Beach Cherry - Glocalize Your Business


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Beach Cherry - Glocalize Your Business

  1. 1.
  2. 2.
  3. 3. Brief History • IT Outsourcing Contract Signed by Eastman Kodak in 1989. • Chapter 1 of Outsourcing Launched • Early 90’s saw Big Companies… in Big Trouble • Characteristics of Chapter 1 of
  4. 4. Industry Segments • Service industry • Manufacturing industry – Consulting – Production – Legal – Purchasing – Design – Logistics – BPO and etc… – KPO – RPO – Travel and Tourism and etc…
  5. 5. Cost Saving The External Vendor work across corporate boundaries, combine various production volumes of multiple clients, maximize the utility of machines, labor, and capital, thereby finally achieving the cost reduction.  Labor cost  Fixed Cost  Inventory  Capital
  6. 6. Production Outsourcing Advantages Dis- Advantages Increased Flexibility Managerial Control Loss Advantages Vendor Relationship Core Competence Focus & Management Risks Dis- Reduced Risk Advantages Internal Talent Loss Is Production Outsourcing Good?
  7. 7. Termination Negotiations or Renewal Contract Contract Finalization Finalization Supplier Competition Supplier Proposal Transition Transformation Execution of
  8. 8. Purchasing “Purchasing refers to a business or Organization attempting to acquire goods or services to accomplish the goals of the enterprise”. - National Purchasing
  9. 9. Advantage of Outsourcing Reduce Costs, Improve Share Risks & Raw Material Quality and Stop product Purchasing Optimize Duplication
  10. 10. Disadvantages of Outsourcing Government Transportation Loosing Currency Mandated time, cost and Managerial Hidden Cost Value Regulations, custom Control differences Duties & Tariff
  11. 11. Purchasing Are we sourcing the right part of the product? Quality and Total PRODUCT Cost Checking LOCATION PROCESS The Absolute direct cost isn’t always the best thing to do Special Consideration when Outsourcing
  12. 12. Why Outsourcing? When Outsourcing? When a Partner could provide a capability more effectively than the company could
  13. 13. How? • Identifying Core Components of Business • Identifying Economies of Scale • Identifying the implications of No Loss of Quality” due to Long Distance
  14. 14. Purchasing Proprietary nature of process or function Not High Priority proprietary Strong Outsourcing Candidates Medium Priority Data is Outsourcing opportunities proprietary dependent of industry and company dynamics Profit model is Low Priority proprietary Captive Sourcing Candidates Unique to sell Common across Uniqueness of business process or function
  15. 15. Logistics Outsourcing • Definition • Why 3 PL has Grown – Greater Complexity – Shorter Cycle Time – Latest Logistics Technology • Types of 3PL – Standard 3PL provider – Service Developer – Customer
  16. 16. Logistics Outsourcing • When should 3PL be Used? • Disadvantages How to do Logistics Outsourcing  Evaluate Corporate Strategy  Request for Proposal (RFP)  Identify Hidden Costs  Understanding 3PL Providers  Identify company’s Existing  Measurement Resources  Recognize
  17. 17. Service Outsourcing “If you don’t do it, You won’t live to compete” - Vick Gandhi CEO & Founder of
  18. 18. Advantage of Service Outsourcing/ Offshoring  Reduce & Control The Operating cost.  Gain Access to World-Class Capabilities  Free Internal Resources for Other Purposes.  Gain Access to Preempt Resources.  Reduces & Help Transfer Risks.  Handle Concentrate on Core
  19. 19. Disadvantages of Service Outsourcing/ Off-shoring Operational Risks • Risk show up as Slippages on Time, Cost & Quality. Strategic Risks • Risks are rooted in deliberate, opportunistic behavior by service providers or their employees. Composite Risks • Risks are when a client company has outsourced a process for so long that it can no longer implement the process for
  20. 20. Total Cost of Outsourcing Cost Paid to provider (CPP) Additional Buyer Costs (Expenses for a successful TCO = CPP + ABC + PAC Project) – (ABC) Performance Associated Costs (Quality reliability etc.) – (PAC)
  21. 21. 5 Practices for Better Outsourcing  Go offshore for the right reason  Choose Outsourcing Model carefully  Get People On Board  Need to Invest Time and Effort  Treating off-shore partner as
  22. 22. TAKE A BREAK!
  23. 23. Outsourcing Chapter -
  24. 24. CONSTRAINTS WEB 2.0
  25. 25. 9 Critical Chapters – Outsourcing Shifts From To Limited Access Virtually unlimited access to collective wisdom and market intelligence Procurement Relationship management as the Holy Grail Process People as the center of the outsourcing universe Mostly closed IP Mostly open IP/ more sharing Low Price Best value Static Dynamic, Actionable, Interactive Content and IP & Data Hunting Shopping Betting Investing Medication
  26. 26. Effect of World Oil Price on Outsourcing • Constant Rise in World Oil prices since 2004 • Price Pushing Towards $ 150 a barrel • Effects of World Oil on Companies Bottom Lines • Countries Where Outsourcing is
  27. 27. How can BeachCherry help you? • Always Open • 30 different languages. • Have worldwide presence overnight. • Only 1 department of importance – Sales. • Grow your Sales Team – Leave the rest to us. • Over all Operation Cost reduced by 35%
  28. 28. Live Small, Think BiG • Large Corporations (Fortune 5000) outsource many of their departments Tele-Communication Pharmaceutical Finance Information
  29. 29.
  30. 30. THANK