outsourcinginvariousfunctionsandindustries-130718020452-phpapp01

8/12/2019 outsourcinginvariousfunctionsandindustries-130718020452-phpapp01

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OUTSOURCING IN VARIOUS

FUNCTIONS AND INDUSTRIES


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OUTSOURCING IN

FUNCTIONS AND

INDUSTRIES


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WHAT IS OUTSOURCING??

Outsourcing is the process by which an organizationcontracts with another individual or company to get someof its work done.

Generally it is non-core aspects of the business that areoutsourced.

Main reason for outsourcing is to cut costs while focusingon core business activities.

Quality management and controlling might be a big risk


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Outsourcing Industry in

India India is a market leader in global outsourcing.

Six of the world's top outsourcing

destinations are located in India.

As of 2007-08, Indian outsourcingindustry isestimated to be worth nearly $52 billion.

Banking and financial services account for about 40percent of India's outsourcing business.
http://www.economywatch.com/world-industries/outsourcing/http://www.economywatch.com/world-industries/outsourcing/


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INDIA A FAVOURED DESTINATION

Availability of qualified manpower

Political stability

Infrastructure

Communication skills

Lower wages

Proven delivery capabilities


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TYPES OF OUTSOURCING

Business

ProcessOutsourcing

KnowledgeProcess

Outsourcing

InformationTechnologyOutsourcing


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BUSINESS PROCESS OUTSOURCING

Contractingof the operations andresponsibilities of specific business functionsto a third-party service provider.

Categorized into back officeoutsourcingand front officeoutsourcing

BPO that is contracted outside a company's

country is called offshore outsourcingand thatto a company's neighbouring (or nearby)country is called nearshore outsourcing.
http://en.wikipedia.org/wiki/Contractinghttp://en.wikipedia.org/wiki/Back_officehttp://en.wikipedia.org/wiki/Front_officehttp://en.wikipedia.org/wiki/Offshore_outsourcinghttp://en.wikipedia.org/wiki/Nearshoringhttp://en.wikipedia.org/wiki/Nearshoringhttp://en.wikipedia.org/wiki/Nearshoringhttp://en.wikipedia.org/wiki/Nearshoringhttp://en.wikipedia.org/wiki/Offshore_outsourcinghttp://en.wikipedia.org/wiki/Offshore_outsourcinghttp://en.wikipedia.org/wiki/Front_officehttp://en.wikipedia.org/wiki/Front_officehttp://en.wikipedia.org/wiki/Back_officehttp://en.wikipedia.org/wiki/Contractinghttp://en.wikipedia.org/wiki/Contracting


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FUNCTIONS UNDER BPO

Professional - accounting, purchasing, information

technology support and other specialized services.

Manufacturing - optimizing their bottom line and

positively impacting their top line.

Process-specific- specific to a unique process or

internal procedure

Operational - Machine maintenance, equipment

repair cleaning


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Functions Examples

PROFESSIONAL-BANKING

STANDARD CHARTERED hasoutsourced its Money

Laundering Control to India.

MANUFACTURINGFORD outsources its componentmanufacturing to India to run its

global operations.

PROCESSMICROSOFT in India has

outsourced its HR functions toGurgaon solely.


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KNOWLEDGE PROCESS OUTSOURCING

KPO or Knowledge Process Outsourcing callsfor work that needs higher levels ofinvolvement from the worker.

The worker has to employ advanced levels ofresearch, analytical and technical skills.

KPO industry is less older and mature thanthe BPO sector.


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FUNCTIONS UNDER KPO

SEGMENT EXAMPLES

Legal services Morgan Stanley, Dupont

Market research and

analytics

Bharti Airtel hired Ogilvy

Pharma and R&D GlaxoSmithKline hired TCS

Health care services Fortis and Sri Ganga Ram

Hospital- SurrogacyEducation and training Online Math for overseas


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INFORMATION TECHNOLOGY

OUTSOURCING An organization uses IT outsourcing for functions

ranging from infrastructure to software

development, maintenance and support.

A company may outsource all of its data

storageneeds because it does not want to buyand maintain its own data storage devices. Mostlarge organizations only outsourcea portion ofany given IT function.
http://www.webopedia.com/TERM/I/software.htmlhttp://www.webopedia.com/TERM/I/enterprise_storage.htmlhttp://www.webopedia.com/TERM/I/enterprise_storage.htmlhttp://www.webopedia.com/TERM/I/storage_device.htmlhttp://www.webopedia.com/TERM/I/outsource.htmlhttp://www.webopedia.com/TERM/I/outsource.htmlhttp://www.webopedia.com/TERM/I/storage_device.htmlhttp://www.webopedia.com/TERM/I/enterprise_storage.htmlhttp://www.webopedia.com/TERM/I/enterprise_storage.htmlhttp://www.webopedia.com/TERM/I/software.html


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"By 2009 the Information Technology andEnterprise Solutions (ITES) market in Indiaalone is likely to reach $142 billion. Thisestimate contrasts with the current price tagof $532 billion to provide these services in theUnited States."

McKinsey Study


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DELL A study in Call Center


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QuickFacts

Currently employs 8,000 Indians.

Services outsourced :

Customer service

Software Development

Added a third, 180,000-square-foot call center just thisMarch, with about 300 new employees to start

Plans to add 2,000 people within the next year to bolster itssoftware development and back-office services.

Expanded call center payrolls.


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Innovation

Quality ofWork

CostReduction


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A WAVE OF COMPLAINTS

"I feel sorry forDell technicians ifthey don't havethat information.They're on the

front lines."


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Consideration to deindianize!??

Language and cultural rifts betweendisgruntled U.S. customers .

Dell employees fielding calls seemed unwillingto depart from a script.

The biggest challenge for Dell in India wasworking on the accent.


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BUT, WHAT MICHAEL DELL HAS TO

SAY ABOUT IT ?


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India represents a great market opportunityfor us.business is expanding at a very rapidpace there.

- Michael Dell


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INDIA-STILL DELLS FAVOURITE. Manufacturing not possible in India because for

that a large market, good supply base andexport-import environment is necessary.

So in order to take the benefit of *Small IndianCallers* , it wants to direct its processes toIndia.

Thus, investment in the manufacturing base ofUS leads to a reduction in the man minutesfrom 28 to 5 now.


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"The survey of 25 large organizations with a combined $50 billion inoutsourcing contracts found that 70% have had negative experiences withoutsourcing projects and are now taking a more cautious approach. One infour companies has brought outsourced functions back in-house and nearly

half have failed to see the cost savings they anticipated as a result ofoutsourcing.

Deloitte Consulting

DELOITTES view of DELLS response..


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Bibliography

http://www.sourcingmag.com/content/what_is_outsourcing.asp

http://www.articlesbase.com/business-opportunities-articles/types-of-outsourcing-services-96100.html

http://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=2249#T2

http://www.msnbc.msn.com/id/4853511/ns/business-forbes_com/t/dell-moves-outsourced-jobs-back-us-shores/
http://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=2249http://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=2249http://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=2249http://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=2249


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