(c) Graber Associates LLC 2006 Outsourcing: Who Needs It? Who Wants it? How outsourcing can affect people and processes in your

(c) Graber Associates LLC 2006 www.graberassociates.net

Outsourcing: Who Needs It?Who Wants it?

How outsourcing can affect people and processes in your company.

TAWPI November 16, 2006


Today’s Agenda

Outsourcing as we know it Why outsource? What to outsource? What happens – or should happen - when you do? Who are we?


What is Outsourcing, Anyway?

Outsourcing vs. Offshoring Some facts and figures

– CapGemini paid $1.3bn for Kanbay (6,900 workers, majority in India).– IBM $160m for Daksh. Fujitsu adds 800 staff at two Indian development

centers thru purchase of Rapidigm. EDS $380m takeover of Mphasis.– Six of top ten vendors have > 20% of workforces in low-cost delivery

locations. – To compete with India's major software services firms. – India huge, China not yet. Top ten firms have 109,000 staff (14% of

workforces)based in India . They have 6,000, or <1%, in China. Other continents’ hot spots: Brazil, Costa Rica,Hungary, Czech

Republic, Poland, and Philippines. Like LogicaCMG, successful firms can blend onshore, near shore, and

offshore support for optimum balance of quality and savings.


Why Outsource?

Outsourcing is an overall strategy– Not a tactical decision to fix a problem– Can always come “back in-house” later

Mantra: “Better faster cheaper” Try to maintain core skills inside the company versus

outsourcing Outsource to bridge personnel gaps


What to Outsource

Potentially any function can be outsourced What We Outsource and Why

– Financial and accounting functions– Design and layout

What Our Clients Outsource to Us and Why– When our experience, skills, and interests complement them

Examples Some of the Things We’ve Learned Along the Way

– Not to assume clients really know what we do and why– Importance of “being managed”– Not to be pigeonholed


Potential Outsourced Functions

CEO

Accounting Finance Marketing Technology LegalHuman

ResourcesOperations


What Not to Outsource

The importance of “brand” and acknowledged affiliations– Political appointment tiers; Sony and Intel

They are your values. It’s your reputation– Recent consumer experience

Everyone Must Keep Control of:– Planning and Budgeting– Policy Setting– Supplier Management– Performance Management and Reporting– Customer Relationship Management


People Issues

How will staff react to outsiders? Consider taking an “educational” approach Maintain open and frequent communications with employees Outsourced assistance most likely more experienced – not junior

people Staff can learn from more experienced, temporary workers

– If both sides open minded and willing

Mr. Fernwell, Nerlman, and “Bob”


Process

Managed vs. informed– The importance of trust

“Yes, Mr. General Secretary – trust, but verify” – Create workable Service Level Agreements (SLA’s)

Quisquis custodiet custodes (SLA report cards; green-yellow-red; the limits to usefulness of such

reports)– Knowledge sharing

The higher the skill level, the more it’s necessary– Our client’s example of knowledge sharing; the auto mechanic

– Outsourced services need little oversight– Outsourced workers do need to be involved and informed– Both sides need to see outsourced workers as “part of the company”


Some Creative Examples

Wendy’s Call Center:“Thinking Outside the Bun”– Drive thru order taken in Nashua,NH call center

Oregon Prisons Call Center– “Win win” behind bars

Printing Supply Company’s Quest for Lower Costs– Ship to Vietnam in containers, get work done, have shipped back.

Still cheaper than doing it here…seeking ever-lower labor costs– But it’s for commodity items & services; price-driven

Accounting Auction– Pros : cost certainty, transparency of qualifications– Cons: Job hopping, lack of backup and commitment


Summary

Outsourcing “outside the box” Any company can outsource if required Strategic versus tactical justification Outsourced workers and employees work hand-in-

hand as teammates Maintain open and continuous communications with

employees and outsourced workers


Sources Consulted for This Session

Boston Globe: Nov. 5, 2006 – Wendy’s E-Week: Oct. 2, 2006 – Peter Coffee on Branding Info Week: Oct 24, 2006 – Paul McDougall on Outsourcing, Quoting Workers Computer Weekly: June 21, 2005 – Anna Cook opinion piece on redressing the

outsourcer-client balance E-Week: November 16, 2005 – Martha Young on the High Costs of Outsourcing Sourcing Magazine: September 1, 2005 – Dian Schaffhauser on Nine Tips for

Outsourcing Your Software Testing CFO.com: November 13, 2006 – Laura DeMars, “Accountants, Going Once, Going

Twice” Deloitte and Touche: April 2005 report, “Calling a Change in the Outsourcing Market”

…and of course, our own hard-earned wisdom born of experience


Graber Associates LLC

Founded in August 2002 Public Relations

– Press releases Message development– Press and analyst tours Press kits– Press training

Marketing– Collateral Trade show support – Web site content Sales sheets – Company backgrounders

Research– Vendor reviews Potential partners– Customer satisfaction surveys

Contact information– [email protected] [email protected]– 781-221-0018 617-323-5694


Thank You

How outsourcing can affect people and processes in your company.

TAWPI November 16, 2006

Documents

(c) Graber Associates LLC 2006 Outsourcing: Who Needs It? Who Wants it? How outsourcing can affect people and processes in your