WHAT IS OUTSOURCING??
Outsourcing is the process by which an organization
contracts with another individual or company to get some
of its work done.
Generally it is non-core aspects of the business that are
Main reason for outsourcing is to cut costs while focusing
on core business activities.
Quality management and controlling might be a big risk
Outsourcing Industry in
India is a market leader in global outsourcing.
Six of the world's top outsourcing
destinations are located in India.
As of 2007-08, Indian outsourcing industry is
estimated to be worth nearly $52 billion.
Banking and financial services account for about 40
percent of India's outsourcing business.
INDIA A FAVOURED DESTINATION
Availability of qualified manpower
Proven delivery capabilities
TYPES OF OUTSOURCING
BUSINESS PROCESS OUTSOURCING
Contracting of the operations and
responsibilities of specific business functions
to a third-party service provider.
Categorized into back office outsourcing
and front office outsourcing
BPO that is contracted outside a company's
country is called offshore outsourcing and that
to a company's neighbouring (or nearby)
country is called nearshore outsourcing.
FUNCTIONS UNDER BPO
Professional - accounting, purchasing, information
technology support and other specialized services.
Manufacturing - optimizing their bottom line and
positively impacting their top line.
Process-specific - specific to a unique process or
Operational - Machine maintenance, equipment
outsourced its Money
LaunderingControl to India.
FORD outsources its component
manufacturing to India to run its
MICROSOFT in India has
outsourced its HR functions to
KNOWLEDGE PROCESS OUTSOURCING
KPO or Knowledge Process Outsourcing calls
for work that needs higher levels of
involvement from the worker.
The worker has to employ advanced levels of
research, analytical and technical skills.
KPO industry is less older and mature than
the BPO sector.
FUNCTIONS UNDER KPO
Legal services Morgan Stanley, Dupont
Market research and
Bharti Airtel hired Ogilvy
Pharma and R&D GlaxoSmithKline hiredTCS
Health care services Fortis and Sri Ganga Ram
Education and training Online Math for overseas
An organization uses IT outsourcing for functions
ranging from infrastructure to software
development, maintenance and support.
A company may outsource all of its data
storage needs because it does not want to buy
and maintain its own data storage devices. Most
large organizations only outsource a portion of
any given IT function.
"By 2009 the Information Technology and
Enterprise Solutions (ITES) market in India
alone is likely to reach $142 billion. This
estimate contrasts with the current price tag
of $532 billion to provide these services in the
Currently employs 8,000 Indians.
Services outsourced :
Added a third, 180,000-square-foot call center just this
March, with about 300 new employees to start
Plans to add 2,000 people within the next year to bolster its
software development and back-office services.
Expanded call center payrolls.
A WAVE OF COMPLAINTS
"I feel sorry for
Dell technicians if
they don't have
They're on the
Consideration to deindianize!??
Language and cultural rifts between
disgruntled U.S. customers .
Dell employees fielding calls seemed unwilling
to depart from a script.
The biggest challenge for Dell in India was
working on the accent.
“India represents a great market opportunity
for us….business is expanding at a very rapid
- Michael Dell
INDIA-STILL DELL’S FAVOURITE.
Manufacturing not possible in India because for
that a large market, good supply base and
export-import environment is necessary.
So in order to take the benefit of *Small Indian
Callers* , it wants to direct its processes to
Thus, investment in the manufacturing base of
US leads to a reduction in the man minutes
from 28 to 5 now.
"The survey of 25 large organizations with a combined $50 billion in
outsourcing contracts found that 70% have had negative experiences with
outsourcing projects and are now taking a more cautious approach. One in
four companies has brought outsourced functions back in-house and nearly
half have failed to see the cost savings they anticipated as a result of
– Deloitte Consulting
DELOITTE’S view of DELL’S response…..