of 3 - Center for Global Outsourcings

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Research Method For the purpose of the research models for hypotheses testing first, a sample of companies for the last two decades is used. Then, similarly the models are estimated for sample companies in different industrial groups. Market research is done using specialized associations and company information sources. Hypotheses Testing H1: The association between returns and comprehensive outsourcing is stronger in offshore context. The most common outsourcing forms are information technology outsourcing (ITO) and business process outsourcing (BPO). Business process outsourcing encompasses call center outsourcing, human resources outsourcing (HRO), finance and accounting outsourcing, and claims processing outsourcing. Dominant outsourcing service providers in the information technology outsourcing and business process outsourcing fields include IBM, EDS, CSC, HP, ACS, Accenture and Capgemini. Some companies, such as start-up software publishers, apply multi-sourcing -- using both internal and service provider staff -- in order to speed up the time to launch. The process of outsourcing generally encompasses four stages: 1) strategic thinking, to develop the organization's philosophy about the role of outsourcing in its activities; 2) evaluation and selection, to decide on the appropriate outsourcing projects and potential locations for the work to be done and service providers to do it; 3) contract development, to work out the legal, pricing and service level agreement (SLA) terms; and 4) outsourcing management or governance, to refine the ongoing working relationship between the client and outsourcing service providers. In all cases, outsourcing success depends on three factors: executive-level support in the client organization for the outsourcing mission; ample communication to affected employees; and the client's ability to manage its service providers. The challenges of outsourcing become especially acute when the work is being done in a different country (offshored), since that involves language, cultural and time zone differences. The McKinsey Global Institute estimates $18.4 billion in global IT work and $11.4 billion in business-process services have been shifted abroad so far -- just one-tenth of the potential offshore market. Over the past few years, many banks are moving to this trend. For example, Barclays Bank, one of the world's top 25 banks, has expressed a commitment to offshoring over the past years. In 2009, it announced that it would cut almost 2,000 technology jobs, including high-level positions, in the U.K. and move them to Singapore, India and Hungary. However, achieving economies of scale is one of the most commonly over cited reasons for IT outsourcing. H2: There is a significant association between outsourcing and human resources management. The offshore shift of skilled work has been portrayed as the killer of good-paying jobs. Firms exploit the low wages of poor nations. College grads in India, China, and the Philippines are willing to work twice as hard for one-fifth the American pay. The changes are harsh and deep. But many executives are discovering offshoring is really about corporate growth, making better use of skilled U.S. staff, and even job creation in the U.S., not just cheap wages abroad. The new attitude is emerging in corporations across the U.S. and Europe in virtually every industry. Tenth Annual International Daejeon, South Korea P a g e | 16 Smart Sourcing Conference June 28-29, 2012
In this way Big Business is on the cusp of a new burst of productivity growth, ignited in part by offshore outsourcing as a catalyst. Manufacturers and tech companies are learning to capitalize on global talent pools to rush products to market sooner at lower costs. To recruit a great engineer in Silicon Valley on average takes three months. With offshoring you pick up the phone and get somebody in two or three days. H3: There should be natural limits to outsourcing opportunities. Futurists have envisioned "hollow" and "virtual" corporations since the 1980s. It hasn't happened yet. Reengineering a company may make sense on paper, but it's extremely expensive and entails big risks if executed poorly. But as companies work out such kinks, the rise of the offshore option is dramatically changing the economics of reengineering. Natural limits to outsourcing are real but with the time being could become virtual ones. So, IT is the back-office process most commonly outsourced by financial services organisations, followed by call centres and then HR. Other industry specific processes commonly outsourced include claims, transaction (e.g., credit card, equity trading) and back office processing activities. Later further developments in IT industry would allow a full integration of local and outsourced activity. Success in the Financial Services (FS) industry lies in the ability to improve business agility and to alter working practices. Even though FS is still facing uncertain times, one thing is very likely, important partnerships with outsourcers will soon become the de facto practice across the industry. H4: Outsourcing market should have positively growing trend. Creative new companies can exploit the possibilities of offshoring even faster than established players. Some aggressive outsourcers are using their low-cost, superefficient business models to challenge incumbents. Still smart use of offshoring can juice the performance of established players, too. Financial service outsourcing deals increased 24% from Q4 2010 to Q1 2011. This increase across all segments of the BFSI (Banking, Financial Services and Insurance) industry is due to a decrease in restructuring activity and enhanced focus on implementation of growth strategies. Outsourcing activity has been upbeat in 2011. The insurance sector experienced a significant surge in outsourcing deals, with a 57 increase from 14 in Q4 2010 to 22 in Q1 2011. Life and health insurance and property insurance accounted for approximately 70 of these deals. The capital markets sector registered a 37% growth in outsourcing deals after having suffered a 46% drop in Q3 2010. More than half of the deals within capital markets occurred within investment and wealth management firms and stock exchanges. Deals within the banking segment rebounded to Q3 3010 levels. Overall deals within the banking sector increased by 13% in Q1 2011. The Results of Testing Hypotheses and Concluding Remarks Collectively, our results provide some evidence confirming the association between returns increase and intensity of outsourcing especially in offshore context. Association between outsourcing and human resources management in most cases shows reduced needs in local staff. Outsourcing opportunities of a company in most cases are not limitless. Still in some cases the existence of a totally disaggregated corporation, viz. outsourcing the most of its operations is quite possible. Outsourcing market is growing dramatically. References will be available on request. Tenth Annual International Daejeon, South Korea P a g e | 17 Smart Sourcing Conference June 28-29, 2012
Page 1 and 2: 2012 Global Sourcing of Services: B
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Page 15 and 16: Contemporary Issues and Challenges
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AN EXAMINATION OF CAPABILITY, QUALI
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H7: IS vendor’s partnership quali
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Annual Global Outsourcing Quiz Bowl
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Introduction The rapid development
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References 1. Bartram, S. M., Brown
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Introduction Comparing with other s
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Introduction Taiwan’s economy is
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Abstract Issues and Challenges with
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Often, however, feasibility studies
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Attendee List (Page 1 of 3) Name Ro
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