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Global Outsourcing Trends: Maximizing Business Potential

Explore the evolution of global delivery models with insights into outsourcing benefits, India's competitive edge, and impactful strategies for technology-savvy business growth. Join industry leaders in discussing future trends and practical solutions.

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Global Outsourcing Trends: Maximizing Business Potential

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  1. Vincent Nair Managing Principal, Australia & New Zealand WIPRO Infotech CIO Executive Council

  2. AUSTRALIAN CIO DIALOGUESWill Outsourcing and Off Shoring do it for your Business? Vincent Nair Managing Principal WIPRO Infotech Australia/NZ

  3. Outsourcing Overview Evolution of GDM India’s Competitive Tool – Why India? Future Evolution of Global Outsourcing The Agenda 1 2 Trends in Outsourcing 3 4 India as a Pivot in GDM 5 6 Indian IT Industry – Best Practices 7

  4. Differences – Insource/Outsource/Off Shore $ Savings & Technology Savvy Up to 50% Budget Savings Future Off Shore Future Near Shore /Off Shore Outsourced but on Shore Future Future Co Sourced Infrastructure Current In Sourced Infrastructure Time (Years) 1 2 3 4 5

  5. The CIO Noise in Australia Peter Mahlar - CIO Coles Myer “ I want to know what is over the horizon. Don’t talk to me about bits and bytes. If I am going to invest millions with your company, you need to talk to me about the Future…” Peter Holland - Knowledge and Information Systems General Manager Toyota, Australia “ The days of an enterprise resource planning system sitting in the backroom churning away are gone… reducing day-to-day costs of running an IT shop will be the priority…” Michelle Tredenick – CIO National Australia Bank “ Skills shortage in some hot technology areas are looming….we have to choose to outsource or off shore some of the work

  6. Global Trends in Outsourcing IT Services & Offshore Market • Offshoring is a key element of outsourcing strategy in US and Western Europe • India – A pivot of the offshoring strategy – Is a cost, quality, value based destination • Trends indicate increasing momentum towards utilizing Indian capabilities in the future • Can Australia leverage offshoring more? • Has Australia explored Indian opportunities enough? Source: IDC

  7. India China Phillipines Singapore Malaysia Japan New Zealand 1-4% 5-9% Don’t know 10-14% others 15-19% 20-24% 0 5 10 15 20 25 30 35 40 more than 30% (% of responses) 0 5 10 15 20 25 (% of responses) Outsourcing Trends in Australia For the most recent infrastructure services for which you have offshored, please select the types of services you have purchased Preference for countries % OF COST SAVINGS EXPERIENCED Source, IDC Australia Offshore Outsourcing Survey, 2005

  8. The CIO Journey

  9. Leading to 2nd Generation Outsourcing

  10. Evolution of Global Delivery Paradigm Future of Global Delivery Integrated Delivery Unified Processes for Customer Centricity Geo – Agnostic virtual delivery Source: Forrester

  11. 1.7% 2.1% 2.3% 3.3% 3.8% 4.5% 6.8% 75.5% India CEE Philippines Latin America China Canada MEA Others India as a Pivot in GDM Worldwide Offshore IT Services Share by Region, 2004 Low Cost Global Delivery Player Total = $9.8 Bn. India well established on the Global Outsourcing Stage Source: IDC and Forrester

  12. ICT= India’s Competitive Tool – Why? Performance Highlights • India has 28% of suitable talent among all cost competitive offshore locations • Key stakeholders are taking initiatives to further enhance India’s talent proposition Abundant Talent 1 • Significant primary infrastructure is being built in leading centres • ~ 25 million sq feet of Class A real estate was available in 2005 • End-to-end network uptime for India and other offshore locations vis-à-vis US levels (~99.95%) Quality & Scaleable Infrastructure 2 Critical Ingredients of India’s success • India based players have managed to maintain quality and cost leadership vis-à-vis other countries Operational Excellence 3 • India’s business environment is competitive with those in other countries • Key government policy interventions have catalyzed growth Conducive Business Environment 4 Growing Domestic IT/ BPO Market • Increase in domestic spending on IT 5 = Low = High Source: Nasscom-McKinsey Report 2005, Wipro Estimates

  13. Vertical Focus R&D Services 26% Custom App Dev & Maintenance 30% Testing Services 7% Consulting 5% IT Enabled Services / BPO 10% Infrastructure Services 10% Package Implementation 12% Indian IT Industry – Innovating Constantly(1/2) Pioneering the Global Delivery Model Building complete services portfolio Indian IT Industry: Value added Offshoring Leading IT companies have transformed into Full Service Providers India pioneered the Global Delivery Model Talent Development – A critical success factor Wipro Example: Strong 360º Portfolio Wipro Example: Global Delivery Capabilities

  14. Process Excellence Customer Centricity Business Excellence Personal Change People Management Indian IT Industry – Innovating Constantly(2/2) Quality Leadership Differentiation through Innovation 80 of the world’s 117 SEI CMM Level 5 companies are based in India R&D centers by GE, Microsoft, IBM, DELL, CISCO, Intel etc. set up in India • 1. New Service Lines • 2. IP / Point Solutions based on deep domain understanding • Non linear Business Models • Business Impact SLA Delivery Wipro Example: The Wipro Way Wipro Example: Innovative Delivery

  15. Future Evolution of Global Outsourcing Service Oriented Architecture Standards Based Components Virtualised Resource Model End to end Management Flexible Operating Cost Models Flexible Sourcing Models Driving Business Agility

  16. Our Preparedness thru Integrated Delivery Framework PMO – Managed Services Cob IT Framework People Process Technology Transition Phase Life-cycle Management Initiation Phase Plan Monitor KAP & Planning Phase Implementation Phase Acquire Deliver Hand over to Sustenance IT Infrastructure (ITIL Practice) Human Resources (PCMM) Application Services (SEI CMMi) Continual Improvement (Six Sigma) Projects (PMI) Project management I PAT Knowledge Management K Net Customer Extranet COCOON Six Sigma Defect Reduction Quality Management Veloci-Q

  17. Wipro Blueprint : Getting it right the first time Outsourcing - What to and How to How to managewhat is outsourced 3 2 How to outsource 1 What to outsource How to manage what is outsourced What to outsource How to outsource 3 1 2 Sequencing plan Engagement approach Application Assessment • Application sequencing plan • SLA’s • Risk mitigation • Performance metrics • Governance Model • Engagement plan • Timelines for transition • Change management • Cost savings analysis • Cultural synchronization • Questionnaires/interviews • Study application inventory, documentation status, demonstrations of applications • Offshoreability of applications

  18. Conclusion • CIO key competency today is Strategic Thinking and Planning vs • operational management. • Outsourcing and Off Shoring is no longer an option but an enterprise • wide business strategy. • India is the destination of choice for outsourcing and off shoring • All surveys point to ‘integration’ as the top most technology priority • Questions to: • Vincent.Nair@wipro.com

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