Outsourcing

What is Outsourcing?

Outsourcing means finding better ways of doing business.

It helps companies to look to the value chain for high leverage areas and helps them to better utilise their resources to exploit these areas.

Outsourcing is a means to achieve competitive advantage by focusing on core competencies.

What to OutsourceCRM (Customer Relationship

Management)SCM (Supply Chain Management)Back Office

PayrollBillingAccountingInvestor Relationship Management – Share

Transfer & Fixed Deposit Accounting

Why OutsourceUse the specialised services and skills of

the Outsourcing partnerBetter utilise internal resources Increased responsiveness to customer

needs Decrease financial risks by reducing capital

investments

Motivators for Outsourcing The followings are the major reasons given for taking outsourcing decisions

Difficulty of hiring skilled professionalsLack of in-house skills to deliver the

desired levels of qualityBudgetary considerationsDependency on KnowledgeDependency on Capacity

Risks in OutsourcingInformation SecurityLoss of control Compromising confidentiality Monitoring costs

Minimizing RisksChoose a service provider that has a

proven track record - talk to customers of the service provider

Know your requirements, both current and future, and put them in the contract

Stay away from variable costs in the contract like communication, travel etc.

Treat the outsourced relationship as a partnership and the employees and extended team members

The relationship between services provider and customer is critical to achieving successful projects. This relationship should be a two-way with shared goals, responsibilities, and incentives on both sides.

Minimizing RisksChoose a service provider who provides

you with value adds, services or products that may not be in the contract.

Develop a strong partnership with the vendor

Secure a confidentiality agreement Simplify the interface between the two

organisations Focus communications

Types of OutsourcingBusiness process outsourcing

Knowledge process outsourcing

Legal process outsourcing

Recruitment process outsourcing

Engineering process outsourcing

The Key Layers in Outsourcing

Strategy

Process Design

Operations

Systems

The Key Layers in Outsourcing

Retain in-house

Strategy - governance, policy setting, decision-making and direction

Process Design - design, and “consultative” activities

The Strategy and Process Design layers are typically retained with the management to ensure overall control of the activity

The Key Layers in Outsourcing

Outsource

Operations - administration, clerical activities and day-to-day execution

System - technology, infrastructure and transactional processing

It is these two bottom layers combined - Systems and Administration layers that are most appropriate for Business Process Outsourcing (BPO)

BenefitsService

Industry knowledge and expertise of the vendor

Quick response time Function Difficult to Manage or Out of

Control They are great in a pinch – ability to

increase resources whenever required

BenefitsCosts

Pay only for what you needThe infrastructure is of the vendorEconomies of scale with the vendor Reduce or Control Operating Costs Outsourcing is a cost-effective way to

increase your resources.

Disadvantages of outsourcingLoss of managerial controlHidden costsThreat to security and confidentiality (in some

cases)Quality problemTied to financial well-being of another

companyBad publicityLack of customer focusLinguistic barriersTime consuming

World’s Top 5 Outsourcing in 20121. Accenture

2. Infosys

3. HCL technologies

4. CBRE

5. ISS

Why Us

Quality and ConfidentialityHighest levels of service

AccuracyInvestor Relationship Management

Technology EdgeReal time enquiry/feedback managementWeb interface for better communication

Complete confidentiality and reliability of information

Dedicated support systems for investor interface with real time information

Thank you!