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Group members
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What is Outsourcing?
Outsourcing -
y the strategic use of outside resources toperform activities traditionally handled byinternal staff and resources Dave Griffiths
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Reasons for Outsourcing
Traditional role - reaction to problemy Reduction and control of costs
y Avoid large capital investment costs
y Insufficient resources available Modern role business strategy
y Allows company to focus on their corecompetencies
y Keeping up with cutting-edge technology
y Creating value for the organization and itscustomers
y Building partnerships
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Why do Companies Outsource?
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Areas of outsourcing Information Technology Operations
Administration
Customer Service
Finance
Human Resources
Real Estate & Physical Plants
Logistics
Distribution
Transportation
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INDIA
MARKET OPPORTUNITY
MARKET:
2005: 35%
2006: 32%
2007: 38% compounded growth 20052009 : 27%
Population growth: 1.44%
Market size: $6,200 million
GLOBALCOMPETITIVENESS: Average
COMPANIES:
Cognizant, Infosys, Polaris, Satyam, Tata Consultancy andWipro
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INDIA
Airlines
General Electric
Third party BPO'sEntry ofIT majors
Emergence of Rural BPOs
Effect of global meltdown
on Indian BPOs
Challenges to outsourcing
services in India
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COMPANIES:
Cognizant, Infosys, Polaris, Satyam, Tata Consultancy and Wipro
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1. Cost-effective services
2. High-quality services
3.Time Zone
Advantages
4.Indias stable government
5. The Indian Advantage
6. Global organizations most preferred
choice
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ADVANTAGES
large labor pool
driven by a technology
intensive educational system
Indian firms also offertransparency in their books
and records
DISADVANTAGES
Satyam scandal
Indian companies alsostruggle with a very large
turnover rate
Strained infrastructure
Poor power capacity andinadequate connectivity
lack of privacy andsecurity
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CHINA
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ADVANTAGES size
low costs of labor
steady investment in thedevelopment of its
telecommunications
infrastructure.
DISADVANTAGES intellectual property issues
Copyright protections
inter-province competition
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Vietnam
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ADVANTAGES
Production cost
Strong labor pool
Stability
Government
incentives
DISADVANTAGES
Government related
Technology
infrastucture
Workforce
limitations
Scale
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Future of outsourcing
Creating a multi-polar world
Greater control in driving and designing deals
Utilize technology and outsource to remain
profitable. India will show excellence
Technological power will shift from the West to the
East
By 2015 China will be No. 1, India No: 2