IT Offshore OutsourcingIT Offshore Outsourcing

Jeremie PechmannJeremie Pechmann

Katie RallsKatie Ralls

Tim WahlquistTim Wahlquist

Wensheng QiuWensheng Qiu

Off-Shore Outsourcing ProjectOff-Shore Outsourcing Project

Topics:Topics: Offshore BackgroundOffshore Background IndiaIndia China China BoeingBoeing

What is Offshore IT Outsourcing?

“The exporting of IT-related work from the United States and other developed countries to areas of the world where there is both political stability and

lower labor costs or tax savings.”

Source: Whatis.com

www.seattlepi.nwsource.com/business/164018www.seattlepi.nwsource.com/business/164018

www.searchcio.techtarget.com/qnawww.searchcio.techtarget.com/qna

Why Outsource?Why Outsource?

Quality

Risks Benefits

Time

Cost

WhyOutsourcing

www.offshoreitoutsourcing.com/Documents/it_outsourcing_vendors_evaluationwww.offshoreitoutsourcing.com/Documents/it_outsourcing_vendors_evaluation

Top 5 Outsourcing ObjectivesTop 5 Outsourcing Objectives

12%

29%

35%

91%

85%

0% 20% 40% 60% 80% 100%

De-risk the business

Achieve high productivity

Improved Operational Quality

Reduced Costs

Focus on Core Activity

% Respondents

www.rosourcing.com/trendswww.rosourcing.com/trends

Trends services being Trends services being outsourcedoutsourced

www.mckinseyquarterly.com/article_abstract.aspx?ar=1453&L2=7www.mckinseyquarterly.com/article_abstract.aspx?ar=1453&L2=7

http://commonziffdavisinternet.com/download/0/2216http://commonziffdavisinternet.com/download/0/2216

Researchers Say…Researchers Say…

Meta GroupMeta GroupOffshore outsourcing will grow from $7 billion Offshore outsourcing will grow from $7 billion currently to more than $10 billion by 2005. currently to more than $10 billion by 2005.

Gartner Inc.Gartner Inc.According to Gartner research, 5% of IT jobs have According to Gartner research, 5% of IT jobs have gone overseas, and 25% will be "offshored" by 2010. gone overseas, and 25% will be "offshored" by 2010.

Forrester ResearchForrester ResearchRespondents in a survey of 145 IT decision-makers at Respondents in a survey of 145 IT decision-makers at North American companies rated offshore providers North American companies rated offshore providers better than U.S. firms 67% of the time in terms of better than U.S. firms 67% of the time in terms of quality and timeliness. quality and timeliness.

www.cio.com/qnawww.cio.com/qna

How to OutsourceHow to Outsource

Create a multi-year plan, with Create a multi-year plan, with quarterly reviews that includes quarterly reviews that includes creating, incubating and growing your creating, incubating and growing your development center development center

Choose the location after spending Choose the location after spending time to evaluate and study the pros time to evaluate and study the pros and consand cons

Understand how the local culture Understand how the local culture thinks and behaves thinks and behaves

Take a long term view (5 to 8 years) Take a long term view (5 to 8 years)

www.searchcio.techtarget.com/qnawww.searchcio.techtarget.com/qna

Gartner Picks Best Offshore Gartner Picks Best Offshore DestinationsDestinations

•India

•China

•Malaysia

•Czech Republic

•Singapore

•Philippines

•Brazil

•Russia

OffshoreITOutsourcing.com/vendor_selectionOffshoreITOutsourcing.com/vendor_selection

Vendor SelectionVendor Selection1) Identifying areas that you wish to outsource 1) Identifying areas that you wish to outsource 2) Researching list of vendors you wish to 2) Researching list of vendors you wish to

shortlistshortlist3) Do a thorough analysis of each of the 3) Do a thorough analysis of each of the

vendors for their expertise, financial vendors for their expertise, financial stability, history in executing outsourced stability, history in executing outsourced projectsprojects

4) Internal or external consultants4) Internal or external consultants5) Getting in touch with the short listed 5) Getting in touch with the short listed

companies for a preliminary interactioncompanies for a preliminary interaction

www.wipro.com/aboutus/odc/odcresources.htmwww.wipro.com/aboutus/odc/odcresources.htm

Offshore Venue ComparisonOffshore Venue Comparison

www.idc.com/getdoc.jsp;jsessionid=3SGPQXwww.idc.com/getdoc.jsp;jsessionid=3SGPQX

Offshore Venue ComparisonOffshore Venue Comparison

Today’s SituationToday’s Situation

Many Companies are jumping into Many Companies are jumping into the Outsourcing bandwagon with a the Outsourcing bandwagon with a ‘‘me toome too’ attitude. ’ attitude.

Cost reduction is the main driving Cost reduction is the main driving force.force.

Lack of understanding of local issues Lack of understanding of local issues and culture will cause these and culture will cause these operations to fail.operations to fail.