Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting...
-
Upload
sophie-thomas -
Category
Documents
-
view
214 -
download
0
Transcript of Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting...
![Page 1: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/1.jpg)
Global OutsourcingStrategy, Execution and Top 5 Trends
Suresh SharmaSuresh SharmaCEO
JS3 Global ConsultingExecutive Director
India China and America Institute
1549 Clairmont Road, Suite 200Atlanta 30033
www.icainstitute.org
![Page 2: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/2.jpg)
Typical Project … What the end customers want
![Page 3: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/3.jpg)
As Proposed by theOnsite Lead
As Specified in theProduct Request
What the Project Management Interpreted ?
![Page 4: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/4.jpg)
As Designed by theSenior Offshore Designer
As Produced by theOffshore Programming Unit
Partial Understanding of Customer Needs
![Page 5: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/5.jpg)
Offshore Project Final Delivery
As Used by the
Customer
![Page 6: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/6.jpg)
Doing it Right the First Time …
• Strategy• Must Tie it to Sustainable Business Growth Strategy
• Long-term (R&D - Intellectual Capital /$$)• Near-term (Capacity enhancements, New markets)• Short-term (Labor arbitrage, volume fluctuations)
• Factor Compliance, Intellectual Property, Culture, Productivity & Competition
• People … and their global mind-set ?• Cultural Challenges• Project Management skills are vastly different• Operational excellence is key differentiator
• Process … is maturity measured ?• Hand-offs and Touch points• One business language … and consistent environments• Metrics … drives behavior
• Tools
![Page 7: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/7.jpg)
Structural Transformation in Global Business
Unspoken Law of Economics: A labor cost differential of 5-10x means that the
movement of work ‘offshore’ is inevitable
![Page 8: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/8.jpg)
Global 3000 Market Segment is Priority #1 Market Leaders – Software, Financial Services and Retail
Structural Transformation global Outsourcing – Who is Doing It?
Small-BusinessCustomer Revenues < USD 50m
High-End Fortune 500Customer Revenues > USD 5 Bln
Large FirmsCustomer Revenues USD 750 – 5 Bln
Mid-MarketCustomer Revenues USD 50 - 750m
Global 3000Customer Revenues < USD 5 Bln
![Page 9: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/9.jpg)
High
LowLow High
Singapore
Hong Kong Czech Canada
Australia
China
Philippines
Mexico
Ireland
India
Capabilities of Workforce• Wages • Education Qualifications/Capabilities • Quality of work/Work ethic• Attrition Rates• Middle Management Talent
Location Attractiveness• Cultural Compatibility• Infrastructure
– Communication– Basic infrastructure
• Country risks• Time zone attractiveness• Tax Incentives
Brazil
Russia
The Evolving Country Decision -- ROI & Economics Vary Considerably by Process and Location
South AfricaHungary
Source: McKinsey, E-Business Strategies
IT Map
Costa Rica
![Page 10: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/10.jpg)
First Generation Business Models
Source: Offshore Outsourcing: Business Models, ROI and Best Practices
ContractingStaff
Augmentation
PureOutsourcing
Offshore Outsourcing
N/A CosourcingOffshore
Development Centers
Internal DeliverySharedServices
Captive Shared Services
Third PartyVendor
Joint Venture (Collaborative)
Completely Owned
Subsidiary
Rel
atio
nsh
ip S
tru
ctu
re
Onsite Offsite in Same Country
Offshore inForeign Country
Geographic Location
![Page 11: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/11.jpg)
Second Generation Business Models
Source: Offshore Outsourcing: Business Models, ROI and Best Practices
Pure Contract
Outsourcing
Global Delivery Model
Global Shared Services Model
Onsite OffshoreHybrid Model
Multi-sourcing
Model
Joint Venture (Collaborative)
Completely Owned
Subsidiary
Rel
atio
nsh
ip S
tru
ctu
re
OnsiteOnshore
Offsite in Same Country
Offshore inForeign Country
Geographic Location
Build Operate Transfer
![Page 12: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/12.jpg)
Sourcing Evaluation Process
![Page 13: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/13.jpg)
The Offshore “S’ Curve and Tipping Point
Growth Maturity
Life Cycle of Technology Driven Innovation
Birth
Tipping Point
2004 - Offshore adoption is at a tipping point. It is becoming a “must-do” management practice.
ITOBPO
![Page 14: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/14.jpg)
14
Supply-side EconomicsSupply-side Economics
Telecom costs down by 90% in the last 3 years
Increasing Infrastructure reliability
Over 3 million low-cost talented workers
Emergence of a branded vendor community
•0.0
•0.2
•0.4
•0.6
•0.8
•1.0
•1.2
•1.4
•1.6
•1.8
•2.0
•199
2•1
993
•199
4•1
995
•199
6•1
997
•199
8•1
999•2
000
•200
1
•200
2•2
003
Encouraging track record of early movers
Successful track record of IT outsourcing
Early ROI are fueling more investments
Demand-Side Economics Demand-Side Economics
•200
4
$ Billion•3.0
India’s BPO Acceleration … maturity levels
Source: McKinsey, E-Business Strategies
![Page 15: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/15.jpg)
Time
Inside the “S” Curve:The General Model of Innovation – The Vendor Side
Expectations /Investment
Tipping Point
Slope of Profit
Slope of
Despair
Slope of Hype
ConsolidationBoom
Bust
HypePeak
# of
Ven
dors
Offshore vendor space will go through a boom-bust cycle … So its important to pick your partners carefully.
![Page 16: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/16.jpg)
Prediction: Offshore adoption will take longer than most analysts are predicting. Significant Business Process Changes are required!
'93…‘03 ‘04 ‘05 '06 '07 '08 ‘09 ‘10 ‘11 ‘12 ‘13 '14 '15Time
Demand /Visibility
Offshore Hype Curve
Offshore Adoption Curve
InnovatorsEarly Adopter
Early Majority
Late Majority
Laggards
Demand Side Timing and Market Diffusion: Consider the following Pattern …
![Page 17: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/17.jpg)
Ris
e o
f M
ajo
r In
no
vati
on
1990 2005 2020
Business Model Innovation
Business Process
Innovation
Focus on Labor Arbitrage
Focus on Process Integration
Adapted from Utterback-Abernathy Model
Offshore Outsourcing Process Trends: Return on Investment (ROI)
Going forward ROI will be derived less from simple labor arbitrage and more from creative process improvement and integration
![Page 18: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/18.jpg)
India and China Sourcing …
Some Insights from first-hand experience …
• Services Sector• Game is labor arbitrage … it’s the intellectual capital• IT … embedded Systems … and managed services• BPO
• Legal• Financial services• Creative Processes• Medical business processes• HR
• Manufacturing• Hardware• Infrastructure … what does it mean really ?• Some myths and data interesting points
• Culture• Language is a big barrier in China … really ?• Maturity of your own processes plays a big role
• Cost• Dalian Vs. Shanghai • Bangalore Vs. Chennai Vs. Jaipur
![Page 19: Global Outsourcing Strategy, Execution and Top 5 Trends Suresh Sharma CEO JS 3 Global Consulting Executive Director India China and America Institute 1549.](https://reader036.fdocuments.in/reader036/viewer/2022081519/56649de85503460f94ae19fc/html5/thumbnails/19.jpg)
Top 5 Trends … seeing beyond the obvious
• Distributed Outsourcing will be a norm• Competition will come from homes …Future Factory Nodes• Positioning of new cost structure is vital for growth • Ability to globally project manage is essential
• Domain Knowledge goes global• Utilities, Banks, Financial Services, Healthcare, Legal, Entertainment, … Opening Markets and Access to Information make the domain global and all pervasive
• Product Innovations not sustainable• Commoditization of Industrial Era Technologies• Design and Engineering can be done any where• Engineering Services will be big …
• Product Development must be global• Case of Innovative Drug Development Programs• Purchasing Power Parity Drives future ability to grow
• Globalization of baseline education• An era of interdependence … will drive competitiveness• Its NOT … We vs. They … it may be … We & They • Creativity and Competitiveness will sustain your growth