outsourcing reference

1

OFFSHORE OUTSOURCING

By Marcus Mitchell

Christopher Shy

Joe Willis

Laura Reiter

Thipsuda Chanlertfa

2


Introduction

Case Study – Cognizant

Case Study – DFS Galleria

Conclusion

Case Study – Lincoln Industrial

Case Study – Exult

3


Introduction

•  Began in 1970s with U.S. computer manufacturers

hiring technical staff from India for service centers

(initially to save costs).

•  India developed skilled base of technologists

(understand wide range of ops systems and service

a variety of hardware).

Reference 1

4


Pros of the Trade

•  Cost savings – up to 80 percent

•  More resources = attention to core competence,

design and business knowledge

•  Offshore needs meet with competence

•  Demand for temporary work and consulting met

•  On-demand, at short notice, without commitments

Reference 2

5


Cons of the Trade

•  Communication due to language/cultural barriers

•  Time differentiations

•  Technical/skill mismatches

•  Quality discrepancies/lack of repeatable process

•  Security issues

•  Bad management/hierarchical stubborn organizations

Reference 2

6


Not Just India

Meeting growing demands for inexpensive yet

competent programming talent:

•  China

•  Philippines

•  Russia

Reference 3

7


Just India

•  Most mature here

•  Holds 85-90 percent of offshore outsourcing

market today

•  Maturity due to government support for past

decades and their continued improvements of the

education system built by the British

Reference 4

8


In 2003: 5% of the US IT services market is operating offshore

300 of Fortune 500 have a relationship with an Indian IT service firm 360,000 US jobs moved offshore $7 billion dollar market In 2005:15% of US workforce (2 million) will move offshore.

$10 billion market In 2007: $15 billion market By 2015: 3.3million US jobs and $136 billion in wages will

transfer offshore.

Size of Market

Reference 17

9


Market Trends

In 2001: Forrester Research found 12% of IT budgets offshore, estimated to be 28% of IT budgets by 2003 (based on interviews with 50 IT executives and survey of 145 IT Directors).

In 2001: Forrester Research found that 44 percent of US firms with more than $1 billion in sales performed IT work offshore, estimated to be 67% by 2003.

In 2003: Deloitte Research found that 33% of Global Financial Institutions already sent IT work offshore.

75% will move work offshore within next 24 months. Reference 18

10


In 2003

Canada

Mexico India

Brazil

EU Russia

Israel China Japan

Philippines Singapore

Australia

In 2003: 95% of US Offshore IT sourcing activity is taking place in these nations:

Reference 19

11


Global IT Spending in 2000

Service Line Market Size (US$ Billion)

India Export Revenues

India’s Market Share

Custom Application Development

Application Outsourcing

Packaged Software Support

Systems Integration

IT Consulting

Network Management

Total

$18B

$11B

$41B

$72B

$19B $20B

$181B

$2.5B

$1.7B

$.3B

$.15B

$.05B

$.05B

$4.75B

13.6%

15.8%

.7%

.2%

.3%

.3%

Reference 20

12


Scale of Leading Offshore Venues (2001)

Average IT Labor Cost per Year

Estimated # IT employees

China

India

Ireland

Israel

Malaysia

Mexico

$8,952

Philippines

Russia

Estimated # Software companies

$5,880

$34,000 $38,000

$7,200

$1,400

$6,565 $7,500

5,000

900

750 400

1,000 1,000

200,000

415,00

23,000 35,000

290,000 8,000

Reference 21

13


Thus, Labor Arbitrage is Driving Force,

•  More expensive to contract •  Higher transportation costs •  Higher management costs (on site vendor staff

and in-house project management) •  Poor communication •  Cultural differences •  Lapses in technology infrastructure

But labor savings will be offset by higher transaction costs:

14


Offshoring

Offshoring, a key element of Global Sourcing, can yield significant benefits... Thus,

Cost Savings Realized

19% 33%

38% 10%

0% 10% 20% 30% 40% 0-10%

31-50%

Quality Improvement

27% 41%

25% 7%

23% 38% 39%

0% 10% 20% 30% 40% 50% Significant Improvement

Some Improvement Unchanged

Somewhat Decreased 2002 2003

What Drives Offshoring?

94%

51%

63%

32%

92%

41%

41%

32%

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

Cost

Improving Quality

Accessing Skilled

Resources Reducing

Cycle Time

2002 2003

What Drives Offshoring?

15


Offshore Outcomes

Very Effective

Effective (Meeting Goals & Objectives)

Somewhat Effective (Meeting Some Goals and Objectives)

Too Early to Tell Survey by A.T. Kearney, Respondents asked 100 Financial services Executives about the Effectiveness of their Offshore initiatives

93% of respondents expect offshore outsourcing to reduce costs

32%

18% 9%

41%

Reference 22

16


Offshore Cost Savings

Survey by IBM Consulting Services, Respondents asked percentage of savings from offshore outsourcing of IT services and software development

US Companies charge $80 to $120 per hour for programmers Offshore providers charge about $40 per hour

More than 50%

Less than 10%

Ten to 30%

Thirty to 50%

40%

42%

9% 9%

Reference 23

17


Offshore Quality Improvement

Unchanged

Some Improvement

Significant Improvement

Some Decrease

7% 25%

27%

41%

Survey by IBM Consulting Services, Respondents asked Level of quality change After offshore outsourcing of IT services and software development

Reference 24

18


Offshore: The Quality Issue

69 73 World

Level 5 Level 4 46 28 India

1 0 (2) Russia 2 0 China

Number of SEI Capability Maturity Organizations Countries

Out of the top 400 companies, more than 272 Indian companies have already acquired ISO 9000 or SEI level 2 or other equivalent certification

Reference 25

19


Offshore: The Quality Issue

69 73 World

Level 5 Level 4 46 28 India

1 0 (2) Russia 2 0 China

Number of SEI Capability Maturity Organizations Countries

Company: Annual Revenues Tate Consultancy Services $689m Wipro Technologies $661.7m Infosys Technologies $413.9m Satyam Computer Services $308.2m Cognizant Technology Solutions $177.8

Top 5 Indian Vendors

Reference 26

20


IT Activities Moving Offshore

Percentage of Respondents

Application Design And Development

Application Maintenance Software Testing IT Consulting

Legacy Transformation Application Outsourcing Contact Centers Infrastructure Management

Packaged Application Implementation

Data Integration & Cleansing Transaction Processing

BPO Data Centers

0 10 20 30 40 50 60 70

Study of 42 Current Offshore Users By Gartner Group

Reference 27

21


Most Important Vendor Selection Criteria

Study of 42 Current Offshore Users By Gartner Group

0 1 2 3 4 5 6 7

Vendor Maturity

Cost

Quality of Resources

Speed of Delivery

Project Management Capabilities

Business Process Expertise

Certifications

Full Outsourcing Capability

Significant Presence in US

Multivendor Capabilities

Near-shore Capabilities

Not Important

Extremely Important

Reference 27

22


Respondents indicated interest in exploring new business models

Captive Joint Venture Build-Operate-Transfer (BOT)

n  More complex to set up

n  Moderate investment

n  Opportunity to share reward

n  Local knowledge of the JV partner helpful

Facilities Management

n  Highest investment

n  High management commitment

n  Potentially high risk if no local knowledge

n  Greatest opportunity to realize value

n  Potential to insource

Outsourced

n  Requires robust vendor management

n  Heavy management focus in the multi-vendor model

n  Opportunity to employ Best of breed providers

Firm’s own offshore “shared service center. Examples include GE, American Express and HSBC.

An offshore center with joint ownership of the firm and a third party

An offshore center built and operated by a third party for a finite time period after which the ownership transfers to the client firm. n  Helpful when a

firm wants to retain control but lacks local knowledge

n  Also appropriate when vendors lack domain experience

n  Opportunity to realize value as a “captive” facility

An offshore center fully owned by the firm; facilities management (real estate, security, transportation, cafeteria, etc.) provided by a third party . n  Helpful when a firm wants to retain control but lacks local knowledge

n  Also appropriate when vendors lack domain experience

n  Opportunity to realize full value as a “captive” facility

Popular choice for low-end business processes or contact centers. Could have ttwo or more vendors and multiple countries

“Extended Organization”

23


Which US companies are moving IT work offshore?

•  British Airways •  MasterCard •  GE •  British Telecom •  GM •  Ford •  American Express •  Xerox •  World Bank •  America Online •  Procter & Gamble

Non-IT Companies: IT Companies: •  Accenture •  Microsoft •  Intel •  EDS •  IBM

24


Leading the Way:

Infosys

Wipro

Cognizant

Today’s Companies

25


Current Trends

•  Increasing acceptance of value and viability of

using remote programming resources.

•  Companies continue to refine their approach to

global sourcing.

Reference 7

26


Outsourcing Futures

•  Offshore outsourcing will grow. (At least 25 percent in 2003)

•  U.S. - based outsourcing and consulting firms will increase offshore resource pools.

(By increasing offshore partners or existing facilities)

•  India will continue to dominate. (Indian vendors will look offshore for even cheaper help)

•  Indian vendors will continue to move up the value chain.

(By offering architecture, design, development and technology strategy services)

Reference 7

27


Outsourcing Futures (Continued)

•  Business process outsourcing in India will grow at least 65 percent during 2003. (Given the cost benefits and early successes of Indian

IT-enabled service outsourcing)

•  Companies continue to focus on contingency plans for offshore vendor relationships.

(New processes and workarounds to ensure safety of their clients’ systems in the event of

communications outage or bombing in India)

Reference 7

28



•  Fortune-class companies will require vendors to have mature processes in place before they engage.

(Process maturity equals quality)

•  Companies will increase investments with offshore service providers, even first timers.

(In the past - pilot projects were small; in the future – comfort and confidence will increase initial deals)

Reference 7

29



•  Companies will put in place centralized program management offices or governance structures to manage, monitor or consult on offshore outsourcing relationships at the corporate level

(Today – companies often have multiple offshore relationships with multiple vendors within

different business units or groups)

Reference 7

30


Concepts of the Past 25 Years

The evolution of

the generations

31


First Generation:

•  Syntel and Tata – main suppliers of technical

personnel.

•  In the end – minimal cost or value impact.

Staffing

Reference 1

32


Second Generation:

•  Tata and Wipro – providers

•  Totally cost-focused

•  Suffered from usability and quality issues

Offshore

Reference 1

33


Third Generation:

•  Cognizant and Infosys – Today’s dominant

players.

•  Technical-focused with high quality outcomes

and resourcing flexibility.

On–site/Offshore

Reference 1

34


Fourth Generation:

On–site/Offshore and Business Transformation

•  Cognizant – with its u.s. and European market

base in conjunction with large development

facilities in India; pioneer and definer of the

fourth generation.

Reference 1

35


The Fourth Generation:

Transformation

and

Corporate Executives

Reference 5

36


Transformation:

Efficient Execution •  Requires close partnership-based relationship

between client and service provider

Conceptual Shifts •  Moving from technical to strategic

•  Treating vendors as colleagues rather than

contractors

•  Outcome focused instead of activity focused

Reference 5

37


The Fourth Generation

•  Allows corps to focus more on the customer and

doing business vs. the processes that support it

•  Dramatically faster flow of knowledge, greater

ease of complex strategic problems, high

motivation achieving more with less

Reference 5

38


The Fourth Generation:

Innovative Concept Companies partner with a single integrated

provider simultaneously allowing:

•  Understanding of execution

•  Supply solutions

•  Guidance through essential change

management process

Reference 5

39


A Fourth Generation

Case Study

Cognizant

40


Cognizant

Location: Headquartered in Teaneck, New Jersey

Founder: Kumar Mahadeva – chairman and CEO

History: Started as subsidiary of Dun & Bradstreet

to establish a large offshore development

center for the parent company

Reference 5

41


Cognizant Figures

As of September 30, 2003:

•  6,168 employees

•  260.1 million in past year’s sales

•  39.6 million in past year’s earnings

•  1.129 billion in market value

Reference 6

42


Cognizant

•  Based on client relationships guided by value and

shared goals, not rigid, locked contracts.

•  Operates as technology partner to client.

•  Always been project oriented as opposed to

staffing oriented.

Reference 5

43


Cognizant and the Fourth Generation

How does Cognizant provide

its services to its clients?

44


Fourth Generation Services

•  Vertical industry domain knowledge: (Knowledge of business)

•  State-of-the-art technology expertise: (From legacy platforms and major enterprise applications to

Java, .net, and XML services)

•  Business transformation core competency:

•  Highly disciplined program management and change management competence:

(eliminates hurdles of managing complex offshore developments)

•  Organizational agility: (speed and flexibility to coordinate local and offshore resources)

Reference 5

45


A Fourth Generation Model

•  Creates ‘community of practice’ that fully

integrates business strategy with it’s execution.

•  On site/offshore information technology

outsourcing combined with change management

practices is key.

•  Increased speed, quality, productivity are the

outcomes (all with lower costs).

Reference 1

46


Cognizant’s Differentiators

•  100 percent end-user application focused

(most others are product and research/development

oriented).

•  Focused on working with business end-users with

deep knowledge in key verticals.

•  Focused on bottom line business results through IT

portfolios analysis and change management.

Reference 5

47


Cognizant Industries

First major offshore company to establish vertical

industry practices through experts who know

competitive challenges that client companies face.

Reference 5

48


Vertical Industry Practices

Healthcare

Financial Services

Telecommunications

Manufacturing & Logistics

Media & Publishing

Pharmaceuticals

Insurance

Retail

Sierra Health / Lifeguard / Healthnet

Philidelphia Stock Exchange / First Data Corp

United States Cold Storage / Coors

Nielson Media Research / Dun & Bradstreet

Royal & Sun Alliance / Liberty Mutual / Metlife

Ace Hardware / Radioshack / Brinker Int.

Reference 5

49


Some Recent Industry Awards

October 2003 topped forbes’s list of ‘hotshots’

June 2003 8th overall in business weeks’ list of ‘hot growth companies’

April 2003 15th on forbes’s ‘25 fatest growing tech companies’

(ranked by five-year totals) October 2002

ranked 16th in fatest growing 100 tech companies list published by business 2.0

50


Kumar Mahadeva Speaks

“Cognizant is a recognized premium player in the offshore IT services industry and is growing faster than its offshore peers because our model is built for the new world of large scale offshore outsourcing. through our industry leading fourth generation servicing model we partner with clients on a process we call ‘transforming while performing’ to drastically cut IT and business costs, while better aligning clients’ IT portfolios with business needs.”

Reference 5

51


Partners

52


Case Study

DFS Galleria

53


Case Study: DFS Galleria

•  Engaged Cognizant Technology Solutions, an

Indian offshore service provider, to provide on-

site support.

•  Leading retailer of luxury goods and general

merchandise for international travelers.

•  6,000 + employees & several hundred stores.

Reference 8

54


Situation

•  Sept 11th; Dramatic slowdown in business.

•  Need for accelerated cost reductions.

•  Demand for increased speed and quality of IT

services.

Reference 8

55


Approach

•  Cognizant proposed its “Transformational Offshore Outsourcing” methodology to achieve large-scale, radical changes needed.

–  Phase 1 – Mid 2000; Cognizant assumed responsibility for on-site maintenance and enhancements to retailers core merchandising system.

•  Slow and in phases to help manage risk.

•  Measured in stages before making long-term commitment. •  Fully up to speed in 6 months; comfortable with operation in 12.

Reference 8

56


Approach (Continued)

–  Phase 2 – Early 2001; DFS extended India support to include the second and third shifts.

–  Phase 3 – Oct 2001; Cognizant became responsible for all the application support and new development activities globally.

–  Phase 4 – Early 2002; all financial, human resources and email systems were added.

Reference 8

57


Results

•  Overwhelming success: surpassed DFS’s

expectations on quantitative and qualitative

dimensions.

–  Significant reduction in application support costs.

–  Met all original objectives and delivered other

value-added services.

Reference 8

58


Critical Success Factors

•  Cooperative culture: Teamwork, strong work ethics and “can do” attitude.

•  Patience: Success takes time. •  Pre-planning: Resources need to be allocated early. •  Vendor responsibility: Qualified, trained, mature

staff must be utilized in a timely fashion. •  Clarity: Roles must be clear with responsibilities

and expectations defined. •  Outside the box: Both parties must think about

advantages beyond cost savings. Reference 8

59


Case Study

Lincoln Industrial, Inc.

60


Part #548447 Handheld Grease Gun

•  Most popular of this line

•  Annual volume 48,500+

Reference 9

61


Scenario

Reference 9

62


Case Study

Exult

63


Exult’s Offshore Outsourcing Plan

•  Exult, with the assistance of NeoIT Inc., signed a

deal in early 2003 to move some of its “day-to-day

application maintenance” offshore.

•  Exult’s management deemed this a logical step in

their bid to stay competitive in the ever-changing

global economy.

Reference 12

64


Background - NeoIT

•  NeoIT is the leading offshore advisory and

management firm.

•  “Focus exclusively on assisting companies in

maximizing their returns from offshore sourcing

of both IT and business processes on either a

project or enterprise-wide basis.”

Reference 12

65


NeoIT

•  “Capable of delivering results in the form of cost

savings, improved governance, reductions in

sourcing process time and decreased risks with

offshore supplier partnerships.”

•  Essentially, NeoIT focuses on four factors: cost

savings, quality, risk & control.

Reference 12

66


A Perfect Match

•  Exult’s VP of Business Model Architecture, Steve

Unterberger, was considering offshore outsourcing

due to three primary factors:

1. Savings- the economic environment overseas can

provide significant cost reductions.

Reference 12

67


A Perfect Match (Continued)

2. Skill- By taking application maintenance offshore,

Unterberger believed he could tap into new

sources of expertise.

3. Scale- Access to skilled offshore providers

substantially increases the available resource

base, providing the additional capacity to

accommodate Exult’s Growing business.

Reference 12

68


Exult & NeoIT

•  Mr. Unterberger made it clear from the beginning that

Exult would be taking a “hands-on” approach.

•  “What made the relationship even more effective

was the unique skill set that each party brought to

the table.” – NeoIT

•  “Unterberger understood Exult’s business

requirements and drove the decision making

activities, while NeoIT had extensive knowledge of

offshore markets and providers” - NeoIT Reference 12

69


Exult & NeoIT

•  “NeoIT’s understanding of the Indian Vendor

environment meant that they knew which buttons to

push to create a positive supplier relationship. After

meeting the providers…I was completely convinced

that both the capabilities and the economics we

needed were there.”- Steve Unterberger

Reference 12

70


Exult & NeoIT

•  Next, an intense review and due diligence process

by both parties was conducted and the supplier list

was narrowed to the three most qualified candidates.

•  Then, NeoIT sent a team of veteran auditors to

perform a detailed assessment of each supplier’s

domain, technical and functional knowledge.

Reference 12

71


Evaluation Criteria

•  NeoIT used a five step process to assess the

competency of each of the firms. Their evaluation

criteria included:

1. Past Projects 2. People (management of Human Resources. 3. Pricing 4. Performance 5. Platform

Reference 12

72


Final Decision

•  Based on the previous criteria and the extensive due

diligence performed by both parties, Exult and NeoIT

were able to identify the two most qualified providers

and award the final contracts accordingly.

Reference 12

73


Keys to Success

•  According to Harding Goodman, Global ASM

Director for Exult, “the exacting vendor process that

NeoIT had helped coordinate began paying dividend

right away. The vendors’ skills and familiarity with

our needs were excellent. They knew exactly where

we were going and how we wanted to get there.”

Reference 12

74


Keys to Success (Continued)

•  According to Mr. Goodman: “the keys to a smooth

transition process are communication and

expectations. You need to have a communications

plan in place right from the beginning, and you need

to stick with it…you need to make sure everyone

involved knows your expectations fro time, quality

and other success measurements.”

Reference 12

75


Ongoing Contract Governance & Program Management

•  Ongoing management responsibilities were given to

Exult’s Operations group.

•  NeoIT’s work was just beginning; they were now

focused on ensuring that the savings negotiated

would be delivered consistently and on schedule.

Reference 12

76


Managing for Continued Success

•  NeoIT provides ongoing program management

services to oversee the activities of the offshore

suppliers.

•  With the aid of NeoIT’s Project Office tool, the

suppliers, NeoIT staff, and Exult managers have the

ability to: track milestones, allocate resources,

manage service levels, gather feedback, and see

invoicing and payment information.

Reference 12

77


Managing for Continued Success (Cont.)

•  Project Office generates weekly status reports and

automatically alerts team members whenever

significant events occur – e.g. when performance

falls below service levels.

•  In addition, NeoIT has a full-time program director

based in India to monitor work activities, ensure

compliance, and act as an arbitrator if any issue

arise.

Reference 12

78


Offshore Outsourcing Tips

•  According to Harding Goodman of Exult, companies

considering working with offshore providers should:

“Create a single, global team. You can’t have one

onshore team and another offshore team. Everyone

has to play in the same sandbox.”

Reference 12

79


Offshore Outsourcing Tips (Continued)

•  “Make sure each individual contributor knows what

is expected of the team and how their work fits into

the big picture.” – Harding Goodman, Exult

•  Have a local presence. “The advice of counsel and

our NeoIT representatives in India is invaluable. Our

vendors have complete respect for them, but they

also know they are working for Exult.”

Reference 12

80


Results

•  Harding Goodman believes strongly that offshore

outsourcing with NeoIT has helped Exult achieve its

goals for savings, skill, and scale:

•  Savings: “With the economic model of offshore

outsourcing, we have been able to achieve

somewhat higher savings that we anticipated.”

Reference 12

81


Results (Continued)

•  Skill: “One of my managers said this is the best team

of this sort she’s ever had because of the skills of

the individuals.”

•  Scalability: “Our offshore vendors have good ‘bench

strength.’ If I need additional skills or people, I can

add them quickly.”

Reference 12

82


Update

Reference 16

•  Exult finalized its deal with NeoIT in early 2003

and subsequently employed approximately 150

workers at its facility in India. Recently, Exult has

stated that they plan to “increase its workers in

its BPO facility in India to 2,000 by 2005.”

83


Conclusion

84


Things to Consider before Outsourcing

•  Be patient – long term mindset. •  Vendor selection costs 1 to 10% premium.

–  Documenting requirements –  Negotiating contracts, legal fees –  Travel expenses

•  Transition period •  Cost of layoffs, morale of “survivors” •  Cultural cost, communication

Reference 10

85


Things to Consider before Outsourcing

•  Quality assurance testing •  Cost of managing contract offshore •  Security and privacy •  Skills and expertise – talent match project •  Country stability •  Certification – CMMI (Capabilities Maturity Model

Integration)

Reference 10

86


The Latest Trends

•  Multi-sourcing – Multiple service providers in different countries; search for best skills for best price.

•  Reshuffling Skills – Rebalancing mix of in-house skills with managerial experience and business process knowledge. –  IT Architects – which technologies to adopt –  Contracting, negotiation, financial & accounting

•  Offshore Handoffs – outsourcers are outsourcing •  Large savings currently

–  However, demand will drive up global labor costs. –  Negotiations for extended long-terms contracts.

Reference 11

87


Offshore Outsourcing Benefits

•  Cost Savings

•  Increased Productivity

•  Time to Market

•  Access to Expertise and Skills

•  24/7 Operation

•  Higher Software Quality

•  Make capital funds available-Cash infusion

•  Sharing of risks

88


Offshore Outsourcing Costs

•  Unclear objectives and design requirements

•  Lack of Control

•  Time zone differences

•  Language barriers

•  Domestic layoffs

89


Backlash/Controversy

•  There are numerous proponents for offshore

outsourcing and numerous opponents who believe

offshore outsourcing is simply a low-cost, low-

quality alternative to keeping jobs in the U.S.

Reference 14

90


Opponents

•  In recent years there have been a number of people who have called for legislation that would limit the ability of U.S. companies to move IT jobs offshore.

•  Many people who oppose offshore outsourcing are, in fact, workers who have been outplaced by the practice.

•  Other negative factors that opponents cite include downward pressure on salaries in the IT industry and the potential for a “reverse brain drain,” where highly skilled IT workers choose to work in countries other than the U.S.

Reference 15

91


Government Action?

•  Recently, the Bush administration has stated that

they have “no plans to impede companies efforts to

move IT jobs to India or anywhere else.

•  Thus, the government has decided that it will not, at

any time in the near future, enact any sort of

legislation that would hinder offshore outsourcing.

Reference 15

92


Proponents

•  Many of those in favor believe that they can in fact

get better quality in shorter times at a lower cost by

going offshore.

•  The majority, whether they agree with the previous

statement or not, believe that they can attain at least

a level of quality consistent with what they have in

the U.S., at a lower cost.

Reference 14

93


Proponents (Continued)

•  Essentially, it comes down to a competitive

advantage decision for these global companies.

•  As Kevin Campbell, COO of Exult states: “…if I

thought I could clobber all my [competitors] here by

just staying put in the U.S. and outsourcing work

here, why wouldn’t I do that? I am not doing that,

because that [scenario] does not exist”

Reference 13

94


Proponents (Continued)

•  Again, global companies see it as a crucial element

to staying competitive in the global market place.

•  Some executives, such as Gordon Coburn senior VP

and CFO of Cognizant, believe that not making the

decision to outsource offshore will eventually cost

more jobs because companies will “not be able to

survive , because they won’t be price-competitive.”

Reference 13

95


Sink or Swim?

•  Ultimately, after hearing both sides of the argument,

it becomes clear that the executives that are in favor

of offshore outsourcing believe that it is a necessity

in order to stay competitive.

•  Essentially, global companies must “evolve or

perish.”

96


References

1.  “Tech Vendor Cognizant Harnesses the Force of Y6” by Cliff Shaffram, The Bottom Line represented from South China Morning Post Sunday Money – Oct 27,02

2.  www.gislen.com/services/why_outsourcing.htm by Mirael Gislen and M.C.Abruham 3.  “Offshore Outsourcing grows to global properties” by Lassy Greenemeies 2/11/02 4.  “More and More Its Offshore” by Jim Erricson Oct 11,2002 Line 56 5.  www.cognizant.com 6.  “Healthcare Informatics 100” 7.  “IT Trends 2003: Offshore Outsourcing” by Stephanic Moose-Idea Byte Oct 21, 2002 8.  www.gartnerconnects.com on10.08.03 9.  Interview: Tom Johnson, Plant Manager on 11.12.03 10.  www.web.lexis-nexis.com, www.proquest.umi.com on 10.23.03 11.  Copyright 2003 “PR Newswire Association, Inc.” 12.  Copyright 2003 “NeoIT, Inc.” 13.  Copyright 2003 “Living Media India, Ltd.” 14.  Copyright 2003 “CMP Media, LLC” Information Week 15.  Copyright 2003 “Computerworld, Inc.” 16.  Copyright 2003 “Financial Times Information” 17.  Carmel, E., and Agarwal, R., “The Maturation of Offshore Sourcing of Information Technology,” MIS

Quarterly Executive, Vol. 1, 2, pp. 65-77. Greenemeier, L., “Offshore Outsourcing Grows to Global Proportions,” InformationWeek, Feb 11, 2002 Morstead, S., and Blout, Greg, Offshore Ready, Isani Press, 2003. Vijayan, J., “Companies Expected to Boost Offshore Outsourcing,” ComputerWorld, Feb 17, 2003.

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References

18.  Rosenthal, B., “Deloitte Study Discovers 75% of Global Financial Institutions Pan to Outsource Offshore,” Everest Partners, L.P., Dallas Texas, June, 2003 Morstead, S., and Blout, Greg, Offshore Ready, Isani Press, 2003.

19.  Carmel, E., and Agarwal, R., “The Maturation of Offshore Sourcing of Information Technology,” MIS Quarterly Executive, Vol. 1, 2, pp. 65-77.

20.  NASSCOM, McKinsey Report, 2002 21.  Morstead, S., and Blout, Greg, Offshore Ready, Isani Press, 2003. 22.  MacSweeney, G., “Offshore Can Improve Quality,” Insurance and Technology, July 2003, Vol. 28, 7, p.39. 23.  Thibodeau, P., “Offshore’s Rise is Relentless, ComputerWorld, Vol. 37, 25, June 30, 2003, p. 1, 16.

McCarthy, Kack, “Redefining Offshore Outsourcing,” InfoWorld, December 2, 2002, Vol. 24, 28, p. 56. 24.  McCarthy, Kack, “Redefining Offshore Outsourcing,” InfoWorld, December 2, 2002, Vol. 24, 28, p. 56. 25.  Auriga.com, Carnegie Mellon University, Software Engineering Institute (SEI), May 2002

http://www.sei.cmu.edu/cmm/high-maturity/HighMatOrgs.pdf 26.  Greenemeier, L., “Offshore Outsourcing Grows to Global Proportions,” InformationWeek, Feb 11, 2002 27.  Weiss, P., “Behind the Numbers: Offshore Outsourcing’s Cost Effective Edge, InformationWeek, Nov 25,

2002, Vol. 916, p. 66.

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Documents

us offshore

offshore outsourcing

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size of market reference

commitments reference

british reference

dollar market