Outsourcing Success : The Management Imperative

by Patel, Alpesh B.; Aran, Hemendra

• ISBN13: 9781403946225
• ISBN10: 1403946221
• Format: Hardcover
• Copyright: 2005-12-03
• Publisher: Palgrave Macmillan

Summary

Outsourcing of business processes has been a major and growing trend. Many major corporations have oursourced overseas and the next wave will include many SMEs moving outsourcing operations. The changes and implications for business are substantial. Based on the latest research and data, with extensive case studies, diagrams, and interviews with major corporations, this book provides a comprehensive analysis and highlights the best practice and pitfalls to avoid.

Author Biography

Alpesh B. Patel is a Financial Times Columnist and Bloomberg Television's award winning Internet and Online Trading Specialist and co-presenter of @Bloomberg and Bloomberg Money. He is also a Visiting Fellow in Business at Corpus Christi College, Oxford University.

Table of Contents

List of figures and tables	x
About the authors	xii
List of abbreviations	xiv
Acknowledgements	xv
Introduction	1	(6)
What business process outsourcing means	7	(22)
Definition of BPO	7	(1)
What's the outsourcing imperative and does it work?	8	(4)
Outsourcing: an economic imperative	9	(3)
The BPO route map	12	(2)
Scope of outsourcing	14	(2)
Horizontal services	14	(2)
Vertical focused services	16	(1)
Market size	16	(3)
By region	16	(1)
By function	17	(2)
Drivers of BPO	19	(4)
Cost reduction	19	(1)
Focus on core operations	20	(1)
Shared infrastructure	21	(1)
Improvements in service level	21	(1)
Access to large talent pool	21	(1)
Process and product innovation	22	(1)
Leveraging multiple time zone	22	(1)
Changing customer needs	22	(1)
Improving the bottom line	22	(1)
Inhibitors	23	(2)
Services quality	23	(1)
Data security	24	(1)
Staff redeployment issue	24	(1)
Geopolitical risks	24	(1)
Cultural differences	25	(1)
Regulatory issues concerning offshoring	25	(1)
The chapters ahead	25	(4)
The BPO competitive landscape	29	(8)
Various segments of the BPO market	29	(5)
Classification by the identity of the players	29	(4)
Classification by the nature of the activities performed by the players	33	(1)
How the BPO market is evolving	34	(3)
Sourcing strategy: an imperative in the connected economy	37	(10)
Sourcing strategy: the next step after the business strategy	38	(2)
What are the drivers of a partnership-based world?	40	(4)
Increasing competitive thresholds due to globalization	41	(1)
Industrialization of service value chain	42	(2)
Various dimensions of strategic sourcing	44	(3)
Business goals	45	(1)
Internal capability	45	(1)
External market capability	45	(1)
Sourcing alternatives and models	46	(1)
Sourcing governance	46	(1)
How to develop a sourcing strategy	47	(41)
First step: strategic gap analysis	47	(2)
Second step: market and risk analysis	49	(1)
Third step: market engagement alternatives	50	(5)
Source internally	52	(1)
Sourcing of capabilities or deliverables	52	(1)
Sourcing of services or solutions	53	(2)
Fourth step: market engagement models	55	(8)
Proposed models for ``key activities''	56	(1)
Proposed models for ``potential activities''	57	(1)
Proposed models for ``fundamental activities''	58	(2)
Proposed models for ``common activities''	60	(3)
Fifth step: alternative scenario assessment	63	(2)
Final step: sourcing governance	65	(12)
Investment banks	77	(11)
Why	77	(11)
Guidelines for choosing outsourcing partners	88	(23)
Partner choices framework	88	(1)
Defining and refining goals	89	(1)
Requirements assessment	89	(1)
Location decision -- which country for what?	89	(4)
Zeroing in on the partner	93	(1)
In the long run	94	(3)
Considerations - smoothing out the road blocks	97	(1)
Key principles for win--win client relations	97	(2)
Trust and confidence	98	(1)
Responsiveness	98	(1)
Innovation	99	(1)
Best practices	99	(9)
The view of a CTO	108	(3)
What informs your decision to outsource?	108	(1)
What do you look for in a target company?	109	(1)
What kinds of activities have you not outsourced?	110	(1)
Would you consider outsourcing more? What are your fears about it?	110	(1)
The CFO perspective	111	(7)
Profit and loss perspective	111	(1)
Balance sheet perspective	112	(1)
Operational metrics perspective	113	(1)
Outsourcing the finance functions	114	(1)
The virtues and threats of virtual	114	(4)
Sourcing investment banking research and independent stock research	118	(9)
Regulatory changes altered the competitive landscape	118	(4)
Equity research functions: a strong case for outsourcing	122	(1)
Roadblocks in the way of outsourcing/offshoring research functions	122	(1)
How are firms using the services?	123	(1)
What operational structures?	124	(1)
Key pitfalls?	125	(1)
Learning from others' mistakes	125	(2)
The politics of outsourcing: trends, risks and strategies	127	(15)
The politics of offshoring	127	(1)
Dissecting the offshore debate	128	(4)
The economic impact	129	(1)
Quality	129	(1)
Security and regulatory compliance	130	(1)
Exploitation	131	(1)
Business risks	132	(1)
Assessing the impact so far	133	(4)
Strategies	137	(2)
Understand current and future stakeholder concerns	137	(1)
Develop a plan for displacement management	137	(1)
Make the case for offshoring	138	(1)
Ensure the highest standards	138	(1)
Align offshore plans with your CSR strategy	139	(1)
Conclusion	139	(3)
The future: outsourcing, innovation and your company's and country's future growth	142	(33)
Prosperity in the modern economy	142	(1)
Technological advances	143	(11)
Social	143	(3)
Science	146	(5)
Innovation	151	(3)
Globalization	154	(5)
Growth	155	(1)
Production	156	(3)
Sectoral change -- services	159	(5)
Productivity growth	159	(2)
Technology	161	(1)
Location	162	(2)
The knowledge economy	164	(3)
Changing skills	164	(2)
The global labor market	166	(1)
Key challenges for a modern economy -- the U.K.	167	(5)
Appendix 1: location summaries	172	(2)
Appendix 2: the political issues	174	(1)
References	175	(2)
Index	177