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.

For more information, please contact us at sachith@recruiseindia.com

Captives in India: shut down Mode

Capacity addition by 3rd party service providers (‘Buy’) is likely to surpass additions by captives (‘Make’).

The recent announcement of UBS, a global financial services firm, selling its captive in India to Cognizant Technolgies is the latest in a series of such sell-offs. This only reiterates what Evalueserve had predicted way back in 2007 that the capacity addition by third-party service providers (‘Buy’ option) is likely to surpass additions by captives (‘Make’ option). After a study of about 100 captives of western companies in India, Evalueserve confirmed that a majority of these captives are in serious trouble.

Sixty-one percent of the captives studied have faced significant issues, with many of them already shut down. Smaller captives have been the worst hit; many of the larger ones are not in good shape either.

Captives across all segments—Information Technology (IT), Business Process Outsourcing (BPO) and Knowledge Process Outsourcing (KPO)—have fared somewhat similarly.Smaller captives Captives across all segments—Information Technology (IT), Business Process Outsourcing (BPO)

In contrast, third-party service providers have been scaling up during this
period. Access to new markets and increasing maturity of the service providers have helped them stay ahead.

Majority of Captives Face Serious Issues
In April 2007, Evalueserve predicted in a report titled ‘The future of KPO – Make or Buy? that the capacity addition by third-party service providers (‘Buy’ option) is likely to surpass additions by captives (‘Make’ option). The report also identified three distinct phases in the lifecycle of offshore units in the ‘Make’ model: the set-up phase, the honeymoon phase and the stagnation period.
As a follow-up, Evalueserve studied 100 captives, not only from KPO, but also from BPO and IT segments that have been in operation since January 2006. These included 30 BPO, 38 KPO and 32 IT captives, from the 300-odd captives in India. In cases where the captive catered to overlapping areas (which was the situation in 34 percent of the sample), the predominant area of operation (i.e., IT/BPO/KPO) was selected to classify the captive.

The captives were selected randomly and were of varying sizes with 54 percent of them having more than 500 employees. The current study confirms the earlier theories. Sixty-one percent of the captives studied have gone through varying degrees of turbulence in the past four years—27 percent of them either shut down or were sold to third-party service providers.

For example, Citigroup sold its BPO arm, Citigroup Global Services, to Tata Consultancy Services and its technology captive, Citi technology Services Ltd., to Wipro technologies. HCL Technologies bought Adaptech’s India technology centre, Symphony Service bought biotechnology firm Biolmagene’s India R&D centre and the AOL contact centre in India was sold to Aegis BPO. Besides, companies such as Bose Corp., PowerGen, Riya, Inc. and BelAir Networks shut their captives in India.

Thirty-four percent of the captives studied either remained stagnant or have scaled down. These captives are under great pressure, and we may see many of them exiting in the next 1–2 years. However, small captives cannot be sold off at a premium, and they will find the exit much harder.

Small Captives Worst Hit; Larger Ones Also Not Spared
It is well established that smaller captives with fewer than 500 employees are likely to face greater challenges to survive. In fact, 74 percent of such captives have gone through a difficult time in the past four years. Employee retention is a serious issue in small captives since they are unable to provide good career opportunities.
An interesting finding from the study is that many bigger captives (with more than 500 employees) have also been under tremendous pressure to survive in the past four years. It is evident from the fact that only half of such captives have been able to scale up during this period.

What Led to The Decline of Captives?
The change in the position of captives from a seemingly ‘enviable’ position to an ‘unviable’ condition can be attributed to several factors. The most prominent of them are the following:
Significant management involvement is required while setting up a captive. If the support is sporadic, the transitioning and ramp-up process slows down, leading to cost escalations. In case of third-party providers, the parent company can manage the vendor as per pre-agreed Service Level Agreements (SLAs) and engagement terms, which does require some effort, but is much less than what is required for a captive.


For more information, please contact us at sachith@recruiseindia.com

How to Get Hired In A KPO Job

Jobs in KPO or the Knowledge Process Outsourcing are quite in demand these days given the bright prospects in this field. The industry is fast picking up in India given the wealth of well-educated professionals in India who can be hired at relatively cheaper rates. It is a knowledge based industry and in this regard it is quite different from a BPO. In a KPO, employees are involved in knowledge-based work or research in different verticals. So, people with experience in specialized fields are considered for a KPO job. Unlike BPO, it is not just the youngsters or fresh out of college youth who opt for a KPO jobs but experienced professionals from various fields and even retired people are joining the KPO industry to take up lucrative jobs.

KPO jobs involve work in various fields such as finance, legal issues, intellectual property, analytics, market research and data management for a company. Since this is all knowledge based and confidential work, a lot of risk management is required in KPO jobs in India and abroad. The job would require in-depth knowledge of that area of work. Of course, the KPO centre imparts training to its employees for the vertical that it is working in. High-end knowledge work is executed in these KPOs as directed by the client. It could be data management, petition filing, research oriented work or any other such work that involves proper understanding of that field.

Since India offers good KPO services with a lot of cost advantage, it is estimated that by 2010, nearly two and a half lakh people in India would be employed in this industry. This is an indicative number and given the potential of this industry, it may as well increase. In the past decade, there has been a mushrooming of engineering, technical and professional institutes in India. Thus, there is no shortage of skilled manpower in the country which is capable of handling high-end knowledge work in KPOs. Thus, more and more international companies are either setting shop here or hiring the local talent for research and development work or outsourcing such work to Indian KPO companies that specialize in the particular vertical.

Experienced and qualified professionals are choosing this career option because it is very lucrative. A person with two years of experience can expect to earn remuneration as high as around Rs 6 lakh (Rs 600,000) to Rs 8 lakh (Rs 800,000) annually. Someone with higher experience and knowledge of the industry would easily draw anywhere between Rs 15 lakh (Rs 1.5 million) and Rs 20 lakh (Rs 2 million). However, this industry is fraught with attrition. Since people are not properly aware of the potential of this industry, they tend to leave jobs quicker in this industry.

To get hired for a KPO job, one has to have proper educational qualifications unlike BPO where only a good knowledge of the English language is required. Since in a KPO job, the work requires specialized skills, proper educational qualifications are a must. Qualified people from various diverse backgrounds can look at making a career in KPO. It could be teachers or engineers or MBAs or lawyers or journalists or professionals with financial background. Professionals from all such backgrounds are eligible to work in KPOs. The basic skills required of an employee in KPO job are good analytical skills for data analysis, proficiency in usage of resources for information research, ability to make presentable reports from raw data, good computer proficiency and command over English language.

For a KPO job, one would require domain expertise and knowledge for projects that may involve moderate to very high levels of analysis, research, updating, database creation and cataloguing and indexing. Thus, one must have a basic interest and knowledge in specific domains with an aptitude to working with data and information to thrive in a KPO job. During the recruitment process, candidates are first short-listed on the basis of marks and their previous experience of the domain. Their aptitude and attitude towards doing research-oriented work is also tested during the recruitment process. After selection, all employees are given the requisite training in the domain and the projects involved.

KPO industry employs employees from diverse academic backgrounds. There would be a huge demand for engineers, CAs, doctors, MBAs, lawyers, research analysts, scientific researchers and even PhDs in the near future. KPO is one industry where one can make full use of his/her educational qualifications. Also, good performers in a KPO have remarkable growth opportunities in this field because the number of skilled people is less. They can look forward to a good salary package, in-depth domain knowledge, managerial responsibilities and career growth.

Hiring People in Tough Market Situations

We all know how this is not the employers market. The slump in the market has brought huge challenges to Recruiters whose hunt is still on for the best talent from the market. As the supply of resources flood the market, there surely is a dearth of opportunities within company for open positions. How do we tackle such this situation?

1) Narrow your search: The job portals are flooded with resumes as potential candidates are uncertain about their current job. In a situation like this, it’s very important as a Recruiter for you to narrow your search to the active job seekers than passive job seekers. The active job seekers are responsive to the job offer that you have to offer and they are surely up for grabs.

As for the candidates, its important for you to narrow your search in identifying the right job for you and follow up regularly with the Recruiter on the open head count to have yourself land your dream job.

2) Networking is the key: In a volatile market situation, the job market is the most affected as the perception is LIFO (Last in first out). As a Recruiter, your potential hire is weary of the situation and is not really keen to move out of his comfort zone. The key here would be to build an active network with your potential hires not just for jobs but to gain knowledge on his side of the story. Then it becomes easy for you to present his dream job and then hire him for your open position.

As for the candidates, it helps you to network with the Recruiters and HR folks to gain knowledge on company situation, their hiring prospects, their growth directions just for you to be aware if the move that you are going to make is worth end of it all.

3) Gain business intelligence: Its important to all of us to keep ourselves updated on what is happening around. Gain knowledge on various industries growth or slump. This will help and comes handy if as a Recruiter, you are talking to your potential hire from that domain. This will give you the insight to attract the candidate and also gives confidence to the candidate that he is talking to the right person in the company.

As a candidate, knowledge on verticals not only helps you weigh your option to move to that domain but also helps you compare the industries. In such a turbulent situations, the managers out there want to hire “only the best” who is far beyond excellence. You have to give an impression in the minds of the Recruiter that its you who is cut for the role and nobody else.

4)Reskill and Reinvent: By now, we all know the traditional method of hiring is not the in thing in hiring in turbulent market situations. As a Recruiter, you too have to reskill yourself to reinvent new forms of recruiting. The candidates out there are becoming more and more passive making a recruiter’s job even more aggressive and tougher by the day. Its very important as a Recruiter to bell the cat in finding out what works best in his favour. Hunt for the best resource from the deep caves, which did not exist for many.

Has this Recession led to more Job Offer Declines??

A new trend seen in recruitment during this recession is the increase in the “post-offer declines” from the offered candidates and “pre-offer declines” from candidates when they receive potential offers. A candidate’s reason for declining offers may be their decision to stay back at their present company. While the cause of the same can be easily identified as being due to the recession, here is how candidates may quote this –

-“I’m concerned about possible lay-offs”

-“My job is very secured and I have got good project pipeline in my present company…. I don’t want to take a risk”

As a Recruiter, some of these questions can really put you in a difficult situation to answer when candidates quote some of the examples of their own dear ones losing their jobs. However, there are many ways a Recruiter can turn such cases to successful hires and I believe on the following ones.

1. Help the candidate realise the importance and value of hiring during recession: Of late many candidates ask this question to me as to why are we hiring during recession and I turn this question as an answer to their question. First of all, we should make the candidates understand and realise the importance and value of hiring during recession. Candidates should be given enough information about the roadmap and future of business and also the position they are hired for as to how it can be a possible “recession proof”.

2. Involve Business/Hiring Managers: Asking the Hiring Manager to call the candidate very often after the offer release would definitely help to keep the candidate’s interest level high. Some time candidates may consider Recruiter as more of a job “seller” but their “trust factor” will be more when a hiring Manager calls up the candidate and talk to him.

3. Re-Brief the importance of the role in the company: Re-briefing is very important during a candidate’s post offer to pre-joining phase. Those candidates who are getting interviewed in multiple companies may forget what was explained to them during their interview. The Recruiter should make an attempt to address all queries related to job roles and responsibility.

4. Give personal touch: Perhaps there is nothing better than giving a personal touch to a rapport built with the candidate to avoid offer declines. Add the candidate to social networking sites like Orkut and Facebook, your chat room etc to make him feel more comfortable with the process. Meet the candidate very often both at office and outside, if possible. Apart from being his “career consultant”, talk to him about his personal part of life and make him feel you are not an outsider.

5. Beware of negative candidates/Window shoppers: Don’t be a victim to those ‘window-shopping’ candidates by letting them to make use of your offer to get what they want from their current employer.

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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Worst Recession period expected early 2009

By Symon Ross 

Northern Bank economist Angela

Northern Bank chief economist Angela McGowan expects the worst period of the recession in early 2009, but anticipates some improvement in the economy later in the year.

Ms McGowan predicts that the local unemployment rate of 4.3% is likely to rise to more than 5% by mid-2009.

And with UK economic activity expected to contract by up to 2% next year she believes that Northern Ireland will not escape falling into negative territory.

But she adds that “the forecast contraction for the local economy is not quite as bleak mainly due to Northern Ireland's relatively high level of public sector employment and continuing support for the retail sector coming from our euro neighbours”.

The Northern Bank economist also points out that the economic turbulence of the past year has been met with global policy efforts not seen since the 1930s.

“Although the first half of 2009 on first appearance looks gloomy, an improvement in conditions is expected towards the end of next year.

“This will be the result of the accommodative economic policies, which is the combination of cheap money and a massive fiscal stimulus kicking in. This includes the UK's fiscal stimulus of £20bn of government spending and incentives to encourage domestic spending,” she said.

“Northern Ireland policy makers have also taken up the challenge and found ways and means to deliver a stimulus package for the local economy.

“The £1.2bn devoted to public sector construction schemes and the additional £150m for social housing should go some way to reducing the vast numbers of construction workers unemployed in recent months.”

The spending will simultaneously provide the 21st century infrastructure that the local economy requires for the province to compete when the economic shoots of recovery begin to show, said Ms McGowan.

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