The document is a confidential report from McKinsey & Company on achieving sustainable and inclusive growth through global sourcing of services. It discusses perspectives on the IT/BPO offshore outsourcing industry, how the industry has transformed India, and provides concluding remarks. Key points include: the IT/BPO industry has significant latent demand and adoption is expected to accelerate; India leads with 65% and 46% market shares in IT and BPO respectively; the industry has potential to contribute 12-15% to India's GDP and create over 10 million jobs by 2010; it has improved higher education, employment opportunities, and quality of life in India.
In this brief presentation on 'The Evolution of the IT industry in India and Opportunities for Africa' Sriram Bharatam shares some of the key facts about the evolution of the Indian ICT industry and its growth patterns and key learnings.
The document discusses trends related to the role of the chief information officer (CIO) and information technology (IT) management. It addresses two main functions of the CIO: managing internal IT as well as acting as the CEO of external IT. It also summarizes key IT trends in 2008 such as flat IT spending, higher regulatory standards, and greater demand for IT services. The document provides recommendations for implementing an Office of the CIO and IT governance tools to improve IT strategy alignment, transparency, and return on investment.
IRB Infrastructure Developers Ltd reported higher than expected Q2FY12 results. Revenues grew 50.1% to Rs. 735.88 crore due to increased construction revenues, though margins fell due to higher construction contribution. PAT grew 8.9% to Rs. 110.86 crore due to double-digit interest cost rise and higher taxes. The company maintained its 20% growth guidance for FY12 and expects to bag new projects worth Rs. 4,500 crore in FY12. Toll collections are rising across projects and the order backlog remains strong.
Infotech Enterprises reported modest revenue growth of 2% for the fourth quarter of fiscal year 2010. Net profit increased 35% due to a 130% rise in other income and lower taxes. While revenue from the engineering and manufacturing segment grew 6%, the utilities, telecom, and government segment declined 6%. Looking forward, the company expects strong revenue growth driven by its order pipeline and improving business environment. The analyst maintains a 'Buy' rating with a target price implying 20% upside.
1. SKYWORTH is a large Chinese receiver manufacturer headquartered in Shenzhen that has been expanding consistently.
2. In 2010, SKYWORTH received a large contract from the Argentine government to supply 400,000 ISDB-T receivers, resulting in intense production activity.
3. SKYWORTH expects continued growth in 2011, anticipating doubling sales of over 500,000 receivers in the Middle East region for the year.
Telecom Italia – Domestic Market FY 2011 Preliminary Results and 2012‐14 Plan...Gruppo TIM
Telecom Italia reported preliminary 2011 results and outlined its 2012-2014 plan. Revenues declined 4.8% in 2011 due to tough macroeconomic conditions and regulatory changes. However, EBITDA declined only 3.9% due to strong cash generation. In fixed business, line losses improved compared to prior years. Broadband customer base grew despite lower market growth and price competition. The presentation outlined plans to further monetize the fixed access network and add value to broadband, as well as focus on costs and capex allocation.
Reliance Communication's quarterly performance failed to meet expectations, with wireless revenue growing only 1.7% compared to the industry average. While the company surpassed 100 million subscribers, its broadband and global business segments saw declines. Profits grew 10.1% due to higher interest earned, but margins fell due to higher network and access costs. Going forward, profitability is expected to come under pressure from increased leverage for capex spending and acquiring 3G licenses.
In this brief presentation on 'The Evolution of the IT industry in India and Opportunities for Africa' Sriram Bharatam shares some of the key facts about the evolution of the Indian ICT industry and its growth patterns and key learnings.
The document discusses trends related to the role of the chief information officer (CIO) and information technology (IT) management. It addresses two main functions of the CIO: managing internal IT as well as acting as the CEO of external IT. It also summarizes key IT trends in 2008 such as flat IT spending, higher regulatory standards, and greater demand for IT services. The document provides recommendations for implementing an Office of the CIO and IT governance tools to improve IT strategy alignment, transparency, and return on investment.
IRB Infrastructure Developers Ltd reported higher than expected Q2FY12 results. Revenues grew 50.1% to Rs. 735.88 crore due to increased construction revenues, though margins fell due to higher construction contribution. PAT grew 8.9% to Rs. 110.86 crore due to double-digit interest cost rise and higher taxes. The company maintained its 20% growth guidance for FY12 and expects to bag new projects worth Rs. 4,500 crore in FY12. Toll collections are rising across projects and the order backlog remains strong.
Infotech Enterprises reported modest revenue growth of 2% for the fourth quarter of fiscal year 2010. Net profit increased 35% due to a 130% rise in other income and lower taxes. While revenue from the engineering and manufacturing segment grew 6%, the utilities, telecom, and government segment declined 6%. Looking forward, the company expects strong revenue growth driven by its order pipeline and improving business environment. The analyst maintains a 'Buy' rating with a target price implying 20% upside.
1. SKYWORTH is a large Chinese receiver manufacturer headquartered in Shenzhen that has been expanding consistently.
2. In 2010, SKYWORTH received a large contract from the Argentine government to supply 400,000 ISDB-T receivers, resulting in intense production activity.
3. SKYWORTH expects continued growth in 2011, anticipating doubling sales of over 500,000 receivers in the Middle East region for the year.
Telecom Italia – Domestic Market FY 2011 Preliminary Results and 2012‐14 Plan...Gruppo TIM
Telecom Italia reported preliminary 2011 results and outlined its 2012-2014 plan. Revenues declined 4.8% in 2011 due to tough macroeconomic conditions and regulatory changes. However, EBITDA declined only 3.9% due to strong cash generation. In fixed business, line losses improved compared to prior years. Broadband customer base grew despite lower market growth and price competition. The presentation outlined plans to further monetize the fixed access network and add value to broadband, as well as focus on costs and capex allocation.
Reliance Communication's quarterly performance failed to meet expectations, with wireless revenue growing only 1.7% compared to the industry average. While the company surpassed 100 million subscribers, its broadband and global business segments saw declines. Profits grew 10.1% due to higher interest earned, but margins fell due to higher network and access costs. Going forward, profitability is expected to come under pressure from increased leverage for capex spending and acquiring 3G licenses.
The document discusses factors that companies should consider when deciding where to manufacture products globally. It notes that while wages and costs have increased in rapidly developing economies (RDEs) like China, RDEs still offer significant cost advantages over developed countries due to much lower labor costs. When choosing manufacturing locations, companies need to weigh factors like labor costs, supply chain constraints, productivity differences between locations, and how costs may change over time. RDEs remain competitive for many products, though the best location depends on the specific product and market. A holistic analysis is needed to identify the most globally advantageous production network.
SEO involves optimizing a website to rank organically in search engine results pages at no direct cost but requires significant time and ongoing effort due to changing algorithms. Pay per click allows more control over traffic through paid search ads but has higher ongoing costs from bidding on keywords and requires monitoring to ensure effectiveness. While SEO has potential for higher returns, pay per click provides more immediate testing opportunities and control over traffic. Both approaches have pros and cons for online marketing.
Big Data has Big Implications for Customer Experience ManagementTCELab LLC
This presentation covers the application of Big Data principles in Customer Experience Management. I present data models to help companies integrate, organize and analyze their disparate data sources (e.g., operational, financial, constituency and customer feedback) to improve the customer experience and customer loyalty.
For More, please visit http://www.tcelab.com
The document discusses how world class procurement organizations excel beyond traditional cost-cutting roles. They manage a large percentage of company spending and achieve substantial cost savings compared to industry averages. Key strategies include continuously evaluating opportunities, enhancing supplier relationships, and leveraging technology to improve processes and gain insights. This allows world class procurement teams to reduce costs, improve risk management, and help companies adapt to market changes.
IBM China- Global Sourcing Consultancy- Opportunities and trendsMohammad Adil Ashraff
IBM is considering global sourcing options for its operations in China. The consultancy paper analyzes key factors for outsourcing in China and internationally. It examines IBM China's strengths, weaknesses, opportunities, and threats. The paper recommends that IBM China leverage its position in China by exploiting blockchain technology, design thinking, and systems thinking to differentiate itself and gain competitive advantages in outsourcing. Ultimately, positioning IBM China as an outsourcing provider that can create an ecosystem for other organizations.
Global sourcing involves identifying, selecting, and developing suppliers globally, including outsourcing partners. Common activities outsourced include resource-intensive tasks requiring specialist skills or changing technologies. Outsourcing purchasing is more common where purchasing is non-core, the supplier base is small and proven, and items supplied are non-strategic and low risk/cost. Benefits of outsourcing include reduced costs and staffing needs, increased flexibility, and focus on core business functions, while potential problems include reduced quality control, dependence on few suppliers, and loss of skills/expertise. Implementing outsourcing requires careful planning and management of supplier relationships.
Presentation by Eric Hochstein of Ontario Ministry of International Trade and Investment
Presented at Global Sourcing Council's Conference at Steven's Institute of Technology
160513 Study Sourcing in risk and compliance functionsDr. Marc D. Grüter
This document summarizes insights from a benchmark study on sourcing risk and compliance functions in international financial institutions. Key findings include:
1) Sourcing risk and compliance functions can improve effectiveness and efficiency while reducing costs by up to 30%. It allows banks to focus on differentiators and quickly adapt to regulatory changes.
2) Most banks implement a nearshoring model, with hubs in locations like India and Eastern Europe. Examples of successfully sourced functions include risk modeling and standardized transaction decisions.
3) Success requires a strong business case, transparency on current functions, and ensuring additional risks are managed within risk appetite. Detailed planning is also important to realize benefits while mitigating execution risks.
Sourcing Is Now Resourcing: Providing More Savings Across the OrganizationSAP Ariba
As sourcing and procurement teams have led successful savings projects, companies are now leveraging them to help drive savings in areas beyond what they have done in the past. This session will provide insights into how procurement teams are transforming their business processes to drive sustainable savings.
Score vs. System: How NPS Has Evolved to Power Culture ChangeQualtrics
This document discusses using the Net Promoter System to drive customer-centric culture change within organizations. It provides an overview of how American Express transformed their customer service culture by empowering frontline employees and implementing a closed-loop feedback system focused on Net Promoter Score. The Net Promoter System approach aims to create a flywheel effect where improved employee advocacy leads to improved customer advocacy and vice versa. It discusses key elements like frequent feedback, coaching, team problem-solving sessions, and data-driven process improvements. The document argues that effective leadership, clear goals, employee autonomy, and robust feedback mechanisms are needed to engage employees and maximize cultural impact.
The document discusses global sourcing, which involves identifying the best supplier regardless of location. Global sourcing includes shared services and outsourcing solutions that can be implemented domestically or offshore. Key factors to consider in global sourcing include material costs, transportation costs, inventory costs, taxes and duties, supply performance, and risks. There are also quantitative aspects like logistics and economics, and qualitative aspects such as political, legal, and cultural factors. Risks of global sourcing include distance from suppliers, communication challenges, currency fluctuations, quality issues, and staffing needs.
Global sourcing entails identifying, evaluating, negotiating and configuring supply across multiple geographies to reduce costs, maximize performance and mitigate risks. It requires balancing factors like cost, performance, and risk, which are heightened when sourcing globally due to additional complexities. Supply managers must understand classifications like Harmonized System codes and International Commerce Terms that define responsibilities for cross-border shipping. Indian retail chains are now stepping up global sourcing from locations like China, Malaysia, and Europe to shore up margins and offer lower prices.
The 7 step strategic sourcing framework is a popular model developed by ATKearney consulting to help companies lower costs through strategic procurement. The 7 steps include: 1) developing a category profile through spending and supply market analysis, 2) creating a sourcing strategy, 3) generating a supplier portfolio, 4) selecting an implementation plan such as negotiations or auctions, 5) negotiating and selecting suppliers, 6) implementing agreements, and 7) continuous improvement of the sourcing process. Major companies like P&G, HUL, IBM and Dell have used this framework to achieve cost savings of 10-20%.
Nasscom vision about IT and BPO India-LatamFabio Aguiar
The Indian IT-BPO industry grew 5.5% in FY2010 despite a global economic slowdown. It accounts for 25% of India's exports and 10.5% of services revenues. The industry employs nearly 2.3 million professionals and added 90,000 jobs in FY2010. North America remains the dominant market, accounting for 61% of exports. The banking, financial services, and insurance sector saw significant growth in demand. India continues to be the most cost-effective location for IT-BPO services compared to other global destinations.
This document discusses Cablevision's investigation into using offshore outsourcing for IT projects. It outlines the roadmap Cablevision followed, which included fact finding, socializing the idea internally, developing a strategy, preparing staff, and engaging a vendor. It notes challenges like cultural differences but also potential benefits like cost savings. The key is finding the right projects, doing thorough due diligence on vendors, and managing the relationship actively long-term.
This document provides an overview of Wipro's presentation to investors for April-June 2011. It begins with a safe harbor statement noting uncertainties in forward-looking statements. The agenda includes discussing Wipro's differentiation, track record on performance, overall market opportunity, and strategy to remain differentiated in the future. Under track record, Wipro has grown revenue and net income at a 27% CAGR for the last 7 years. Its IT services business has also grown at a 26% CAGR. The overall market opportunity section notes that the Indian IT-BPO sector is expected to grow at a 13-20% CAGR through 2020. Wipro's current differentiation includes a broad portfolio, strong presence in key markets like
This document provides an overview of Wipro's presentation to investors for April-June 2011. It begins with a safe harbor statement noting uncertainties in forward-looking statements. The agenda includes discussing Wipro's differentiation, track record on performance, overall market opportunity, and strategy to remain differentiated in the future. Under track record, Wipro has grown revenue and net income at a 27% CAGR for the last 7 years. Its IT services business has also grown at a 26% CAGR. The overall market opportunity section notes that the Indian IT-BPO sector is expected to grow at a 13-20% CAGR through 2020. Wipro's current differentiation includes a broad portfolio, strong presence in key markets like
Transnet aims to align its supplier development activities with South Africa's economic objectives through its Corporate Social Development Plan. It will focus on developing local tier 1 and tier 2 suppliers in related industries to increase employment, skills development, and black economic empowerment. By using its sphere of influence over large original equipment manufacturers, Transnet can help direct more spending to local supplier development and job creation. This shared vision between Transnet's objectives and those of the South African government will promote inclusive economic growth.
The document discusses factors that companies should consider when deciding where to manufacture products globally. It notes that while wages and costs have increased in rapidly developing economies (RDEs) like China, RDEs still offer significant cost advantages over developed countries due to much lower labor costs. When choosing manufacturing locations, companies need to weigh factors like labor costs, supply chain constraints, productivity differences between locations, and how costs may change over time. RDEs remain competitive for many products, though the best location depends on the specific product and market. A holistic analysis is needed to identify the most globally advantageous production network.
SEO involves optimizing a website to rank organically in search engine results pages at no direct cost but requires significant time and ongoing effort due to changing algorithms. Pay per click allows more control over traffic through paid search ads but has higher ongoing costs from bidding on keywords and requires monitoring to ensure effectiveness. While SEO has potential for higher returns, pay per click provides more immediate testing opportunities and control over traffic. Both approaches have pros and cons for online marketing.
Big Data has Big Implications for Customer Experience ManagementTCELab LLC
This presentation covers the application of Big Data principles in Customer Experience Management. I present data models to help companies integrate, organize and analyze their disparate data sources (e.g., operational, financial, constituency and customer feedback) to improve the customer experience and customer loyalty.
For More, please visit http://www.tcelab.com
The document discusses how world class procurement organizations excel beyond traditional cost-cutting roles. They manage a large percentage of company spending and achieve substantial cost savings compared to industry averages. Key strategies include continuously evaluating opportunities, enhancing supplier relationships, and leveraging technology to improve processes and gain insights. This allows world class procurement teams to reduce costs, improve risk management, and help companies adapt to market changes.
IBM China- Global Sourcing Consultancy- Opportunities and trendsMohammad Adil Ashraff
IBM is considering global sourcing options for its operations in China. The consultancy paper analyzes key factors for outsourcing in China and internationally. It examines IBM China's strengths, weaknesses, opportunities, and threats. The paper recommends that IBM China leverage its position in China by exploiting blockchain technology, design thinking, and systems thinking to differentiate itself and gain competitive advantages in outsourcing. Ultimately, positioning IBM China as an outsourcing provider that can create an ecosystem for other organizations.
Global sourcing involves identifying, selecting, and developing suppliers globally, including outsourcing partners. Common activities outsourced include resource-intensive tasks requiring specialist skills or changing technologies. Outsourcing purchasing is more common where purchasing is non-core, the supplier base is small and proven, and items supplied are non-strategic and low risk/cost. Benefits of outsourcing include reduced costs and staffing needs, increased flexibility, and focus on core business functions, while potential problems include reduced quality control, dependence on few suppliers, and loss of skills/expertise. Implementing outsourcing requires careful planning and management of supplier relationships.
Presentation by Eric Hochstein of Ontario Ministry of International Trade and Investment
Presented at Global Sourcing Council's Conference at Steven's Institute of Technology
160513 Study Sourcing in risk and compliance functionsDr. Marc D. Grüter
This document summarizes insights from a benchmark study on sourcing risk and compliance functions in international financial institutions. Key findings include:
1) Sourcing risk and compliance functions can improve effectiveness and efficiency while reducing costs by up to 30%. It allows banks to focus on differentiators and quickly adapt to regulatory changes.
2) Most banks implement a nearshoring model, with hubs in locations like India and Eastern Europe. Examples of successfully sourced functions include risk modeling and standardized transaction decisions.
3) Success requires a strong business case, transparency on current functions, and ensuring additional risks are managed within risk appetite. Detailed planning is also important to realize benefits while mitigating execution risks.
Sourcing Is Now Resourcing: Providing More Savings Across the OrganizationSAP Ariba
As sourcing and procurement teams have led successful savings projects, companies are now leveraging them to help drive savings in areas beyond what they have done in the past. This session will provide insights into how procurement teams are transforming their business processes to drive sustainable savings.
Score vs. System: How NPS Has Evolved to Power Culture ChangeQualtrics
This document discusses using the Net Promoter System to drive customer-centric culture change within organizations. It provides an overview of how American Express transformed their customer service culture by empowering frontline employees and implementing a closed-loop feedback system focused on Net Promoter Score. The Net Promoter System approach aims to create a flywheel effect where improved employee advocacy leads to improved customer advocacy and vice versa. It discusses key elements like frequent feedback, coaching, team problem-solving sessions, and data-driven process improvements. The document argues that effective leadership, clear goals, employee autonomy, and robust feedback mechanisms are needed to engage employees and maximize cultural impact.
The document discusses global sourcing, which involves identifying the best supplier regardless of location. Global sourcing includes shared services and outsourcing solutions that can be implemented domestically or offshore. Key factors to consider in global sourcing include material costs, transportation costs, inventory costs, taxes and duties, supply performance, and risks. There are also quantitative aspects like logistics and economics, and qualitative aspects such as political, legal, and cultural factors. Risks of global sourcing include distance from suppliers, communication challenges, currency fluctuations, quality issues, and staffing needs.
Global sourcing entails identifying, evaluating, negotiating and configuring supply across multiple geographies to reduce costs, maximize performance and mitigate risks. It requires balancing factors like cost, performance, and risk, which are heightened when sourcing globally due to additional complexities. Supply managers must understand classifications like Harmonized System codes and International Commerce Terms that define responsibilities for cross-border shipping. Indian retail chains are now stepping up global sourcing from locations like China, Malaysia, and Europe to shore up margins and offer lower prices.
The 7 step strategic sourcing framework is a popular model developed by ATKearney consulting to help companies lower costs through strategic procurement. The 7 steps include: 1) developing a category profile through spending and supply market analysis, 2) creating a sourcing strategy, 3) generating a supplier portfolio, 4) selecting an implementation plan such as negotiations or auctions, 5) negotiating and selecting suppliers, 6) implementing agreements, and 7) continuous improvement of the sourcing process. Major companies like P&G, HUL, IBM and Dell have used this framework to achieve cost savings of 10-20%.
Nasscom vision about IT and BPO India-LatamFabio Aguiar
The Indian IT-BPO industry grew 5.5% in FY2010 despite a global economic slowdown. It accounts for 25% of India's exports and 10.5% of services revenues. The industry employs nearly 2.3 million professionals and added 90,000 jobs in FY2010. North America remains the dominant market, accounting for 61% of exports. The banking, financial services, and insurance sector saw significant growth in demand. India continues to be the most cost-effective location for IT-BPO services compared to other global destinations.
This document discusses Cablevision's investigation into using offshore outsourcing for IT projects. It outlines the roadmap Cablevision followed, which included fact finding, socializing the idea internally, developing a strategy, preparing staff, and engaging a vendor. It notes challenges like cultural differences but also potential benefits like cost savings. The key is finding the right projects, doing thorough due diligence on vendors, and managing the relationship actively long-term.
This document provides an overview of Wipro's presentation to investors for April-June 2011. It begins with a safe harbor statement noting uncertainties in forward-looking statements. The agenda includes discussing Wipro's differentiation, track record on performance, overall market opportunity, and strategy to remain differentiated in the future. Under track record, Wipro has grown revenue and net income at a 27% CAGR for the last 7 years. Its IT services business has also grown at a 26% CAGR. The overall market opportunity section notes that the Indian IT-BPO sector is expected to grow at a 13-20% CAGR through 2020. Wipro's current differentiation includes a broad portfolio, strong presence in key markets like
This document provides an overview of Wipro's presentation to investors for April-June 2011. It begins with a safe harbor statement noting uncertainties in forward-looking statements. The agenda includes discussing Wipro's differentiation, track record on performance, overall market opportunity, and strategy to remain differentiated in the future. Under track record, Wipro has grown revenue and net income at a 27% CAGR for the last 7 years. Its IT services business has also grown at a 26% CAGR. The overall market opportunity section notes that the Indian IT-BPO sector is expected to grow at a 13-20% CAGR through 2020. Wipro's current differentiation includes a broad portfolio, strong presence in key markets like
Transnet aims to align its supplier development activities with South Africa's economic objectives through its Corporate Social Development Plan. It will focus on developing local tier 1 and tier 2 suppliers in related industries to increase employment, skills development, and black economic empowerment. By using its sphere of influence over large original equipment manufacturers, Transnet can help direct more spending to local supplier development and job creation. This shared vision between Transnet's objectives and those of the South African government will promote inclusive economic growth.
Axon is a UK-based business transformation consultancy specializing in SAP solutions that represents less than 2% of the large £11 billion SAP market. While Axon employs various capabilities to meet client needs, like offshore delivery centers, it can better target buyers' desires for offshoring by standardizing solutions, developing a technology platform, and demonstrating expertise to reduce costs and risks while increasing speed to market. Locations that best suit Axon's needs are those that can deliver qualified resources and proven capabilities for SAP projects.
Trends in Outsourcing & Offshoring in the Financial Services Industry 2008-20...newtonsa1
Financial Services companies continue to face headwinds in the global marketplace. Whilst outsourcing activity has not returned to the levels it enjoyed pre-Credit Crunch we are starting to see signs of strengthening demand across North America, EMEA and Asia-Pacific. The third edition of Elix-IRR’s report on Trends in Outsourcing and Offshoring in the Financial Services Industry examines developments in the market since 2011 and the key deal activity which has taken place. We once again assess the health of outsourcing in Financial Services by geography and by domain as well as applying particular scrutiny to the ever-increasing pressure of global regulation and the role of service management in ensuring that outsourcing contributes to the achievement of strategic goals. And because of our longstanding commitment to Africa we return to the continent with fresh insights to the health of the market there, particularly supplier activity in the region.
Tom Waechter, CEO of JDSU, presented at the RBC Capital Tech Conference on June 10, 2010. JDSU aims to execute as a diversified technology company focused on optical and broadband innovation by enabling customer innovation, diversifying its portfolio and customer base, and focusing on profitability and revenue growth. Key highlights included quarterly revenue of $332.9 million, gross margins of 44.1%, and highest non-December quarter operating margin of 6.6%.
The document discusses the growing Indian economy and its increasing globalization. It notes that India's GDP has grown significantly from 1999 to 2010, with services contributing over 60% to the economy. Exports and imports have also increased substantially. Foreign direct investment in India has risen sharply, and major mergers and acquisitions have involved Indian firms purchasing overseas companies. Overall, the Indian economy has rapidly integrated into the global marketplace in recent decades.
The document discusses the growth of India's IT industry after liberalization in 1991. It highlights that the industry saw significant growth due to factors like increased investments in education that created a large skilled workforce, government policies that encouraged foreign investment and infrastructure like software technology parks, and the Y2K problem that provided opportunities for Indian professionals. Statistics show that IT exports grew from $12.8 billion in 2003-04 to a projected $40 billion in 2007-08, and the industry contributes about 7% to India's GDP. Major IT clusters formed in cities like Bangalore, Hyderabad, Chennai, Delhi and Mumbai due to supportive infrastructure and policies.
More Than Just Buying Well - The Intelligent Way to Defend ProfitsSAP Ariba
The document discusses how commodity price volatility has negatively impacted company profits in recent years. It notes that while companies previously passed on higher commodity costs to consumers, more recently they have absorbed these costs, reducing profits. The document reports on a survey that found commodity price swings eroded company earnings over the past year and are expected to continue doing so. Most companies now see more volatility than in the past, affecting key cost areas like energy, raw materials, and transportation across different regions. Proper sourcing is presented as a way to help manage this volatility.
The Microsoft Certified Systems Engineer (MCSE) certification demonstrates expertise in designing and implementing Windows infrastructure solutions. The Cisco Certified Network Associate (CCNA) certification validates fundamentals of networking including IP addressing and OSI models. Cisco's CCNP certification focuses on advanced routing and switching skills needed for building converged network infrastructure.
IT Offshoring Industry Analysis, April 2007Peter Louis
The document provides an overview of the global IT offshoring industry. It discusses the major players, locations, drivers, risks, and trends in offshoring. The top players capturing 75% of the market in 2006 were the "Big Six" outsourcing firms. India, China, Malaysia, Thailand, and Brazil were the top offshore locations. Cost reduction and access to skilled labor were the primary drivers of offshoring, while operational challenges and lack of internal acceptance posed risks. The industry is expected to continue shifting work to new locations and standardizing offerings in the coming years.
The document discusses Xerox's decision to outsource its information management functions. It provides background on Xerox, including its history and declining financial performance. It describes problems that were identified with Xerox's in-house information management operations through a consulting firm review. The IM 2000 project was launched to address these problems through reengineering and potentially outsourcing some functions. Key drivers for considering outsourcing included changing industry dynamics and an inability to change quickly enough internally. Porter's five forces model is also referenced to discuss the basis for competition and competitive advantage.
Brad T. Sauer, Executive Vice President, Health Carefinance10
This document provides an overview of 3M's Safety, Security and Protection Services business. It discusses the markets served, key growth strategies, new product innovations, and capacity expansion plans. The business aims to become a $10 billion leader in safety, security and protection products across multiple markets and customer groups. Key strategies include driving core growth through new products, pursuing adjacencies/M&A, expanding internationally, and growing special initiatives like tracking/tracing solutions and mining.
Jean Lobey, Executive Vice President, Safety, Security and Protection Servicesfinance10
This document provides an overview of 3M's Safety, Security and Protection Services business. It discusses the markets served, key growth strategies, new product innovations, and capacity expansion plans. The business aims to become a $10 billion leader in safety, security and protection products across multiple markets and customer groups. Key strategies include driving core growth through new products, pursuing adjacencies/M&A, expanding internationally, and growing special initiatives like tracking/tracing solutions and mining.
John Simmins is the Applications Manager for Southern Maryland Electric Cooperative. He has over 15 years of experience in IT and project management, including experience in manufacturing, supply chain management, and the electric utility industry. He holds a B.S. and Ph.D. in engineering.
The document provides an analysis of the impact of COVID-19 on the IT industry and the financial performance of major Indian IT players in the first quarter of 2021. It discusses both the positive and negative impacts of the pandemic on the IT sector. The positive impacts include increased digitization, growth in cloud technology and 5G, and new projects in cloud and digital areas. The negative impacts include a slowdown in the overall economy, cancellation of tech conferences, restrictions on travel and offices, and potential budget cuts by clients. The document also analyzes the financial performance of major Indian IT companies like TCS, Infosys, HCL, Wipro and Tech Mahindra in Q1 2021. It provides details of their revenues,
The document discusses the evolving roles of modern marketers. A full-stack marketer is described as being multi-skilled across marketing disciplines from SEO to design, with practical working knowledge rather than just understanding. They are suited to start-ups where broad skills are needed. A T-shaped marketer has both broad and deep skills in one area, while a Pi-shaped marketer balances creativity with data-driven skills. A growth hacker is focused on scalable growth through unique growth strategies and testing/evolving proven techniques. The future of marketing requires understanding how creativity and analytics combine to increase performance.
USA Election - The 2016 United States elections will be held (for the most part) on Tuesday, November 8, 2016. During this presidential election year, the President of the United States and Vice President will be elected. In addition, elections will be held for all 435 voting-member seats in the United States House of Representatives (as well as all 6 non-voting delegate seats) and 34 of the 100 seats in the United States Senate. Twelve state governorships, two territorial governorships, and numerous other state and local elections will also be contested.
This document discusses wallpaper brands and their business models in India. It provides an overview of the wallpaper market size and dominant players. It then profiles Gloob Decor, Marshalls, and Elementoo brands, describing their product offerings, business models, and pros and cons. Gloob Decor is positioned as an upcoming market leader. Marshalls has a 45% market share but only imports wallpapers. Elementoo primarily deals in Italian wallpapers. Franchise models from Marshalls and Gloob Decor are also summarized with investment requirements and expected returns.
The sanitaryware and bathroom fittings market in India has grown rapidly over the last 5-6 years, with major players doubling production capacities to meet demand. While the organized sector makes up over half the market by value, the unorganized sector poses a threat by offering cheaper products. Housing and institutional construction are the major drivers of growth in the market. The industry is expected to continue growing at a CAGR of 12.5-15% through 2018 due to factors like rising incomes, urbanization, and greater spending on home improvements.
The document provides an overview of the home furnishing industry in India. It discusses that the industry includes a wide range of home furnishing products used to decorate homes. It notes that the industry is currently dominated by the unorganized sector and faces issues like an economic slowdown and hesitant foreign players. It analyzes the industry's competitive forces and lists some of the major players. It also outlines the business model for distributors and dealers in the industry, noting requirements like high sign up amounts, inventory needs, and lack of credit or return policies.
The ceramic tiles market in India is large and growing rapidly. In 2012, the market size was 172 billion INR and is projected to reach 301 billion INR by 2016, growing at a 15% compound annual growth rate. India is the third largest producer of ceramic tiles globally, accounting for over 6% of total global production in 2012. The organized segment makes up about 50% of the Indian market, with the top eight manufacturers comprising over 75% of organized sector sales. Usage of new technologies like nanotechnology and more environmentally friendly eco-tiles is increasing. Designer and 3D tiles are also becoming more popular. Vitrified tiles now represent around half of ceramic tiles sales in India.
The document provides an overview of the furniture industry in India. It notes that the industry has an estimated market size of Rs. 65,000 crores, with 80% falling in the unorganized sector. It produces a wide variety of furniture types including for homes, offices, hotels, and more. The top materials used are wood, metal, and plastic. The industry employs around 500,000 workers but faces challenges from unorganized sectors and low annual per capita spending on furniture. New online retailers are emerging as well to tap the growing market.
The Indian paint industry has been growing at around 15% annually with a current market size of approximately Rs. 21,000 crores. The per capita consumption in India is 1.5kg compared to the global average of 15kg. The industry is segmented into decorative paints used in homes and industrial paints used in automotive, engineering and other industries. The major players in the decorative paints segment are Asian Paints, Kansai Nerolac, Berger Paints, and ICI Paints which account for over 70% of the market. The paint industry distribution process involves manufacturers supplying products to regional warehouses and then to dealer networks. Key factors influencing the industry include rising incomes, urbanization, financing availability and
e-wallet , The future of Cards and MoneyVikram Dahiya
The document discusses e-wallets and near field communication (NFC) technology. E-wallets store digital payment information and have advantages over traditional cards like unlimited lifetime and storage of current balance. NFC allows contactless payment and data transfer between devices in close proximity by using magnetic field induction. NFC is supported on many mobile platforms and enables mobile payment apps like Google Wallet.
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1. CONFIDENTIAL
Achieving Sustainable
and Inclusive Growth
Through Global
Sourcing of Services
Barnik Chitran Maitra
McKinsey and Company
This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution
outside the client organization without prior written approval from McKinsey & Company. This material was used by McKinsey
& Company during an oral presentation; it is not a complete record of the discussion.
2. TOPICS
Perspectives on the IT/BPO
Offshore industry
The transformational role of the
IT/BPO industry
Concluding remarks
1
3. PERSPECTIVES ON THE IT/BPO OFFSHORING OUTSOURCING
INDUSTRY
Significant latent demand for BPO&O; less than 15% of
the $450 billion plus addressable market penetrated yet
Adoption of offshore IT/BPO expected to accelerate given
high client satisfaction, strong business case for
offshoring
While many specialist destinations emerging, India
continues to lead with around 65% and 46% shares in IT
and BPO respectively
2
4. SIGNIFICANT “HEAD-ROOM” FOR FURTHER GROWTH ESTIMATES
1
OF THE OFFSHORE IT/BPO/R&D SERVICES INDUSTRY
Others*
Addressable markets for offshore IT/BPO/R&D India
exports is at least US $450 billion
Global offshore IT & Engg exports, Global BPO exports**,
FY 2008*** FY 2008***
US$ billion US$ billion
~220-250 ~160-190
4-5x 7-8x
55 24
25.5 13
29.5 11
Current size Addressable Current size Addressable
market market
* Includes Philippines, China, Russia, Eastern Europe, Ireland, Mexico
** Includes addressable markets in currently offshoring industries;
*** India revenues indicated refer to estimates for FY2008. Global numbers indicate 2007 year-end estimates
Source: McKinsey Outsourcing & Offshoring practice; McKinsey Global Institute; Gartner 2005 database; IDC; NASSCOM Strategic Review 2008 3
5. SIGNIFICANT INCREASE IN ADOPTION EXPECTED IN
2
OFFSHORE SERVICES-INFRASTRUCTURE IT SERVICES
CIO response to question - What fraction of your infrastructure is offshored?
Per cent of respondents
2006 CIO survey 2007 CIO survey
Today In 3 years Today In 3 years
Per cent of Per cent of Per cent of Per cent of Per cent of Per cent of Per cent of Per cent of
infrastructure respondents infrastructure respondents infrastructure respondents infrastructure respondents
offshored offshored offshored offshored
76-100 0 76-100 0 76-100 2 76-100 10
51-75 1 51-75 7 51-75 10 51-75 3
26-50 11 26-50 13 26-50 15 26-50 23
1-25 17 1-25 19 1-25 37 1-25 29
0 40 0 25 0 5 0 3
Average* 10 Average* 19 Average 27 Average 34
* Estimated Weighted average of budget offshored
Source: McKinsey CIO survey 2006 and 2007; McKinsey Analysis 4
6. BPO AND IT SERVICES INDUSTRY CONTINUES TO DELIVER
2
STRONG PERFORMANCE
CLIENT SATISFACTION LEVELS WITH
Percent
Back office operations Offshore IT operations
85 86 73 81
Application
Basic data development
78 81 70 80
Rules-based Application
data maintenance
85 85 74 83
Package
Basic voice software
2007 2008 implementation 2007 2008
Source: McKinsey P3600 benchmarking 5
7. PERFORMANCE ON BASIC METRICS CONTINUES TO BE
2
STRONG
COMPLIANCE ON CONTRACTUAL OBLIGATIONS
Percent
SLA Compliance Delivery compliance
Proportion of time SLAs are met Proportion of project completed on schedule
94 95 80 83
Application
Basic data
development
91 93 79 84
Rules-based Application
data maintenance
86 88 76 87
Package
software
Basic voice
2007 2008 implementation 2007 2008
Source: McKinsey P3600 benchmarking 6
8. 2 RATIONALE FOR OFFSHORING WILL REMAIN STRONG
US$/FTE/Hour
Other direct costs
Direct people costs
89.0
Key assumptions 6.0
• Offshore salary costs at 84.0
each level increases based 6.0
on historical growth rates
• No changes in delivery
pyramid (ratio between 76.5
developer, analysts, PL, 73.2
PMs) 83.0
• Other costs include all 78.0
physical infrastructure costs
(e.g., facilities, equipment)
• No increase in G&A costs 12.5
10.8
for both India and US based 2.3
2.3
units 8.5 10.2
India based US based India based US based
unit unit unit unit
2008 2010
Source: Watson Wyatt; NASSCOM-Hewitt Compensation Benchmarking; Project360 metrics database for offshore units; team analysis 7
9. LABOR COST ARBITRAGE WILL CONTINUE FOR SEVERAL
2
YEARS, EVEN WITH OFFSHORE INFLATIONARY PRESSURE
Real wage cost for skilled workforce in India vs. US - CAGR
Indexed wage
US India
differential
• Despite wage
• Despite wage
inflation, leading
inflation, leading
Indian BPO
Indian BPO
2005 100 14 86
providers have
providers have
20*% actually lowered
actually lowered
operating costs
operating costs
2010 110 46 65 7 to 11% (2006 -
7 to 11% (2006 -
2007)
2007)
2%
• 5% wage
• 5% wage
2015 122 74 10**% 39 inflation "lock-
inflation "lock-
in" not un-
in" not un-
common in
common in
2020 135 120 11 vendor contracts
vendor contracts
* Assumes aggregate inflation of 20% from 2005-2010 based on local skilled worker wage inflation and historic rupee inflation
*** Assumes future wage inflation of 10% based on Oxford Economics forecast
Source: McKinsey Outsourcing and Offshoring Practice, Oxford Economics 8
10. INDIA HAS INCREASED IT’S SHARE OF THE GLOBAL
3
OFFSHORE BPO INDUSTRY & HAS A 50% OVERALL SHARE
ITES BPO
Share of global offshore industry Share of global offshore industry
Per cent Per cent
100% = US$8.5 bn US$55 bn 100% = US$2.3 bn US$24 bn
Others* 38 46
Others* 61 54
India 62 54
India 39 46
2001 2008 2001 2008
* Includes Philippines, China, Russia, Eastern Europe, Ireland, Mexico
Source: NASSCOM Strategic Review 2008; McKinsey Global Institute 2005; neoIT; press articles 9
11. DRIVEN BY ITS SUPERIOR SUPPLY OF SUITABLE LOW
3
WAGE TALENT
Aggregate suitable* graduate talent pool for offshore IT and BPO industries
15% 100
3% 1,175
4%
4% 232
4% 308
5% 324
355
6% 408
7% 473
13% 586
8,043
13% 1,020
1,084
26%
2,078
18 other Total
Low-wage supply of
India*** Russia China Philippines Turkey** Poland Brazil Thailand** Mexico Indonesia countries suitable
low-wage
talent (28
countries)
* Graduates with skills for direct employment (does not consider willingness and accessibility of talent)
** Number derived via extrapolation
*** As of 2007
Source: HR interviews; country labour and graduation statistics; McKinsey Global Institute 10
12. TOPICS
Perspectives on the IT/BPO
Offshore industry
The transformational role of
the IT/BPO industry
Concluding remarks
11
13. OFFSHORE IT AND BPO INDUSTRIES HAVE THE POTENTIAL TO
TRANSFORM INDIA OVER THE NEXT 10 YEARS
What IT/BPO industry can do for India
Contribution
Economic growth engines to GDP
US$ billion Per cent
Potential size of
India’ offshore IT and 120-180 12-15
12-15
BPO industries
Taiwan’s engineering
and electronics 53 17
17
industry (2004)
Saudi Arabia’s Oil 116 45
45
(2004)
Source: SAMA; EIU Viewswire; CMIE; Goldman Sachs; global Insights; Deutsche Bank; World Bank; Energy Information Administration (EIA) 12
14. THE IT/BPO INDUSTRY IS ON TRACK TO ACHIEVE IT’S MEDIUM
TERM ASPIRATIONS
US$ billion in export revenues IT/BPO industry expected to have significant impact
on India’s economy
IT/BPO exports expected to GDP growth
continue strong growth
Estimated 17% of India’s
17% incremental GDP growth over
60.0 the five year period (2005-
2010)
25.0 Export growth
8x
Over 80% of the growth in
exports between 2005 to 2010
17.2
35.0
5.2
BPO 7.3 Employment creation
1.5 12.0 Estimated 10 million total
IT 5.8 employment by 2010, equaling
FY 2002 FY 2005 FY 2010 E planned employment creation
from all special programs in the
10th plan of Planning
Commission
Source: NASSCOM McKinsey 2005 Report 13
15. OFFSHORE IT AND BPO INDUSTRIES IS A PRIME ESTIMATES
EMPLOYMENT CREATION ENGINE
Net impact on employment in India
Million jobs, 2010 >6.5 >9
>2.8x
2.3
Direct Indirect and Total
employment induced employment
employment generated
Source: Monthly Review of Indian Economy (Centre for Monitoring Indian Economy (CMIE)); National Council of Applied Economic Research (NCAER),
National Sample Survey Organization, McKinsey Global Institute 14
16. UNPARALLELED IMPACT ON INDIA’S ECONOMY: SIGNIFICANT
CAPACITY BUILDING IN HIGHER EDUCATION AND URBAN
EMPLOYMENT GENERATION
Impact on higher education in top 6 states that dominate
technology/ business services exports Employment impact of different growth engines
Incremental No. of institutions Incremental jobs in million created during 1994-2005
exports share added % of total
(1998-2007) (1998-2007) 8.7*
urban jobs
US$ billions # of institutions per Per cent
state
Top 6 states 42-63
3.6-5.5
(Karnataka, ~15 110
AP, NCR, TN,
Engineering Maharashtra)
education 2.5**-4.4** Indirect 30-51
Others
(21 states + ~1 16-18
6 UTs) 6x
1.1 Direct 12
Total urban Technology/
Top 6 states
jobs business
(Karnataka, ~6 500 services
Non- AP, NCR, TN,
engineering Maharashtra) Technology/business services industry
education Others has contributed to 42-63% of incremental
(21 states + ~0.3 90-100 urban jobs between 1994 and 2005
6 UTs) 5x through direct and indirect employment
* Total urban jobs in 1993-94 was 81.8 million and in 2004-05 was 90.5 million
** High multiplier effect; for every direct job created 2.5-4 additional jobs created in indirect employment
Source: Institute of applied manpower research; CRISIL–NASSCOM report Employment and Output Linkages, 2007 15
17. THE IT/BPO INDUSTRY HAS TRANSFORMED INDIA-IMPROVED
QUALITY OF TALENT
Increase capacity of
higher education
system*
Develop a three Improve
pronged approach willingness to
to improve join the offshore
willingness to join
the BPO industry
IT and BPO
Encourage creation industries
of self regulating
associations of 1
private higher
education institutes Pilot and roll-out
6
“industry-owned”
2 integrated skill
development program
Introduce an output- 5
based ranking of 3
colleges to raise 4
performance standards Implement faculty
in the higher quality and coverage
education system improvement
Develop
initiatives through
scalable e-
four specific
learning
programs
programs for
IT/BPO skill
development
Improve suitability of
graduates for IT/BPO jobs
* Not a priority to sustain leadership 16
18. THE IT/BPO INDUSTRY HAS TRANSFORMED INDIA-QUALITY
COMMERCIAL REAL ESTATE DEVELOPMENT
From . . . Fromto. .
... . . . . to
75-80% of total Class A
office space demand in
India is from the IT/BPO
industry
17
19. THE IT/BPO INDUSTRY HAS TRANSFORMED INDIA-WORK
ENVIRONMENT
From . . . Fromto. .
... . . . . to
Improved work environment
with all modern facilities
18
20. THE IT/BPO INDUSTRY HAS TRANSFORMED INDIA-HIGHER
CONSUMPTION WITH RISING DISPOSABLE INCOME
From . . . Fromto. .
... . . . . to
Starting salaries at IT/BPO
units (>US$ 300 per month)
exceeds retiring salaries of
the previous generation
19
21. THE IT/BPO INDUSTRY HAS TRANSFORMED INDIA-CITIZEN
SERVICES
From . . . Fromto . .
... . . . . to
Improved citizen services
(e.g., registrations,
payments etc.) through
e-governance
20
22. THE IT/BPO INDUSTRY HAS TRANSFORMED INDIA-QUALITY
INFRASTRUCTURE
From . . . Fromto. .
... . . . . to
Airports at major cities
(Mumbai, Delhi, Hyderabad,
Bangalore) being
modernized
21
23. TOPICS
Perspectives on the IT/BPO
Offshore industry
The transformational role of the
IT/BPO industry
Concluding remarks
22
24. PERSPECTIVES ON THE IT/BPO OFFSHORING OUTSOURCING
INDUSTRY
We are only at the start, and not at a mature state, of the
offshore industry evolution
The pace, breadth and depth of offshore services is rising
Global demand will exceed near-term suitable talent supply in
every country
It is not “India or” but “India and”
The IT/BPO industry has the potential to transform a nation
Can trigger fundamental changes in basic areas (e.g.
education, infrastructure, capabilities of players)
Powerful engine to drive sustainable and inclusive growth
23