Choosing b/w Strategic sourcing or Outsourcing advisory consultant

Employing a strategic sourcing or outsourcing advisory guide

Strategic Sourcing and outsourcing advisory consultants are aimed on assisting executives with the difficult project of organizing and efficiently completing an outsourcing challenge inside their organisation. It consists of a analysing methods that include a procurement progression and evaluates and assesses getting pursuits within a corporation in a continuing way.

The key aim for this kind of duties is to assess the offer chain managing and make variations which decrease source chain expenses.

Strategic Sourcing is focused on higher levels strategic business objectives and may well include things like benefitial improvements above and above the direct cost benefits from the fast outsourcing relevant alterations. Achieving top fee, progression and good quality positive aspects can signify replacing technologies, buying new solutions or outsourcing total technology dependent aspects of a organization as perfectly as guide functions which benefit from centralisation or economies of scale and leverage a company's acquiring power.

Quite a few terms are applied to refer to sourcing initiatives, which includes off-shoring, next to-shoring, around sourcing, market-aspect, purchase-side, supplier direction, and can be at managing degree and targeted on i.t outsourcing or rationalisation or at c-suite place bringing together significant initiatives inside a world-wide organisation. Strategic sourcing includes a collaborative and continuous relationship between buyers and vendors.

one of the major gains to having an exterior strategic sourcing advisory to help is that is considerably boosts the visibility of the complete provide chain and allows managing to get a obvious audit of their situation and the truth about their recent financial commitments whilst also generating fee personal savings and improved operational effectiveness.

The savings from strategic sourcing arrive from lots of parts and usually highlight lots of techniques that a provider can increase devote consolidation, cope with demand, enhance internal and outside processes, re-set up aggressive bidding situations and produce relationships with inner and outer distributors.

Sourcing initiatives begin with an audit of the ongoing predicament and assessing a company's shelling out inside the context of their market and identifying the most suitable vendors and providers with respect to an overall coherent technique. This can suggest obtaining new vendors that suit the new requirement, negotiating with existing suppliers, or creating new procedures and structure throughout which to take care of accessible dealers so that benefits of any alterations can be assessed and the method modified to improve outcome.

Strategic sourcing advisories are there to deliver sizeable existing encounter in dealing with transform direction, bid techniques, venture operations, outsourcing considerations and negatiations with companies and partners. This assistance can be critical when a firm looks to outsourcing for the first time and has minimal inside experience of managing outsourcing on any important scale.

Strategic sourcing advisory providers are inclined to have a group of extremely encountered marketplace professionals who have relationships and a prosperous observe report or functioning at c-suite point to navigate the mine field on difficulties which an inexperienced provider would run into when wanting to attain a successful outsourcing initiative on their very own. Typically these advisories have worked in just fortune 500 and FTSE 500 corporations with prosperous observe records in managing complex sourcing initiatives at a strategic degree in which associations and sourcing dynamics need to be totally understood.

When shopping for a strategic sourcing consultant, examine for senior executives with this practical knowledge to be certain of obtaining the appropriate final results on your outsourcing venture.

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Not exactly an outsourcing backlash -2009..

Though some predict an offshoring backlash in 2009, it’s still hard to dismiss the fact that companies looking to save much needed cash to continue operations would ignore the idea of outsourcing. Who wouldn’t want to save money given the global economic crisis and increasing competition?

According to Gartner analyst Linda Cohen, “Whenever there’s a downturn people outsource more, not less. Organizations want to take costs out wherever they can. CFOs are pounding on their CIOs to just outsource it, just offshore it.”

Eugene Kublanov, CEO of California based outsourcing advisory NeoIT, agrees with Cohen. He believes: “The difficult economic conditions will push companies further than before to consider what stays in house and what gets done by others. Additionally, demands by the business for further cost reduction will need to be addressed in an environment where many companies have already leveraged labor arbitrage to source the low-hanging fruit.”

The outsourcing industry has its ‘cheap costs’ provision to thank for its staying power, but relying on this for corporate strategy could spell disaster. Recent developments at Satyam’s fraud scandal sent shock waves not only to clients but to the whole outsourcing industry. As clients evaluate their options, so should outsourcing providers.

Offshore providers need to re-evaluate their market positioning as Vamsee Tirukkala, Co-Founder and Managing Principal at Zinnov LLC explains: “We now expect the clients to closely evaluate options of setting up their own captive centers or alternatively also opt for new vendor evaluation techniques. In fact for those who have operations for very many years now, we feel that it’s the right time for them to consider options of having a direct presence or local program management offices for better control.”

Given that third-party providers need to have another look at their corporate strategies, one would think ‘outsourcing innovation’ is the key to all this right? Wrong. “The focus will shift away from open-ended efforts. Buyers will not have much appetite for transformation in 2009″, says Stan Lepeak, research director of outsourcing consultancy EquaTerra. Outsourcing innovations, such as greening of IT outsourcing deals that blossomed in 2008, all of these would take a back seat as clients will push offshore providers to further lower their costs.

On another note, Rajiv Mathew, VP for corporate communications at technology consulting firm ThoughtWorks, shared his thoughts on the possible steps the Obama administration would take to keep the US economy afloat. Matthew believes “Obama will be cognizant of the importance of outsourcing to the American economy and will probably take a calculated risk, if at all he makes any amendments to the current outsourcing polices.”

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Top 10 Trends for Global Outsourcing in 2009

Source:- THOLONS, an Advisory, Investments and Research Firm for IT/BPO/KPO Services Globalization

The ripple of the global economic downturn continues to impact the foundation of the outsourcing industry, both near and long-term.  Service providers are experiencing impact of sluggish growth, decreased margins and employee downsizing. Service buyers are reducing IT budget allocations but still under tremendous pressure to reduce cost and survive.

Despite this lingering cloud of uncertainty, Tholons maintains that the long term demand for Outsourcing remains intact. Decreasing margins will push providers to better utilize existing resources, leverage operational levers, implement new technologies efficiently to differentiate themselves and improve service delivery processes.  Clients, with reduced IT budgets will be more selective – demanding stringent SLAs, greater contractual flexibility and output/result based payments.

Top 10 trends that will shape Global Outsourcing in 2009:
1. The market downturn will impact revenues during the first 2-3 quarters
2. Focus on domestic market to increase
3. Global economic downturn will lead to increased outsourcing in Healthcare, Education, Retail, Telecom and Legal Process Outsourcing (LPO)
4. Governments to take special initiatives in promoting destinations
5. Clients will increase geographic diversity in their service delivery locations
6. Pricing pressures will result in reduced rates and new measures to achieve cost savings and higher productivity
7. Consolidation imminent for small players - focus away from large deals
8. Outsourcing revival by 2009 end - driven by small to mid sized (SME) clients
9. Strong focus on innovation, R&D and technology adoption will be key differentiators for providers.
10. Sourcing deal sizes will increase for large clients

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Outsourcing to the Philippines

The level of outsourcing to the Philippines is growing faster than in any other country, according to the Global Outsourcing Statistics Report released last December 15.

The report also states that the Philippines remains a popular destination for outsourcing work. Other popular countries include the U.S., India, Pakistan, Canada, Ukraine, and Russia.

The bulk of the outsourcing jobs received by the Philippines is in the Knowledge Processing Outsourcing (KPO) sector. This includes data entry and virtual assistants. India’s largest work category, on the other hand, is in the software and web development field.

The report also divulged that the Philippines’ average feedback rating surpassed the oDesk average for the first time. The U.S. has the highest average feedback rating and the greatest number of providers.

Here are statistics from the report:

CANADA
Total Number of Providers: 3,581
Average Hourly Rate Charge: $19.60
Average Feedback Score: 4.32 (out of 5.00)

INDIA
Total Number of Providers: 27,454
Average Hourly Rate Charge: $12.52
Average Feedback Score: 4.01

PAKISTAN
Total Number of Providers: 5,960
Average Hourly Rate Charge:  $11.13
Average Feedback Score: 4.36

PHILIPPINES
Total Number of Providers: 17,213
Average Hourly Rate Charge: $6.33
Average Feedback Score: 4.30

RUSSIA
Total Number of Providers: 2,721
Average Hourly Rate Charge: $16.86
Average Feedback Score: 4.31

UKRAINE
Total Number of Providers: 2,929
Average Hourly Rate Charge: $15.96
Average Feedback Score: 4.36

USA
Total Number of Providers: 52,637
Average Hourly Rate Charge: $18.32
Average Feedback Score: 4.40

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Can United States cut on Outsourcing?

The recent economic depression in America gave jerks and jolts to all major economies of the world. After India and parts of the UK, Germany and Japan also entered the league of losers. The ripples traveled far and wide on the world map.

 

All the economies of the world are interdependent. Let us take note of the India’s economic connection with America- the Indian economy is more closely related to the American economy than its counterparts. The Bush-Manmohan regime witnessed healthy relations between the two countries which were conducive for inter-flow of various industries and services, including outsourcing.

 

Outsourcing of services to American firms by Indian ones turns out to be quite a good deal for the Americans, because of two reasons- one, easily available semi-skilled workforce in India; two, reasonable wages. Thus, the rapid outflow of services led the NCR regions of Noida and Gurgaon to become hubs of BPO and KPO companies, which now employ thousands of Indian semi-skilled youth.

 

However, during the Democratic Party conventions, Presidential candidate Barack Obama had announced that outsourcing to India is adversely affecting America. He promised to cut this outsourcing if elected to White House. As a matter of fact, unemployment rate in USA touched a 20-year high at 14% last quarter. His statement led the Indian BPO industry into a state of shock; the fate of a large population of youth who are completely dependant on call centers faced a question mark.

 

However, it now turns out that Barack Obama can’t take drastic steps until his domestic economy comes back to an optimum level again. Although it is supposed to be improving, it is still not out of the deep side of the pool, and will definitely take time to cope up with the crisis. Even if their government decides to cut outsourcing and get back jobs, how will the companies which are finding it difficult even to pay basic wages to their current employees bear the burden of additional workforce at relatively higher wages? On the contrary, companies from the States will now outsource more jobs to India to cut on expenditure for surviving.

 

A recent report in The Times of India confirms this contrarian belief. In the Banking sector, India’s largest public sector bank State Bank of India will hire 25,000 new hands. Bank of India and Metlife Insurance will recruit 10,000 and 32,000 employees, respectively, while Accenture is set to hire 10,000 employees.

 

Infotech giant TCS is set to hire 30,000-35,000 people this year, and Infosys is sticking to its plan of hiring 25,000 people this fiscal. L&T Corporation Ltd. will hire 10,000 people in the next 3 years. Aegis BPO will add 1,000 people every month this fiscal.

 

This generation of new jobs in our economy is an indicator of the good times to come- it is the silver lining, indeed! Quite ironically, what initially appeared to be a nightmare is actually a blessing in disguise.

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Outsourcing Gyan -KPO

The Outsourcing is through three steps, with the emergence of KPO. It reflects the globalization and the ability of the companies to work, outsourcing. After you saying that the creation of value, especially by reducing variable costs, discovered KPOs part of the chain of the company.

The KPO industry is still in its childhood, and the players are still researching with different business forms. The industry is a pledge by the department of models, games purely enterprises and service providers, offering integrated services. One of them, providers of integrated services has taken the initiative due to its ability to develop a synergy between the various sectors.

All forms of outsourcing actions are came from one or factors such as the benefits of cost, scalability, the ability to quick deployment and geographically attractive. KPO industry has succeeded in these elements, making it an attractive economic sector. However, it is still at an early stage and takes the KPO industry in the next level, the players must demonstrate that their skills and complex tasks for the analytical skills and discipline.

Call center and support were sent to foreign countries for a long time that the Americans are the customer with an accent. This movement is called business process outsourcing, or BPO, and it was an important engine in emerging economies like India . The phenomenon is a process of knowledge, or KPO, in the knowledge of workers jobs elsewhere. The online reports gives an overview of the opinions of analysts about the current market is the KPO, and their views and for his future.

Because the man of the industry, the work is the key question is the KPO. The analysts expect the lack of workforce talent, is a limiting factor for the growth of the KPO. Therefore, the areas that many workers talent KPO destinations. Geographical, with experts, preferably in the post-graduates receive the expertise of the largest cake of employment. Among the other important factors in achieving the geography is KPO infrastructure, technical communication, the attractiveness of the area and the time of the English language skills.

The main drivers of KPO are a search on financial services, followed by companies in the field of research and market intelligence. The services are technical in nature, such as intellectual property and clinical trials of medicines, etc., should contribute KPOs evidence of the mastery of knowledge and experience to analyze issues related to these areas.

The analysts say a successful future for KPOs. Even if the analysts are divided on how fast the industry grows, they agree that the strong growth was registered, but after removal of a number of challenges. Companies to benefit from the services offered KPO industry.

Call center and support were sent to foreign countries for a long time that the Americans are the customer with an accent. They play in New York and New Delhi to obtain. Many of the usual functions, such as the handling of complaints, data and services to support followed his example. This movement is called business process outsourcing, or BPO, and it was an important factor in emerging economies like India .

The phenomenon is a process of knowledge, or KPO, in the knowledge of workers jobs elsewhere. The white-collar, white hair and professions, such as investment analysts were by the 30-something MBA in India , like China and Latin America . The access to broadband, obstacle, because the distance are evaporates, and his colleagues could be the next cube or on the continent.

KPO is increasingly accepted that the benefits for companies that outsourcing is always very large. KPO main financial services include research, marketing, research, life sciences, and legal certainty and analyze. The KPO industry should be assisted by the rapid growth in the near future.

Among the main findings of the KPO sector employs around 106,000 professionals and 2006-07 is estimated at 350,000: 2011-2012; KPO sector in India is 11.2 million U.S. dollars 2011-2012 and seeking justice and the investment banking sector is currently one of the fastest growing areas of offshoring.

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Outsourcing Gyan

What is Outsourcing??

Outsourcing is often defined as the delegation of non-core operations or jobs from internal production within a business to an external entity that specializes in that operation. Outsourcing can be considered a strategic management tool that helps companies concentrate on their core competance and delegate other peripheral activities to an external agency that specializes in that task.As a concept outsourcing is not new and in a way it has been around since the time of hunters and gatherers.Division of labour which entails delegating responsibilities to people who are specialists in what they do, can be seen as a very primitive form of outsourcing.

Outsourcing the way we it understand today started two decades back but was not popular due to a lot of external and internal parameters.These parameters include closed economies, internal resistance to the idea and the apprehension that the vendor might not be able to meet the set expectations.

But since the 1990’s there has been a radical shift in this thought process.Outsourcing as a business strategy has produced tremendous gains to organizations that have been able to streamline the process over years of experience.

Why do companies outsource??

One of the most often cited reasons for outsourcing has been the cost reduction factor.Simply put, what this means is that an organization delegates a job to a vendor who can perform the same job at a much lower cost.The comparitive cost advantage that a vendor offers forms the basis for outsourcing.

Apart from the cost reduction factor there are other reasons as to why a company would want to outsource.These include:

• Avoid capital expenditure

• Improve efficiency

• Offload non-core functions

• Get access to specialized skills

• Save on manpower and training costs

• Reduce operating costs

• Improve speed and service

• Spread risks

• Be reliable and innovative

• Provide value-added services

• Increase customer satisfaction

Outsourcing in India

The evolution of the BPO industry can be traced back to the following significant events in the macroeconomic policy:

• .The liberalization of the Telecom sector in 1994 which encouraged private participation.
• The New Telecom Policy of 1999 introduced IP telephony and ended state monopoly on international calling facilities
• This brought about a drastic reduction in international calling rates and served as vanguard for the emergence of the industry.
• The services which were outsourced initially include medical transcription, data processing, billing and customer support.
• Some of the earliest players include American Express, GE Capital and British Airways.

India is considered one of the hottest destinations for outsourcing given the numerous advantages it has to offer.Some of them include:

• Head start in the global IT revolution
• India’s history and the expertise it has been able to develop over the years
• Availability of manpower
• Moving up the value chain in terms of greater breadth of services being offered
• Stable Macroeconomic conditions
• Number of companies offering ITES services.
• A friendly tax structure
• Fast Turn around times
• Offering 24*7 services services based on geographical location
• Proactive policy environment.