by Olha Moroz Delivery Director SoftServe Poland Outsourcing for Buyer Talents expertise Price Hiring and staffing speed Free own resources Less attention to support Less control Communication ID: 632644
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Slide1
The evolution of IT Outsourcing - why trusted partnership matters?by Olha MorozDelivery Director, SoftServe PolandSlide2
Outsourcing for BuyerTalents, expertisePriceHiring and staffing speedFree own resources
Less attention to support
Less
control
Communication
can cause problems
Language barrier issues
Security issuesSlide3
Factors to consider
Quality
Price
Taxes
Reputation
Business culture compatibility
Location
Understanding goals
Constant management of the business relationship
Well-written contracts
Strong communication
Language
Labor pool's skill and size
Security and privacy
Local education systems ability to support the labor pool
Legal culture and stability of a countrySlide4
Outsourcing for SellerIT outsourcing: from infrastructure to software development, maintenance and supportNon-
c
ore/Non-
s
trategic business elementsNo visibility on products roadmapDifficult to get product ownershipSlide5
Maslow's hierarchy of needsSlide6
Types of business modelsSlide7
F
rom FTE
To outcome based:
- business goals
- tangible metrics
- for user
Evolution of outsourcing pricing modelsSlide8
What clients need?Link the benefits of procuring IT services from third party providers to the realization of business objectivesSlide9
Output and Outcome based service delivery and commercial models (Cognizant)Slide10
Managed Service modelManagement responsibilitiesBOT modelVASSlide11
VerticalizationMany clients are looking for more vertical expertiseSlide12
Technical Product Management
Product strategy
Release
planning
Technology
selection
Backlog creation
End-to-end UI design
Execution ownership
Influence on decision making
Customer representativeSlide13
Contract
Contract type
Team distribution
Contract duration
Renegotiation
Model based pricingSlide14
Multiple vendors
Competing vendors
Access to internal information
Shared goal and agreementsSlide15
Access to client’s internal environment
Infrastructure
Procedures and Policies
Alignment on management levelSlide16
The Sourcing Decision Becomes Data-DrivenSlide17
Crowdsourcing
Idea
generation
D
esign for a prototypeTalent
Quick feedback
Low cost
No
management
MarketingLow risk
QualityLack of Motivation
Keeping SecretsEthical, LegalWho is the owner?Slide18
More Automation, Less Cheap Labor in IT outsourcing
Cloud and virtualization
R
obot-like technolog
iesMore human
judgement and
experienceSlide19Slide20
Indian providers are stepping up
Low cost
English
Big population
Tata Consultancy Services, Infosys, Wipro, HCL, Tech Mahindra
Labor turnover
“Yes Sir” culture
More management
Time ZoneSlide21
Eastern EuropeQuality vs Quantity - the benefits of outsourcing to Eastern Europe
The availability of a highly educated
workforce
Business culture
Cultural similaritiesTime zonesLow attrition ratesSlide22
NearshoreDomestic sourcing is a plusPredictability in political situationLanguage, culture, time zoneSalaries management
No need in
H-1B and L1
visas
Similar legal regulationsSlide23
Factors to consider
Quality
Price
Taxes
Reputation
Business culture compatibility
Location
Understanding goals
Constant management of the business relationship
Well-written contracts
Strong communication
Language
Labor pool's skill and size
Security and privacy
Local education systems ability to support the labor pool
Legal culture and stability of a countrySlide24
Factors to consider
Quality
Price
Taxes
Reputation
Business culture compatibility
Location
Understanding goals
Constant management of the business relationship
Well-written contracts
Strong communication
Language
Labor pool's skill and size
Security and privacy
Local education systems ability to support the labor pool
Legal culture and stability of a countrySlide25
Factors to consider
Quality
Price
Taxes
Reputation
Business culture compatibility
Location - onsite
Understanding goals
Constant management of the business relationship
Well-written contracts
Strong communication
Language
Labor pool's skill and size
Security and privacy
Local education systems ability to support the labor pool
Legal culture and stability of a countrySlide26
Factors to consider
Quality
Price
Taxes
Reputation
Business culture compatibility
Location
Understanding goals
Constant management of the business relationship
Well-written contracts
Strong communication
Language
Labor pool's skill and size
Security and privacy
Local education systems ability to support the labor pool
Legal culture and stability of a country
Product Ideation
Innovative Solutions
Value added services
Subject matter expertise
Domain, market, competitors knowledge
End user representative
Data as an asset
Shared goals and outcomesSlide27
Popularity of outsourcingSlide28
Expenses on outsourcingSlide29
TrendsMore than 2.4 million jobs outsourced from the US in last 10 years28% of whole outsourcing is ITLarge companies continue to be the leaders in outsourcing, spending a median average of 7.8% of their IT budgets on it
Application
hosting is the most popular function to outsource, with 62% of
organizations
doing itIT security outsourcing is increasing 48% companies plan to hire more outsourcers than full time employees in next 12-18 monthsOffshore outsourcing to grow by more than 20% annuallySlide30
Trusted Partnership