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Agenda

Agenda. Industry Trends. Evolution of Outsourcing Vendors. 1980s. 1990s. early 2000s. 2010s. The offshore outsourcing trend and practice is due for a transformation.

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Agenda

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Presentation Transcript

  1. Agenda

  2. Industry Trends

  3. Evolution of Outsourcing Vendors 1980s 1990s early 2000s 2010s

  4. The offshore outsourcing trend and practice is due for a transformation. Client concerns about changing business objectives, the proliferation of “as-a-service” offerings, and demand for deep industry specialization suggest that only the most collaborative, innovative, and trusted vendors will succeed. Forrester

  5. The number of external IT service providers that buyers use, on average, is already too high. Organizations continue to show a wider interest in outsourcing. Organizations are looking for better ways to manage strategic providers. Clients are less tolerant of finger pointing in a cost-focused market. Alliance offerings from outsourcers are gaining traction. Outsourcing Trends - Gartner

  6. Key Theme Engagement Models

  7. Time and materials (still the most common). Portfolio-based pricing based on SLAs. Managed Services (Volume-based). Managed Services (Metrics-based). Co-Innovation. Hybrid. Engagement Models

  8. Managed Services Enables the IT organization to focus on areas where it can add valuevs. primarily monitoring Typical Split of IT Organization focus in managed services Typical Split of IT Organization focus in Staff-augmentation Technology visioning, Architecture direction IT Direction Setting IT Direction Setting Areas which can provide high returns in terms of business alignment for time & effort invested 10% Vendor Performance Management Relationship metrics, Value monitoring and management 35% 15% Business Liaison Business value monitoring and management Partner Performance Management 25% 20% IT Project Management Activities which can be competently performed by mature vendors with some oversight by the Client IT Organization Business Liaison 35% Day-to-day monitoring of project progress 50% IT Project Management 10% This allows the client IT to engage with the organization better, as an enabler of business results, going beyond the traditional role as a procurer of services

  9. Vendor Consolidation • Consolidation is the natural evolution of most outsourcing strategies LOB 1 LOB 2 LOB 3 LOB 1 LOB 2 LOB 3 LOB 1 LOB 2 LOB 3 In House In House In House • Minimal use of contractors • Local work • High cost • Lower productivity, e.g. no global delivery • Widespread use of contractors • Adoption of global delivery • Contract awards largely driven by hourly rates • Ad hoc selection of vendors • Peak benefits achieved within several years • Focus on handful of key “strategic vendors” to do vast majority of work • Adoption of new commercial models focused on results, not inputs • Contracts awarded based on work history, capabilities and synergies with existing work Vendor A Vendor A Vendor B Vendor C In -House In -House In -House In -House In -House In -House Pre-Outsourcing Arbitrary Outsourcing Logical Outsourcing 2000’s 80’s/90’s 2010’s Outsourcing adoption timeline

  10. Key Theme Governance

  11. Value of Governance Effective governance leads to both value creation and reduced cost of coordination for the Client and Sourcing Partner • An ability to adapt effectively in a rapidly-evolving high-pressured environment • Effective management of program scope • Effective management of program stakeholders • Efficient resolution of problems and addressing the “gray areas” of the contract • Ability to review and provide approval to explore new avenues for innovation and improvement • Reduced coordination costs • Less time wasted due to poorly-managed conflict 12

  12. Governance - Root causes of Transition Failure Source - EquaTerra 13

  13. Key Theme Innovation

  14. Improved cost savings, customer service, revenue, and productivity, require innovation

  15. MOBILE WALLET

  16. DIAGNOSTICS ON MOBILE

  17. Case Study

  18. THANK YOU 19

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