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Strategic Partnerships in Outsourcing

Explore the benefits and risks of outsourcing and the factors influencing off-shore direction. Learn about Texas Instruments' global presence and their focus on strategic partnerships.

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Strategic Partnerships in Outsourcing

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  1. Strategic Partnerships, Focus on Outsourcing Douglas R. Batts Director of WW Technical Support Semiconductor Division Texas Instruments, Inc.

  2. Texas Instruments Revenue Breakout, 2002 Total $8.4B Semiconductors $6.9B Sensors & Controls$1B Educational & Productivity Solutions$.5B

  3. More than 35,400 employees worldwide • 20,400 in the Americas • 7,900 in Asia • 3,300 in Japan • 2,900 in Europe Texas InstrumentsGlobal Presence Almelo Holland Amsterdam Utrecht Melville Poughkeepsie Rochester Zurich Dublin Vancouver Stockholm Vienna Laurence Harbor Morganville Warren Portland Seattle Espoo Livingston Blackheath Northhampton Quebec Copenhagen Ballerup Alborg Chicago Detroit Beijing Indianapolis Baoying Brussels Leuven Ottawa Essen Koblenz Stuttgart Bloomington Chinchon Freising Toronto Stamford Seoul Attleboro Mansfield Waltham Atsugi Hatogaya Hiji Kitsuki Miho Nagoya Osaka Oyama Tokyo Tsukuba Yokohama Madrid Palo Alto San Diego San Jose Santa Rosa Santa Cruz Santa Barbara Woodland Hills Manchester Merrimack Nice Paris Grenoble Milan Baltimore Germantown Herzlia Kfar Saba Pittsburgh Cary Raleigh Shanghai Aurora Longmont Altamonte Springs Ft. Lauderdale Tampa Versailles Austin Dallas Houston Lewisville McKinney Plano Sherman Atlanta Hong Kong St. Louis Cincinnati Chung Ho Taipei Austin Schaumburg Warrenville Bangalore Aguascalientes Guadalajara Mexico City Baguio Mesa Phoenix Tempe Taipei Kuala Lumpur Singapore Campinas San Paulo Sydney Melbourne

  4. WW Technical Support Americas Asia Japan Europe Product Information Center - Taiwan Product Information Center Product Information Center Product Information Center Product Information Center - Shanghai Sales Lead Management Sales Lead Management Sales Lead Management Sales Lead Management Centralized Account Management Centralized Account Management DSP SDS Support Team India Email Support Team WW KnowledgeBase Operations

  5. TI PIC Global Presence • Japan PIC: • Tokyo, Japan • Tele-Marketing-Japan • 5K customers • Asia PIC: • Taipei, Taiwan • Netwise • 5K customers • Americas PIC • Dallas,Texas • Harte Hankes • 15-20K customers • China PIC: • Shanghai, China • Opening 11/03 • Sykes Industries • 5K customers • Europe PIC: • Freising, Germany • Harte Hankes • 10-15K customers

  6. Balancing Off-Shore Risks vs Rewards • Lower operational cost structure • Lack of scale • Supply chain infrastructure • Quality controls Off-Shore Rewards Off-Shore Risks *China's low labor costs are no substitute for diligent supply chain management, Andrew MaclellanEBN

  7. Factors Influencing Off-Shore Direction • Increasing case volumes • Increasing case complexities • Improved customer support initiatives • Improved case resolution times • Flat operational budget $ constraints • Shrinking Americas talent pool

  8. America’s Shrinking Engineering Talent Pool US Graduate Talent Pool YR02 Engineering Talent Pool • Bachelor degrees in engineering in 2001 were 65,195, down from 71,386 in 1988, an 8.6 percent drop* • For the same time period, electrical engineering degrees declined 47 percent, from 24,367 to 12,929 • In the US, more students are getting degrees in “parks and recreation” than in electrical engineering. ** • Europe graduates three times as many engineering students as the US, Asia five times as many. • Less than two percent of U.S. high school graduates will earn an engineering degree * Southern Methodist University *American Association of Engineering Societies ** Wall Street Journal

  9. Key Outsourcing Considerations • Leadership in Key Disciplines • Quality of Operations • Skills and breadth of available talent pool • Operational effectiveness • Efficiency of Operations • Cost effectiveness • Scalability • Flexibility • Global Footprint

  10. The Gartner Offshore Vendor Ratings provide clear, concise indicators of each vendor's overall status and the status of such initiatives as strategy, organization, product(s), technology, marketing, financials and support. August 7, 2003 Source: Rediff.com

  11. Key Outsourcing SLA Considerations • Metrics • Hiring/retention • Training (80/20 or 20/80) • Formal review process • Exit clause

  12. Typical Outsourcing Program Elements • Program Overview • Human Resources • Recruitment • Training • Retention • Quality • Performance Objective • Implementation • Account Management • Quality Assurance • Schedule • Pricing 8/03 Shanghai PIC Proposal

  13. End to end Product Design & Support Total Outsour cing Developer / Field Engrs / Sys admin / Pre-Sales Technical assistance Product Support Current engineering support End-userhelpdesksupport Systemintegration Product Design Testing System Applications VLSIDesign Silicon SystemDesign Product architecture & Consulting Concept Comprehensive range of Product Engineering solutions *Wipro Technologies customer presentation - YR03

  14. Pre- Analysis Ongoing Operations Transition Management Analysis Key Activities • Understand client business • Identify outsource opportunities • Assess requirements • Review environment • Confirm viability • Gather documentation • Identify solution and costing • Confirm and validate with client • Prepare process implementation plan • Adapt process plan • Emulate client process • Document operating plan • Confirm performance requirements • Customer acceptance • Operations accepts service responsibility • Quality plan put into effect • SLA acceptance Deliver-ables • Client process understanding • Joint recommendations for outsourcing of any related/relevant process other than mentioned in the contract/RFP • Requirements document • Environment/Resources /Performance Document • As-is process mapping document • Solution / Technology document - developed in conjunction with the client • Process implementation plan • Operating Plan Blueprint • Performance requirement document • Resources / Infrastructure / Technology ramp-up • Quality plan • Knowledge transfer from client site to operations team offshore • Pilot Process kick-off • Continuous Monitoring by client on SLA’s Location Offshore Offshore-Onsite Offshore-Onsite Offshore Timeline 1-2 weeks 1-2 weeks 2-3 weeks Ongoing engagement Responsi-bility Client functional managers Wipro BPO specialists Client functional managers Wipro analysis team Client functional managers Wipro transition team Client operations team Wipro service delivery head Our engagement approach is structured along four phases Using Transition Toolkit *Wipro Technologies Customer presentation YR03

  15. Customer Touch Points Level III Catalog Product Applications Support CUSTOMERS Wipro India Out-sourced DSP/HPA L2 Support (E-mail only) Wipro India Out-sourced DSP L3 Support (E-mail only) WW Technical Support Model Product Information Centers WW LBEs/SBEs Level I Front End (OutSourced) Senior Information Specialists Level II Back End TI Engineers (Specialization by Product.SBE) PIC K-Base ti.com DSP Village Analog Portals RegionsStrategic PartnershipsModel Americas Harte-Hanks In-Source Europe Harte-Hanks In-Source Asia (Taipei) Netwise In-Source Asia (Shanghai) Sykes In-Source Asia (India) Wipro (L2/L3 only) Off-Shore Japan Tele-Marketing-Japan In-Source Field Sales Customer Service Field Sales Organization

  16. Case study: Technical support Leading Semiconductor vendor Impact Client Situation Transition Solution • Our client is a global leader in DSP and analog products • Product support is strategic to client’s sales strategy • Client has support centers in Americas, EMEA and APAC. Only Americas has all L1 to L3 support • Client partnered with Wipro to augment support to free internal team and to reduce support cost • Wipro team started with L3 TAC support for limited product families for EMEA and APAC escalations • Wipro used a transition process comprising pre-process and process training on a train the trainer model and onsite support • Support team transitioned to offshore after 3 months • Wipro uses Vantive for issue management and Citrix for accessing Client’s k-base • Siebel based call tracking & escalation system • In a 12 months period, Wipro supports most product families and provides L3 support to Americas and L2 / L3 support to EMEA and APAC • e-mail based support with limited inbound & outbound voice calls • Average resolution time of Wipro team at 2.9 days from previous 5.7 days is best among all support centers • Wipro’s application notes for sw development system downloads are ranked #1 and #3 • Customer satisfaction index at 92% for L3 and 93% at L2 against SLA of 90% *Wipro Technologies customer presentation Yr03

  17. Wipro Customer Satisfaction Results 96% Goal Past 12 Months Data • Customer satisfaction metric of 96% or better • FAQ generation of 4/mo. or more • Q-Lead generation of 4/mo. or more

  18. Questions?

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