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Outsourcing and the Technology Business

Outsourcing and the Technology Business. Presented by: Soufi Fazai Syed Khurshid Alex Lai Christie Martinez. Organizational Background. History Industry Services Structure Financial Situation Competition Customers. Founded in 1995 Privately Held

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Outsourcing and the Technology Business

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  1. Outsourcing and the Technology Business Presented by: • Soufi Fazai • Syed Khurshid • Alex Lai • Christie Martinez

  2. Organizational Background • History • Industry • Services • Structure • Financial Situation • Competition • Customers

  3. Founded in 1995 Privately Held Filed S-1 on February 12,2007 to become public The largest independent screening providers focusing on employment background screenings for large and mid-sized organizations Delivering more than 50 service offerings in more than 200 countries and territories Developed the first Internet-based background screening solutions for its customers Comprehensive domestic and international coverage History

  4. The background screening market estimated to be $4 billion in size and to consist of more than 1,000 screening firms. Reasons behind the growing demand for background screening solutions Increasing public awareness of potential security threats Laws and regulations that governments and other regulatory bodies have established to identify and minimize potential threats. Industry

  5. Services • Background Screening • Drug & Health Screening • Pre-Integrated Solutions • Employment Application Solutions • Industry Solutions • Global Verifications

  6. Criminal Records Searches Sex Offender Registry Searches Social Security Number Trace Social Security Number Validation Employment Verifications Education Verifications Credit History Examination Motor Vehicle Records Checks (MVR/DMV) Professional License Verification Professional Credential Verification Professional Reference Checks OFAC / Prohibited Parties Searches FDIC and Financial Industry Searches Civil Court Records Searches Military Record Verification Workers' Compensation History International Background Checks Volunteer Background Checks Industry-Specific Searches Drug and Health Screening Source for Employment Screening Services

  7. Global Verifications • HireRight Global Services • Criminal historyEducation and credential verificationsEmployment verificationsLocal-language media/public domain searches and integrity checkingDriving records checksCredit reportingDue diligence checkingProhibited PartiesIndustry- and country-specific verifications

  8. Other Services • Policy Development • Collection Site Identification • On-site Collection Training • Medical Review Officer (MRO) • DOT Controlled Substance Abuse and Alcohol Form • DOT Pre-Audits • DOT Audit Assistance • Expert Witness Testimony

  9. Structure • Corporate Headquarters: Irvine, CA, USA • Major Shareholders: Robert W. Baird & Co., DCM - Doll Capital Management, Goldman Sachs, Split Rock Partners • Notable Individual Investors: David Duffield, founding CEO and Chairman of PeopleSoft; Peggy Taylor, co-founder of PeopleSoft • Management Team:Eric Boden - President and CEOJeff Wahba - Chief Financial Officer Lisa Gallagher - Vice President, Operations

  10. Financial Situation • HireRight ranked number 169 on Deloitte’s 2006 Technology Fast 500, a ranking of the 500 fastest growing technology, media, telecommunications and life sciences companies in North America. • From 2001-2005. HireRight grew 1,034 percent • Significant revenue growth over the past five years • HireRight ranked 7th on the 2006 Technology Fast 50, which is a regional ranking of the 50 fastest growing technology firms based in Orange County, CA

  11. Competition • Other Employee Background Screening Firms

  12. Competitive Advantage • Reasons for Hire Right's success among competitors • Industry-leading employment screening solutions developed in direct response to market needs • Real-time access to all background screening reports via the Internet anytime, from anywhere.

  13. Competitive Advantage • Single web-based order interface Consolidated user-friendly reportsPrivacy and consent forms in the local language where requiredAround-the-clock multi-lingual verifications staffWorldwide research networkCompliance expertise in verifications and employment law as well as European Union and Asia-Pacific data privacy requirements24x5 customer service

  14. Health Care Financial Services Transportation Education Oracle PeopleSoft Vurv VirtualEdgePeopleAdminDeploy SolutionsTaleoPeopleclickPrevisorHewitt DDIVisaNow Customers and Partners

  15. The Interview • Wednesday, March 7th, 2007 • Lisa Gallagher, Vice President of Operations • Joined the company October 2000 • Responsible for all aspects of Hire Right’s operations, including occupational health services, background verification and customer service departments • Cal State Fullerton Alumnus • After she began working with the Indian market, she joined the Hunger Project to end chronic hunger in Bangladesh, Sub-Saharan Africa, and the smaller villages in Latin America.

  16. Outsourcing Activities • HireRight, Inc. strongly believes in offshoring and outsourcing and has activities in • Estonia • Russia • India

  17. Estonia • Production – parts of software production is sent to Estonia to be produced but more security related software production is sent back to the US for finalization. • Does product development and testing • Over 50 employees

  18. Moscow, Russia • Builds software solutions • Mostly does modular pieces of production to keep intellectual property in the US • Equivalent to 10 full time employees working for Hire Right, Inc.

  19. India • This is the largest part of Hire Right’s outsourcing and requires the most attention • Subcontract to company in India which has approximately 150 full-time employees working for Hire Right • Majority of Hire Right’s entry-level work-load is done in India • India works to verify employment & education through the internet and will handle other screening processes for Hire Right

  20. United States • Screeners in U.S. handle the calling for verifications (due to Indian accents which might turn off customers and applicants) • All server information stays in the U.S. • Production of intellectual property and sensitive aspects of software done in the U.S. • All administration takes place in U.S. • U.S. provides specs to Estonia and Moscow for production

  21. Outsourcing by Competitors • Less than 10% of the competitors outsource • Reasons for not outsourcing: • Lack of control • Cultural issues • Fear of what customers will think • Fear of the unknown • Takes a great deal of work to outsource • Companies have experienced problems with outsourcing sometimes because they do not take careful, measured approach • Hire Right, Inc. made a partnership with their subcontractor so all are committed to success

  22. Benefits of Outsourcing • Substantial financial benefits and cost savings • Has brought down the cost of doing business significantly • High quality of output • Outsourcing has allowed Hire Right, Inc. to increase their customer base in other countries. • Started with 42 countries but now providing services in over 200 nations.

  23. Benefits of Outsourcing • Able to get college graduates who will work for less • Cannot find this in U.S. very easily – most graduates do not work for that little of money or the turnover is very high • More aligns with what the customer is willing to pay and what Hire Right is willing to spend • Culture in India is to follow directions thoroughly • To ensure this, Hire Right created processes

  24. Issues with Outsourcing in India • Original CEO of the subcontractor is Indian but has worked in the U.S. before therefore he understands the issues faced by the U.S. firms and is easy to deal with. • Production issues led to renegotiation of the work contract. • Workers wanted to reduce the production quota • New contract allows for payment per piece of output • This secures the profitability of Hire Right, Inc. • Factored in incentives and penalties

  25. Issues with Outsourcing in India • Lower production output • Seems to not do as well with problem solving or thinking for themselves • High turnover, especially for woman who are unmarried and still live at home • Work hours contribute to this: they work US business hours

  26. Impact of U.S. Economy • Believes that there is a positive impact • Most US multinationals are outsourcing now • Lowers costs to businesses are passed on to consumers • More purchasing power • Unemployment is at an all-time low • Many positions available in growing retail sector for those displaced by outsourcing • Most outsourcing affects entry-level workers

  27. Thank you! Source www.hireright.comFor more information, visit the company's web site at: www.hireright.com

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