WHAT IS OUTSOURCING?

Outsourcing is the act of one company contracting with another company to provide services that might otherwise be performed by in-house employees.

WHY TO OUTSOURCE? Reduces costs. Efficiency. More affordable to outsource to

companies located in different countries.

HOW IS IT DONE? Desired results such as cost-

effectiveness, quality and efficiency not delivered.

 Make a detailed assessment about the applicability of the process to outsourcing.

 Choosing the right outsourcing service provider.

 Selecting the most appropriate outsourcing service provider.

Multi-process outsourcing or MPO is a transaction in which an organization outsources two or more of its distinct processes or functions to a third party supplier.

It is complex due to the variety of processes being outsourced.

Purpose : To maximise the effectiveness by outsourcing various elements of the organisation to best possible providers, thus focussing on core competencies.

Aims at a focussed solution from a true

expert for each process.

Enjoy greater competitive edge during the

sourcing of each aspect of the service.

As each partner is accountable to deliver one

element of service, contingencies are reduced.

Additional management costs are saved.

Ending an underperforming contract is

far less impactful than ending a whole

outsourcing agreement

ADVANTAGES

It requires multiple contracts.

Far greater allocation of internal resources needed for programme and contract management to ensure that your multiple partners deliver to your expected objectives.

You are still left with ultimate accountability and risk for delivering the combined service objectives.

DISADVANTAGES

BUILD, OPERATE AND TRANSFER

Enterprise

Third Party

Project

Time or Buy Out

ADVANTAGES Saves time.

Saves money.

Saves effort.

DISADVANTAGES Additional costs are incurred to pay a

profit to the service provider.

Tie-in effects arise.

Inflexibility results from the enterprise customer’s commitment.

“The delegation to a supplier for the capture, imaging, conversion or creation, production, processing, printing, mailing, electronic transmission, and/or fulfilment of any type of printed or electronic document to a service provider specializing in those services.”

- Infotrends, US

ADVANTAGES Better quality in less time.

External documentation services can

increase flexibility and reduce time to market.

Provides workload relief to the employees in the main company.

DISADVANTAGES “Outsourcing is too expensive.”

“When I outsource documentation, I will

have to spend a lot of time on project management.”

“Outsourcing makes us dependent. What happens if a contractor terminates service or becomes too expensive?”

PROJECT MANAGEMENT RESPONSIBILITY OUTSOURCING

ADVANTAGES Outsourced project managers look

at planning, controlling, scheduling, and tracking with fresh eyes.

Consultants help ensure best practices are followed.

Project management professionals will do

sector-specific research and will be conversant in the latest thinking.

Clients can focus on core competencies.

You can become better prepared for dealing with similar projects in the future.

DISADVANTAGES You must commit your internal resources

even when external resources are used. If you don’t work the relationship properly, you

may never develop the project management skills you need in-house.

Money is burned quickly when there are misunderstandings or poor management at the start of the project.

The risk of compromising sensitive company information can be high, depending on the nature of the project.

MANAGED SERVICES

In Managed Services Outsourcing, day-to-day management responsibility is outsourced to a third party – this is primarily based on the mutual trust between client and third party.

For small and medium-sized businesses (SMBs), managed services provide enterprise-class capabilities for a predictable monthly fee—without requiring a large, initial capital investment.

Eases adoption of new business processes increases levels of support and network availability without additional staff.

Provides access to the latest technology with limited risk.

Provides access to an enhanced skills base makes it easier to adapt to changing business conditions enables the IT group to focus on the core business

ADVANTAGES

DISADVANTAGES Vendors are sometimes reluctant to

assume more management responsibilities.

Culture mismatch between client and vendor organizations.

Vendors wont be in a position to understand all of the client organization’s relative problems.

OUT-TASKING

Out-Tasking is a simple contract wherein the other party agrees to complete a task i.e., a part of your overall service, in a particular time frame at a particular price.

It is more of local/household concept than a global concept.

“One job & Move on.”

Fewer costs since they are just one off tasks.

ADVANTAGES

Nothing as such, Just

don’t over-do it.

DISADVANTAGE

REASONS FOR ENTERING INDIA

Cheap as well as skilled labour –often overqualified.

Dell could gain more experience by working with third party vendors.

Risk Mitigation/Distribution.

CHALLENGES FACED Time consuming to find the right

people and teach them about Dell’s culture.

Language and cultural dimensions.

Difficulty in employee retention.

THE DOWNFALL

Weak planning as Dell failed to plan for the call centre in the long term.

Did not plan for training the staff with new additions in Dell’s technology base.

Heavy accents, long delays in transfer of calls lead to customer frustration.

Cultural issues.

CASE ANALYSIS

RECOMMENDATIONS Investigation and Pre-Outsourcing

analysis.

Training employees to acquire the language skills of the customer base.

Outsource manager to be appointed to mange and monitor off shore outsourcing projects.

THANK YOU Akshat Merchant – 5

Akshay Agarwal – 6 Ankur Poddar – 8 Prateek Bhardwaj – 31 Prerna Gupta - 34 Sharanam Khurana - 41 Tanya Verma – 49 Vatsal Bhandari – 51