2. AGENDA
• INTRODUCTION TO OUTSOURCING
• WHAT IS OUTSOURCING ?
• WHY DO COMPANIES OUTSOURCING?
• KEY AREAS OF OUTSOURCING ?
• OUTSOURCING PRO AND CONS ?
• TYPES OF OUTSOURCING
• WHAT CAN BE OUTSOURCED
• WHEN TO OUTSOURCE
• CONCLUSION
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4. WHAT IS OUTSOURCING?
• OUTSOURCING -
• “THE STRATEGIC USE OF OUTSIDE RESOURCES TO PERFORM ACTIVITIES
TRADITIONALLY HANDLED BY INTERNAL STAFF AND RESOURCES” DAVE GRIFFITHS
• WHY OUTSOURCE?
• PROVIDE SERVICES THAT ARE SCALABLE, SECURE, AND EFFICIENT, WHILE
IMPROVING OVERALL SERVICE AND REDUCING COSTS
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5. WHY DO COMPANIES OUTSOURCE?
36%
36%
13%
10%
4%
1%
TOP REASON FOR OUTSOURCING
Reduce Cost
Focus on core
Improve Quality
Increase Speed to market
Conserve Capital
Foster innovation
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6. KEY AREAS OF OUTSOURCING ?
• INFORMATION TECHNOLOGY/IT SOLUTIONS
• CALL CENTERS
• FINANCE & ACCOUNTING OUTSOURCING
• PROCUREMENT OUTSOURCING
• TEXTILES
• MANUFACTURING
• HUMAN RESOURCE MANAGEMENT
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8. ADVANTAGES OF OUTSOURCING
Cost Effective Skilled Expertise
Distribution of risk
Access to world-class
solutions
Time zone difference
Focus on core
competencies
Improving customer
service
Better people
management
Increased productivity and
Efficiency
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9. DISADVANTAGES OF OUTSOURCING
Loss Of Managerial Control Hidden Costs
Bad Publicity and Ill-Will
Linguistic barriers
Threat to Security and
Confidentiality
Quality Problems
Lack of customer focus
lose talent inside within
your company
Tied to the Financial Well-
Being of Another Company
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10. Problems with outsourcing
• LOSS OF CONTROL
• INCREASED CASH OUTFLOW
• CONFIDENTIALITY AND SECURITY
• SELECTION OF SUPPLIER
• TOO DEPENDENT ON SERVICE PROVIDER
• LOSS OF STAFF OR MORAL PROBLEMS
• TIME CONSUMING
• PROVIDER MAY NOT UNDERSTAND BUSINESS ENVIRONMENT
• PROVIDER SLOW TO REACT TO CHANGES IN STRATEGY
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11. 11
Business
processes
Application Development
and Maintenance
IT-infrastructure
ITO: IT Infrastructure Outsourcing
ITS: IT Services, Managed Hosting
Administrative
processes
BPO
AMO
SDO
BPO: Business Process Outsourcing
ASP: Application Service Provider
DBRO: Design, Build, Run & Operate
ADM: Application Develop. & Maintenance
APO: Administrative Process Outsourcing
OUTSOURCING MODELS
12. RECRUITMENT PROCESS OUTSOURCING (RPO)
• RECRUITMENT PROCESS OUTSOURCING IS A FORM
OF BUSINESS PROCESS OUTSOURCING (BPO)
WHERE AN EMPLOYER OUTSOURCES OR TRANSFERS
ALL OR PART OF ITS RECRUITMENT ACTIVITIES TO AN
EXTERNAL SERVICE PROVIDER.
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13. ENGINEERING PROCESS OUTSOURCING( EPO)
• EPO OFFERS GLOBAL CONSULTING AND OUTSOURCING SERVICES PROVIDING END-TO-END
SERVICES IN THE AREAS OF ENGINEERING AND TECHNICAL PROCESS OUTSOURCING.
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14. BUSINESS PROCESS OUTSOURCING (BPO)
• BPO IS A SUBSET OF OUTSOURCING THAT INVOLVES THE CONTRACTING OF
THE OPERATIONS AND RESPONSIBILITIES OF SPECIFIC BUSINESS FUNCTIONS OR
PROCESSES TO A THIRD-PARTY SERVICE PROVIDER.
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15. KNOWLEDGE PROCESS OUTSOURCING (KPO)
• KPO DESCRIBES THE OUTSOURCING OF CORE BUSINESS ACTIVITIES, WHICH OFTEN ARE
COMPETITIVELY IMPORTANT OR FORM AN INTEGRAL PART OF A COMPANY'S VALUE CHAIN.
THEREFORE KPO REQUIRES ADVANCED ANALYTICAL AND TECHNICAL SKILLS AS WELL AS A HIGH
DEGREE OF PROPRIETARY DOMAIN EXPERTISE
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16. LEGAL PROCESS OUTSOURCING (LPO)
• LPO REFERS TO THE PRACTICE OF A LAW FIRM OR CORPORATION OBTAINING LEGAL
SUPPORT SERVICES FROM AN OUTSIDE LAW FIRM OR LEGAL SUPPORT SERVICES COMPANY.
THIS PROCESS HAS BEEN MARKED BY THE PRACTICE OF OUTSOURCING ANY ACTIVITY EXCEPT
THOSE WHERE PERSONAL PRESENCE OR CONTACT IS REQUIRED.
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17. AMO - APPLICATION MANAGEMENT OUTSOURCING
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Break/Fix Support Enhancements Upgrades New Development
Single Application Group of Application Entire Application Portfolio
Services
Application
Application
Outsourcing
Solution based on
a flexible
Arrangement
18. SDO – SERVICE DELIVERY OUTSOURCING
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Services
DataCenters
DesktopMgmt.
&
Mobility
TechnicalSupport
NetworkServices
Security
SupplierMgmt.
Client Operations Management
Messaging & Collaboration
Technical Support
Desktop Management & Mobility
Network Management
Hosting
Sales Support and Mobilization
Security Operations
Delivery
capabilities
Security
End-to-end security services
including firewall management,
intrusion detection, identity
management and security policy
Data Centers
Remote and on-site managed
server hosting
Data centers
Technical Support
- Help desk, desk-side and self-
service support
- Global hubs
Network Services
Managing data and voice networks
Desktop Management and Mobility
PC, laptop, hand-held, distributed
Supplier Management
20. WHEN CAN BE OUTSOURCED?
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Grey
Area
Not
Outsourced
In House
if Possible
Outsource
Competitive
Strategic Non-Strategic
Non-Competitive
PricewaterhouseCoopers Model
21. WHAT CAN BE OUTSOURCED
• SYSTEM INTEGRATION
• DATA NETWORK
• MAINFRAME DATA CENTER
• VOICE NETWORK, INTERNET/INTRANET
• MAINTENANCE/REPAIR
• APPLICATIONS DEVELOPMENT
• E-COMMERCE
• END-USER SUPPORT SYSTEM
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22. OUTCOME
SOME OF THE KEY RESULT AREAS IDENTIFIED
WERE:
• ANNUAL REVENUE SAVINGS CLOSE TO 60
PERCENT
• BETTER PROCESS STANDARDIZATION USING A
DETAILED MANUAL
ON PROCESS MAPS / FLOW CHARTS
• LEVERAGING CORE COMPETENCIES AND
REDUCING ONSHORE LOAD
• BETTER EFFICIENCY AT LOWER DELIVERY COST
FOLLOWING A
CONTINUOUS PROCESS IMPROVEMENT MODEL
• IMPROVED TAT THROUGH IMPLEMENTING A
TAT MONITORING
SYSTEM AND ACCESS PROVISIONING
• MORE FLEXIBILITY TO CHANGING
TECHNOLOGY ENVIRONMENT
• SPECIALIZED AND CONTINUOUS TRAINING
PROGRAMS TO HELP
STAFF STAY CURRENT
• VALUE-ADD IN BUSINESS MODEL THROUGH
CUSTOMER RELATIONSHIP BUILDING
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23. CONCLUSION
• INVEST IN PLANNING
• FOCUS ON TOTAL COST OF OWNERSHIP
• MANAGE COSTS HOLISTICALLY
• USE REAL TIME EXPERTISE TO PROVIDE OFFSHORE KNOWLEDGE AND PROCESS
MANAGEMENT
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