Offshoring frukostseminarium 20110831

Breakfast Seminar - August 31st, 2011

Presented by:
Daniel Palm

Agenda
• Welcome
• What is Offshoring – Different types of Offshoring
• Reasons for Offshoring
• Top 10 Advice when Offshoring
• Facts about India and China
• Live Conference with BTCG Islamabad
• Disposition of Education

Welcome
Documentation in English,
Presentation in Swedish

Documentation will be provided afterwards

About Daniel Palm

• Have been working with offshoring for about 10 years in India,
Pakistan, China, Thailand etc
• Have managed some 60 offshore projects
• Have worked for Accenture, Capgemini and Ernst & Young
• Resently consulted one of Sweden’s largest banks in
constructing their Asian offshore program
• Is the CEO and founding partner for Business Technology
Consulting Group, BTCG
• Have 5 wonderful children and a lovely wife

When did the outsourcing of IT
services start in modern times?
• The concept was first applied by Ross Perot,
when he founded Electronic Data Systems in
1962. EDS told a prospective client;

"You are familiar with designing, manufacturing and selling
furniture, but we're familiar with managing information
technology.
”We can sell you the information technology you need, and
you pay us monthly for the service with a minimum
commitment of two to ten years."

What is Offshoring and Outsourcing?
• Offshoring describes the relocation by a company
of a business process from one country to
another
• Outsourcing is the practice of hiring an external
organization to perform some business functions
in a country other than the one where
the products or services are actually developed
or manufactured.

• Offshore outsourcing is basically outsourcing
offshore.

Nearshore Offshoring
Destination
Inshoring

Insourcing
Offshore
Multi Destination
Sourcing
Dedicated Team
On-Shore
Outsourcing Bundle Captive Team
Sourcing
Country
Of Origin

Onshore
Processes

Types of Offshoring Offshoring

There are four basic types of offshore outsourcing:

ITO Information Technology Outsourcing
including Software Development
BPO Business Process Outsourcing covers
Processes like running call centers,
processing insurance claims etc
KPO Knowledge Process Outsourcing covers things that require a higher skill set
such as reading X-Rays, performing investment research on stocks and bonds,
handling the accounting functions for a business or executing engineering
design projects.

VA Virtual Assistants - Outsourced administrative work assignments

Offshoring to a Virtual Assistant

What can a VA do?
Creation of Presentation
Market Analysis
Writing Reports
Web administation
Blog posts
Article writing
Article search enging submission
Web Account Creation
Content Outsourcing
Data Entry
Directory Submission
Web Forum Posting
Answering email
Call center
Customer Service
Search Enging Submission
Social Media Marketing
Video Submission

IT Leading as Most Active
area of Outsourcing
IT

21% Human Resource
28%
Sales & Marketing
9%
Finance

11% 16% Administration
15%
All Other

Källa: Offshore IT Outsourcing, 2010

Why would a firm want to offshore?

Why would a firm want to outsource?

Top 10 Reason Companies
Chose to Offshore
Reduce and Control Operating Costs
Improve Company Focus
Gain Access to World Class Capabilities
Free Resources for Other Purposes
Resources Not Avaliable Internally
Accelerate Reengineering Benefits
Reduce Time to Market
Take Advantage of Offshore Capabilities
Share Risks
Function Difficult to Manage

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

Source: Tutorial-Reports 2010

Approach for country selection

10 Reasons Why Offshore Outsourcing Projects Fail,
and How to Avoid Making the Same Mistakes
1. Bargain Shopping - Most companies will first want the best quality from
the lowest cost service provider. A company must not select a service
provider on cost alone; it should also take into consideration the people,
processes, and technology. A company should check the track record of
the service provider before finalizing the deal.
2. Lack of Communication - Outsourcing software development requires a
lot of internal communication for smooth operation. Offshore
development will rarely have any on site monitoring, so it is vital to have
clear communication daily
3. Offshore Destination Security - Some countries on the global front do
not have political & economical stability. There are high security threats
that can overthrow any governing laws in a matter of just a few days. If
your service provider does not have proper security measures then a
company faces high risk of project failure.

4. Inadequate Planning & Expectation Matrix - Offshore
development will fail if a company does not have a proper plan in
place in order to manage processes. Also the service provider
should know the expectation matrix on quality and timeline
procedure
5. Transition Management - Test projects are not a clear indication
of how your offshore development will actually be delivered.
Focus on detailed reviews, workflows, and functions.
6. Cultural Factors - Offshore development projects are bound to run
into misunderstanding or language interpretation problem. Select
a vendor who is well balanced in his professional attitude.
7. Complex Contracts - Simple and short contracts preferably for a
year will serve you best. Contracts that are complex in litigation
will create dissatisfaction over a long period of time.

8. Support Availability - Offshore development requires a
continuous online support through out the project
duration. Without adequate support, it will be difficult to
resolve the problems with accuracy.
9. Infrastructure - Outsourcing software development will
fail without the support of ideal infrastructure that is
equipped with the latest technological instruments.
10. Disaster Recovery - A service provider without a strong
disaster recovery plan will jeopardize your entire project.
In case of crisis, he must be able to store and back up
your project data for an uninterrupted project delivery.

Did you know that India…
1. …completed hundreds of thousands of US
income tax return bills
2. …there are about 1 100 persons just like you
3. …28% of the collected IQ is higher than all the IQ
in the USA
4. …’s life length and children per family is soon like
the western world
5. …is the second largest muslim country
6. …has the world’s best management educations
at the moment

India
Advantages Challenges
• Well established High Speed • Physical Infrastucture
Internet Infrastucture • Complicated tax system
• Anglo-Saxon Law system • Bureaucratic
• English speeking • Aging population
• Relative highly educated • High Employee Turnover
• Inexpensive labor cost • Price Discrimination is
• Some taxfree zones unknown

Did you know that China…
• … has over 350 million Chinese which lives above
western standard of living
• … has more English speaking persons then in all of USA
• … has 50 000 000 students of classical piano playing.
• …has more than 160 cities larger than Stockholm
• …has 1 300 persons just like you
• …has 20 000 characters. The average Chinese person
learns only about 5 000 of these in his lifetime.

China
Advantages Challanges
• Inexpensive labor cost • Language
• Decent infrastracture, • Aging population
especially harbours • Bureaucratic
• Good industrial engineering • Politically governed
• 450 000 engineering students • Environmental effects
graduate from Chinese • Chinese new year – Staff turnover
universities every year • Corruption in all markets
• Tradition of international trade • Clan culture
• Large domestic market

Live conference with BTCG Islamabad

Utformning av kursen
• Block 1 Översikt av Offshore-marknaden, Magnus Penker
– Historik, Begrepp och termer
– Omfattning, struktur, tillväxt och drivkrafter
– Analys av leverantörer, relevanta nyckeltal, varningssignaler
– Kriterier för urval, Marknadsbevakning
– Nätverk av kontakter, Olika samverkansformer: Onsite, Offsite, Blended
– SmartSourcing Modellen

• Block 2 Business Case, Mia Nilsson
– Projekt, dedikerat team eller BPO?
– Din kärnverksamhet
– Vad är lämpligt att lägga på offshore?
– Planering, kalkylering och budgetering av offshore-projekt
– Vad är en bra affär? Kort och lång sikt? Break-even och ROI
– Intellektuella och kommersiella rättigheter
– Säkerhet
– Riskanalys: Finansiellt, legalt och verksamhetsmässigt
– Hur ett business case sammanställs, presenteras och säljs in

• Block 3 Offshore & Kommunikation, Per Dahl
– Trender
– Kommunikation som stärker ditt varumärke
– Den kulturella kontextens inverkan på de kommunikativa utmaningarna
– Förändringskommunikation
– Ledningens och organisationens mognad och öppenhet
– Vilka är skillnaderna, utmaningarna och det gemensamma med vanliga Offshoring-länder ?
– Vem driver ditt förändringsarbete? Ledning eller nedifrån?
– Hur du lär dig att kommunicera och coacha internt så väl som offshore
– Utmaningar för din egen organisation
– Lära och träna din egen organisation

• Block 4 A central offshoring organization within
IT organization with responsibility for, Rita Fernandes
– Sourcing strategy
– Change management
– Vendor management
– Infrastructure
– SLA & KPI
– Mentorship
– Processes, routines, best practices and lessons learned

• Block 5 Projektstyrning, Johan Olander
– Projektmetoder som fungerar
– Arbetsprocesser
– Agile offshore – utmaningen
– Direkt ledning av team
– Koordinering av många inblandade parter
– Kommunikationsverktyg: Från MSN, Skype, e-mail till fullvärdiga videokonferenssystem
– Ticketsystem, versionshantering samt acceptanstest
– Offshoring Governance Model
– Audits och leverans-KIP:er

• Block 6 Juridik, Konflikthantering och Examinering, Jurist och Daniel Palm
– Vad kan gå snett och varför?
– Jurisdiska system, lagrum och praxis
– Tidiga varningssignaler
– Hantera utmaningarna i tid
– Förebygga och hantera rättsliga efterspel
– Avslut och avveckling av offshore-projekt
– Att ta offshoring av projekt till nästa nivå med dedikerade team , BPO och BOT
– Presentationer av grupparbeten
– Examination och certifiering

En Certifierad Offshore Manager kan:
1. identifiera och analysera lämpliga projekt, funktioner och processer för offshoring
och outsourcing
2. överblicka och omvärldsbevaka marknaden för outsourcing och offshoring
3. analysera och utvärdera leverantörer på denna marknad
4. ta fram och presentera business case som redovisar affärsnyttan
5. analysera och bedöma risker
6. förstå andra kulturer och kommunicera med uppdragstagare i främmande länder
7. förhandla och upphandla ett offshore-uppdrag, med komplexa pris- och
affärsmodeller
8. tolka avtal för upphandling
9. hantera praktiska aspekter kring personalfrågor
10. leda offshore-projekt, med rätt projektmodeller och verktyg
11. identifiera varningssignaler för problem och hantera konflikter
12. lyfta offshoring till nästa nivå med dedikerade teams, outsourcing av processer
eller funktioner samt hantering av business operation transfer

Erbjudande till kurs deltagare
• De 12 st första som anmäler sig till kursen
kommer att få tillgång till en Offshore Virituell
Assistent under 40 timmar – Gratis

• Om intresse föreligger:
– Studieresa till Offshore land/länder 2012

Offshoring frukostseminarium 20110831

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