2. A P r o j e c t b y -
M E G H A K U S H W A H A
P R I Y A C H H A B R A
A I S H W A R S H A R M A

3. “The future shape of business is
being redefined through
outsourcing”

4. 4 © 2005 Accenture All Rights Reserved.
WHAT IS OUTSOURCING ?
Outsourcing denotes the continuous
procurement of services from a third party,
making use of highly integrated processes,
organization models and information systems.
OUTSOURCERCOMPANY
Services
Organization
Level
Agreement
Service
Level
Agreement

5. WHY DO COMPANIES OUTSOURCE
Reduce and control operating costs
Improve host company focus
Gain access to world-class capabilities
Free internal resources for other purposes
A function is time-consuming to manage or is out of control
Insufficient resources are available internally
Share risks with a partner company

6. REASONS FOR
OUTSOURCING

7. WHAT CAN BE OUTSOURCED
?
system integration
data network
mainframe data center
voice network, internet/intranet
maintenance/repair
applications development
e-commerce
end-user support system

8. TYPES OF OUTSOURCING
Business process outsourcing (BPO)
•involves the contracting of the operations and responsibilities of specific business functions to a third-party service
provider.
Engineering process outsourcing (EPO)
•playing crucial role in efficiently supporting dynamic architecture, engineering and construction industries
worldwide.
Information technology outsourcing or ITO
•is a company's outsourcing of computer or Internet related work.
Knowledge process outsourcing (KPO)
•describes the outsourcing of core business activities, which often are competitively important or form an integral
part of a company's value chain. Therefore KPO requires advanced analytical and technical skills as well as a high
degree of proprietary domain expertise.
Legal outsourcing
•refers to the practice of a law firm or corporation obtaining legal support services from an outside law firm or legal
support services company
A third-party logistics provider (3PL)
•is a firm that provides service to its customers of outsourced (or "third party") logistics services for part, or all of
their supply chain management functions.

9. ADVANTAGES OF
OUTSOURCING
Low Operational
Cost
Low Labor and
Technology
Superior
Technology
Risk Mitigation
Capacity
Management

10. PROBLEMS WITH
OUTSOURCING
Loss of Control
Increased cash outflow
Confidentiality and
security
Selection of supplier
Too dependent on
service provider
Loss of staff or moral
problems
Time consuming
Provider may not
understand business
environment
Provider slow to react to
changes in strategy

11. INTRODUCTION
OUTSOURCING IN INDIA
Outsourcing
of
manufacturin
g started in
1700
Outsourcing
of services
started in
1980
Earliest
players in
Indian
outsourcing
market were
TEXAS
INSTRUMENT,
AMERICAN
EXPRESS,
SWISSAIR,
BRITISH
AIRWAYS, GE
Global
software
giants like
MICROSOFT,
ORACLE, SAP
and many
other have
established
captive
development
centers in
India.
Indian
companies
too have
aligned their
internal
processes and
practices in
International
Standards
such as ISO,
CMM, SIX
SIGMA etc
In 2008, a
study listed 6
Indian cities
of Bangalore,
Chennai,
Delhi-NCR,
Hyderabad,
Mumbai, and
Pune, among
the world's
top 10
outsourcing
destinations

12. PROBLEMS WITH OUTSOURCING TO
INDIA
•Smaller firms are currently experiencing attrition of 100%+ per
year
High attrition a significant
drag on productivity
•Projects have reported that more than 75 percent of these
global IT initiatives fall short of expectationsQuality of the Work
•Indian firms (and their court system) have historically been
notorious for their lax approach to protecting their customers’
source code and in turn calling it their own.
Significant IP risk
•Norm in India today is up to 20% pay increases every 6 months
– that translates into 45% wage escalation per year!!Cost
• the Indian work approach requires very detailed
specifications with no room for interpretation.Work style
• India has historically focused on IT (vs. software product).
Talent base

13. WHY OUTSOURCE TO INDIA
Availability of qualified
resources – industry
standard certification
Lateral knowledge
skills – technology and
business skills
Better tax structures
and tax holidays - SEZ
Cost and quality
arbitrage
Enthusiastic and
young population
Economy on the
growth path – GDP
Strong and ethical
Entrepreneurs

14. OUTSOURCING- A BOON OR A
BANE FOR INDIA
Indian companies offer a
wide variety of outsourced
services. Outsourcing to
India has been a
satisfactory and profitable
experience for most
companies around the
world.
Indian outsourcing
vendors have
continuously adapted to
internal and external
challenges and the credit
for this goes to Indian
outsourcing companies
and the successive
enabling governments
Great number of jobs are
created
Only left over work comes
to Indian software
industry, which is labour
intensive and does not
require brain or enhances
skills of the personnel.
Indian society has
received with the advent
of outsourcing. Youth is
moving away from our
culture and values..The
gradual intellectual
incapability and
complacency is creeping
into the youth of the
nation.
In future India can
witness huge number of
school dropouts which
would in turn affect
Indian economy in many
ways.

15. CONCLUSION
Outsourcing For India Is A Boon
Because It Has Strengthen The Indian
Economy, But There Are Some Societal
Issues Related With Outsourcing
Which Can Makes It A Bane.
Outsourcing being a boon or a bane,
the decision lies with how we look at it
and how it is channelized in our
society.

16. OUTSOURCING IN USA
Introduction
 Initially, a lot of outsourcing was to other American firms; later it involved
moving production to foreign countries. Many companies rushed to spin
off all but their most essential “core” activities.
 Today, some of the world’s largest companies and biggest employers are
the product of this outsourcing trend:
 Sodexo in food service;
 IBM in information technology;
 Wackenhut, now known as G4S, in security services;
 UPS and FedEx in logistics;
 Foxconn and Lenovo in computer manufacturing.
 Instead of the Rouge plant, the new model of industrial organization
has become Nike, which outsources the making of all of its shoes,
clothing and sporting equipment so it can concentrate on design and
marketing.
 Apple, outsources all of its hardware manufacturing.

17. Has outsourcing production and manufacturing to low-
wage countries helped or hurt the United States?
In the United
States,
outsourcing is
considered a bad
word.
American
workers, with
their technical
expertise and
widely-available
Internet
infrastructure,
are highly
desired.
Many critics
argue that
outsourcing has
been overhyped
and that it is
difficult to
quantify its costs
and benefits.
The United
States does not
have a
comparative
advantage in
manufacturing
because of high
wages and a
relatively strong
dollar (although
the dollar has
been on the
decline in recent
months).
Slogans like “Buy
American” have
been popular
rallying cries for
years, and many
people bemoan
the outsourcing
of jobs to low-
wage regions like
Asia and Latin
America.

18. US PRESIDENT BARACK OBAMA AND REPUBLICAN
PRESIDENTIAL NOMINEE MITT ROMNEY MET IN HEMPSTEAD,
NEW YORK TUESDAY EVENING FOR SECOND OF THREE
PRESENTIAL DEBATES. ONE OF THE QUESTIONS WHICH WAS
ASKED FROM BOTH OF THEM WAS, “THE OUTSOURCING OF
AMERICAN JOBS OVERSEAS HAS TAKEN TOLL ON OUR
ECONOMY.WHAT PLANS DO YOU HAVE TO PUT BACK AND
KEEP JOBS IN US?”

19. ANSWER
ROMNEY’S
ANSWER
Want to cut down tax rates on small business, big
employees so they want to be there in US
China has become a currency manipulator and
thus US manufacturers can’t compete with them
OBAMA’S
ANSWER
Lower corporate tax
As far as currency manipulator is concerned, the
currency has gone up by 11% & have put trade
burden on China that why exports increase in US
and this will help in creating jobs in US
Mentioned that reduced rate of tax paid will
create 8,00,000 new jobs but in China, India,
Germany

20. There are two sides to every issue:
1. Outsourcing hurts America by sending
jobs overseas.
2. Outsourcing helps America by
allowing goods to be produced more
cheaply, with savings being passed on
to consumers.

22. For the short term the country whose companies are
outsourcing may see it as a shortcoming. But in the
long run, the economy will be booming again. Thus
to conclude, even if the outsourcing industry may
seem to be a disgrace to the market, in the long
term it is going to be the significant market share
contributor. The seeds have been sown and the
flowers are blooming, the fruits are not far to be
reaped.

23. THANK YOU