is managed by transformation programs in support of compliance with new digital policies or imperatives. RISE OF THE CHIEF DIGITAL OFFICER8
  9. 9. © 2015 Neo Group Inc. Proprietary CDO AND DIGITAL GOVERNANCE9 Business Intelligence Social Media MobileDigital Media Security E-Commerce Architecture Cost Control The CDO role has become more complex than a traditional CIO role. The CDO is responsible for Digital Governance. The need to balance rapidly changing business needs with even more rapidly changing technologies requires a broad view of both business and technology, and a sourcing plan that support rapid Time to Market implementation needs.
  10. 10. © 2015 Neo Group Inc. Proprietary CDO – TECHNOLOGY AND BUSINESS10 Technology       Business   Security   Extensibility   Global  reach   Peak  load/Balance   Networks         Security   Enterprise  Mgmt.   Apps.  IntegraAon   AnalyAcs   Data CompaAbility   E-­‐Commerce   LocalizaAon   Content  rendering   Mobility HolisAc  Architectural  Approach   Plan,  Design,  Implement  &  Support   Project     Management   TesAng/HosAng/   Roll-­‐out   Resource   Availability     Cost   Management   Cross-­‐funcAonal  Impact   Business   Strategy   MarkeAng   Product   Launch   Customer   Engagement   Revenue   GeneraAon   Social  Media   •  CDO role merges technology and business imperatives •  Need for a holistic digital strategy that that supports rapidly changing business parameters •  Needs include: •  Technology evaluation •  Real-time testing •  Rapid implementation •  Availability of niche or specialized resources
  11. 11. © 2015 Neo Group Inc. Proprietary AND THERE IS TALENT SHORTAGE11
  12. 12. © 2015 Neo Group Inc. ProprietarySource: GfK R&D Senior Management Sales Web Design Business dev Marketing/PR Coders & developers Most in demand skills Most difficult to recruit % that have tried to recruit skill in past 12 months % that have said fairly/very difficult to find User experience TALENT GAP POSING CHALLENGES12
  13. 13. © 2015 Neo Group Inc. Proprietary HOW IS LACK OF TALENT HANDLED?13
  14. 14. © 2015 Neo Group Inc. Proprietary ACCESSING GLOBAL RESOURCES: ANSWER TO THE TALENT GAP 0% 20% 40% 60% 80% 100% Reduce Operating Costs Gain access to new skills Gain access to new technology Transform / re- engineer processes More effective operations at a global level Followingf example of other firms Proven offerings from service providers Economic downturn Enterprise ($3bn+) Mid-Market ($750m-$3bn) Source: AMR Research / Global Services Media, 2009 Sample: 127 Enterprises 14
  15. 15. © 2015 Neo Group Inc. Proprietary CASE IN POINT: INDIA AND TECHNOLOGY15 NUMBER OF INDIAN EMPLOYEES (EST) FOR INDIA’S ‘BIG 5,’ IBM, ACCENTURE 250 000 200 000 150 000 100 000 50 000 0 30%-35% of the global workforce of IBM, Accenture 70%-80% of the global workforce of ‘big 4’ IBM Accenture TCS #1 Cognizant #2 Infy #3 Wipro #4 HCL #5 Source: Macquarie estimates 2013
  16. 16. © 2015 Neo Group Inc. Proprietary HOW DOES ONE LEVERAGE GLOBAL DIGITAL TALENT?
  17. 17. © 2015 Neo Group Inc. Proprietary SOURCING KNOWLEDGE IS KEY17
  18. 18. © 2015 Neo Group Inc. Proprietary Vietnam •  Large workforce •  Large # of universities graduate turnout •  Good IT Skills •  Promising IT labor market Brazil •  High turnout of IT graduates •  Huge Labor pool •  Good people skills and availability •  Quality human capital •  Capable for large operation •  Promising IT labor market Russia •  Excellent programming Skills •  Large universities graduate pool •  Large Tech workforce •  Capable for large operation •  Promising IT labor market Ukraine •  World class programmers •  Smart & hard worker •  Creative workforce Czech Republic •  World class IT skills •  Very small IT graduate •  Very limited labor force •  Shortage of IT labor pool Romania •  Multi-Language Skills •  Highly Skill Worker •  Promising IT O & BPO labor market China •  Large IT workforce •  Improving Project Manager Level Skills •  Good number of colleges & Universities •  Capable for large operation •  Promising labor market India •  Large IT workforce •  World class IT skills •  Excellent IT education system •  Capable for large operation •  KPO, BPO, Call Center skills labor pool •  Amazing IT labor market Uruguay •  Limited IT workforce •  Small Population •  Higher end IT Skills •  Suitable for small operation •  Small IT graduate turnout •  Shortage of IT labor supply Egypt •  Large labor force •  Good education system •  Multi-lingual skills •  Potential labor market Mexico •  Good education system •  Large IT graduate pool •  World class IT skills set •  Excellent bi-lingual skills •  Capable for large operation •  Promising ITO & BPO labor Market Israel •  Highly qualified IT graduate •  Excellent IT Skills •  Suitable for small operation •  Limited IT labor supply Promising labor pool Belarus •  Excellent Software Skills •  Small Labor Force •  Suitable for Niche Operation •  Smart & hard worker Poland •  Highest Universities in EE •  Large IT Workforce •  Largest Labor Pool in EE •  Excellent Education System •  Multi-lingual Skills Set •  Promising ITO & BPO labor market Shortage of labor pool Canada •  Excellent education system •  Productive IT workforce •  Capable for complex project •  Shortage of Tech labor supply United States •  World class IT workforce •  Capable to manage most complex project •  Excellent education system •  Shortage of IT labor supply Argentina •  Large labor pool •  Bi-lingual capacity (English & Spanish) •  Good for large contact center operation •  Stable workforce in the long-run Colombia •  Large graduate pool •  Huge labor force •  Bi-lingual skills •  Promising Labor supply Guatemala , Panama, Honduras, Costa Rica, Peru, Chile •  Highly qualified graduate pool •  Good for higher end services •  Excellent bi-lingual •  Small workforce •  Limited labor supply Philippines •  Large workforce •  Huge graduate pool •  Fluent in English •  Promising labor market Malaysia •  Excellent IT skills •  Good education system •  Limited labor supply KNOW YOUR SUPPLY: CURRENT HOT SPOTS18
  19. 19. © 2015 Neo Group Inc. Proprietary Vietnam •  Embedded Software •  IT Services, R&D •  Software Testing Brazil •  IT Services •  R&D, ADM •  Software Development •  Engineering Services •  Call Center •  Back Office Operation Russia •  Embedded Software •  Engineering Services •  Product Development •  R&D, Systems Integration •  Web Development Ukraine •  Engineering Services, •  IT Services •  Product Development •  Systems Integration Czech Republic •  Infrastructure Management •  Multi-Language Call Center •  IT Services, R&D Romania •  Business Analytics, •  F&A BPO, HRO, •  Financial Analytics, •  IT Services, R&D •  Multilingual Contact Center, Procurement BPO, China •  Engineering Services •  F&A BPO •  IT Services, •  Product Development, •  R&D, Software Testing •  Clinical Trial India •  Software Development •  Product Development •  IT Services •  Engineering Services •  Embedded Software & Services •  Clinical Trial •  Medical Transcriptions Uruguay •  Call Center (Spanish) •  Infrastructure Management •  IT Services •  Product Development Egypt •  Embedded Software •  IT Services •  Medical Transcription Multilingual Call Center •  Product development •  Software Testing Mexico •  Back Office Operations, •  Call Center (English, Spanish), •  Embedded Services, •  Engineering Services, •  IT Services, R&D, •  Software Testing Israel •  Hi-Tech Services •  R&D •  IT Services •  Clinical Trials Belarus •  Embedded Software •  Engineering Services •  IT Services •  Product Development •  R&D, Systems Integration Poland •  Multi-Language Call Center •  Shared Services BPO •  F&A BPO •  IT Application Services Canada •  IT Services •  R&D, ADM •  Medical Transcription •  KPO, BPO Voice and Non- Voice United States •  R&D •  Product Development •  Embedded Software •  Engineering Services •  ADM, IT Services etc Argentina •  Bi-lingual call center services •  F&A BPO •  Digital Services Colombia •  Back Office Operation •  IT Application •  Bi-Language Contact Center Guatemala , Panama, Honduras, Costa Rica, Peru, Chile •  Call center (English & Spanish) •  Back Office Operation •  F&A BPO •  Financial Analytics Philippines •  Call Center (English and some Spanish), •  Contact Center, F&A BPO, •  IT Services, LPO, •  Medical Transcription Malaysia •  Call Center (English, Mandarin), •  F&A BPO, IT Services, •  Technical Helpdesk CURRENT HOT SPOTS: SPECIALIZED FUNCTIONS19
  20. 20. © 2015 Neo Group Inc. Proprietary 80,000 37,180 27,000 26,300 25,638 20,000 18,000 17,000 16,000 15,360 7,000 6,000 6,000 5,000 3,985 3,500 2,569 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 IT Graduate Pool Per Year •  Colleges and universities in Coimbatore (India) produce one of the largest IT graduate pools per year. Has stable IT labor supply in the long-run. •  While colleges & universities in Medellin produce the smallest IT graduate pool per year among the emerging cities indicating limited IT labor supply at present and in the future. KNOW YOUR SUPPLY: TECH GRADUATES20
  21. 21. © 2015 Neo Group Inc. Proprietary 190,000 151,200 70,000 51,200 50,000 45,000 44,237 40,000 35,000 31,149 30,000 30,000 28,000 19,923 14,724 11,000 1,500 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 Non-IT Graduate Pool Per Year •  Most of the colleges and universities in emerging cities have produced large graduate pool per year; indicating stable non-IT labor supply in the long-run. •  However, colleges & universities in Medellin, Brno and Guadalajara produce the smallest graduate pool per year indicating limited non-IT labor supply at present and in the future. KNOW YOUR SUPPLY: NON-IT GRADUATES21
  22. 22. © 2015 Neo Group Inc. Proprietary WHAT DO THESE LOCATIONS ENABLE...22 Good  Supply  of  Digital  Labor   ConsultaFve  LegislaFve  &  Regulatory  Environment   Time  Zone   CompaFbility/   Advantage   Priority  AQenFon  from   Government   PoliFcal  &   Economic   Stability   Tax  &  Other   IncenFves   World  Class   Infrastructure   Favorable   PopulaFon   Trends   CompeFFve  Labor   Costs       Capable  Local   Professional   Advisers   Low  Telecom  Costs     Friendly  Work  Permit   &  ImmigraFon  Laws  
  23. 23. © 2015 Neo Group Inc. Proprietary KNOW WHAT TO SOURCE23 CapabiliAes   Cube    Industry   TransformaAon   Business  Processes   Architecture   Business  Domain  Knowledge   Hot  Skills   Mainstream   Commodity   CORE   CORE  
  24. 24. © 2015 Neo Group Inc. Proprietary DRIVE THE RIGHT INCENTIVES24 !   MulAple  sourcing  models   !   Most  use  the  following  or  a  combinaAon  of  these  for  their  operaAons         Governance  Based  Model   Pricing/SLA  Based  Model   Time  &  Material   Fixed  Price   Managed  Capacity   !   As  name  suggests,  the  model  is  Price  based     !   Guidelines  based  on  pricing  of  the  work  order   !   Based   on   governance   strategies   deployed   for   projects   Client  Managed   Supplier/GIC   Managed   Co  -­‐  Managed   TransacAon  Based   Managed  Services  Engagement  Models  are  typically     a  Hybrid  of  these  
  25. 25. © 2015 Neo Group Inc. Proprietary THE 7 SECRETS OF GLOBAL SOURCING §  Book released in 2010 based on an 8-Year study of corporate best practices in sourcing services and talent globally §  Identified 7 practices (secrets) that “Successful Global” market leaders have in common 25
  26. 26. © 2015 Neo Group Inc. Proprietary FINALLY, THE 7 SECRETS26 Embrace Globalization Welcome It As A Transformation Lever Align Business And Globalization Objectives Take a Lifecycle Approach 1 Assign The Best People Embrace A Continuous Improvement Mind-set Source:    Outsourcing  Wisdom,  Atul  Vashistha   Implement a Strong Governance Model 1   2   3   5   4   7   6  
  27. 27. © 2015 Neo Group Inc. Proprietary THANK YOU27 NEO GROUP GLOBAL HEADQUARTERS 6200 Stoneridge Mall Road, 3rd Floor Pleasanton, CA 94588, USA ASIA-PACIFIC HEADQUARTERS No.13, B-2, 1st floor, C Block Embassy Heights, Magrath Road Bangalore-560 025, India AMSTERDAM, NETHERLANDS AUSTIN, TEXAS BOGOTA, COLOMBIA LONDON, UK NEW YORK, USA ATLANTA, USA SAO PAOLO, BRAZIL SILICON VALLEY, USA SYDNEY, AUSTRALIA ATUL VASHISTHA Chairman & CEO atul@neogroup.com +1.415.839.8050 KEVIN ENGLISH Senior Vice President kevin@neogroup.com +1.703.622.7892 www.NeoGroup.com www.SupplyWisdom.com info@neogroup.com

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