Origin & History

Key Concepts

Application

• Outsourcing also known as Offshoring.

• Outsourcing is the business practice where companies contract out selected operations to other companies that specialize in those operations in order to lower cost and improve efficiency. Though formally introduced

• Origin began in the aftermath of World War II.

• Before World War II (1939-1945, companies did not engage in outsourcing because international trade and global communications were not nearly as developed as these are now.

• After World War II, there was an expansion in global trade combined by the engines of American business and government, both sought to increase imports to war ruined Europe and Asia.

• Business firms applied this through diversification, spreading corporate bases, economies of scale such as Japan which started supplying large quantities of textiles to the United States.

• It was the low cost of labor in Asia that served as the main attraction for outsourcing.

Origin and History - Outsourcing

Objectives of BPO

1. Process improvement and efficiency - faster turnaround and greater productivity

2. Cost savings

3. Reduced head count

4. Improved quality - less errors/rework

5. Building/strengthening presence in a new market/foreign country

6. Increased focus on core competencies - e.g. developing new products or services

7. Building business value and strategic differentiation

Indian BPO Industry

India - the world's preferred BPO destination

India has won its spurs as the world's outsourcing destination of choice.

Services that can be outsourced to India.• Call Center Services• Data entry services• Transcription services• Engineering services• Healthcare services• Financial services• Software Development• Photo Editing services• Web analytics services

Key Concepts• There are two primary types of BPO: Back office and front office outsourcing. Typical back office processes that may be

outsourced include payroll, billing logistics and human resources.

• Some companies offer their services in collections, credit analysis and job recruitment, claims processing at an insurance company.

• Front office outsourcing include technical support, customer service, marketing and advertising.

Forms of Outsourcing:

1. Multi-Sourcing• Multi-sourcing represents a contracting structure that reduces customers’ reliance on one supplier, getting services from

several different sources.

2. Nearshoring• Nearshoring is a form of outsourcing when a company transfers its processes to companies in a nearby country and both

parties expect to benefit from their geographic location, linguistic, cultural, political, economical, historical or other similarities.

Key Concepts 3. Offshoring

Offshoring stands for relocating jobs by a company from one country to another to cut costs and increase efficiency.

4. Contracting out

Contracting out is performed frequently with Indian partners rather than with near-shore partners.

5. Captive offshore

Captive offshore form of outsourcing is based on cooperation with lower-cost countries used to lower

organizational costs

6. Subsidiary of an offshore company

Start up a subsidiary company in a foreign country where you expect a significant added value for your business,

such as good economical conditions, skilled people and reasonable costs.

Key Concepts• Nasscom has studied that US businesses have witnessed significant cost savings by offshoring to India.

• Every one dollar invested in India, the value derived by the US economy is between $12-14.

• Nearly 75% of US and European multinational companies now use outsourcing or shared services to support their financial functions. 72% of European multinational companies have outsourced financial functions.

• American BFSI companies have saved $6 billion in the last four years by offshoring to India.

• According to the NASSCOM report, the BFSI sector have saved $6 billion in the last few years and due to these savings have added 125,000 new jobs in this period thus preventing layoffs.

• Factors responsible for outsourcing success are: quality processes, scalability, integration of global markets and seamless global delivery of work across borders through the internet.

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Application in real practice

ITC InfoTech – FEA Services for Leading Engineering Services Company

Finite Element Analysis (FEA) can be defined as the process of choosing the optimal combination of material in a product or composite through software analysis.

• Finite Element Analysis (FEA) improves product quality and is now extensively used in the industry to verify, validate or test design, and is proven to reduce design cycle time significantly by eliminating errors. It increases product reliability through running a greater number of test cases / design configurations

WHY FEA?

• The concept looks great on paper, but will it stand loading conditions in reality?• If one like to reduce the amount of experimental testing?

Application in real practice

The CustomerCustomer a leading engineering services company, headquartered in the Gulf region. They are in the business of providing various engineering services to customers in different sectors such as construction, infrastructure, etc.

The RequirementCustomer owned and operated a mass lift at their project site. This mass lift had a load bearing capacity of 1 ton. They wanted to increase the load bearing capacity of this mass lift from 1 ton to 3 ton. The engineering firm wanted us to conduct technical procedures:

Finite Element Analysis (FEA)

ITC InfoTech The Team and Approach

• Experienced mechanical engineers who are capable of conducting various types of analysis such as structural (fatigue, strain, stress, and deformation), thermal (radiation, conduction and convection) fluid flow (velocity, pressure and flow) and coupled field analysis.

FEA Software and Tools Used at ITC Infotech

• Ansys

• Optistruct

• Hypermesh

• MSC Nastran

• LS-DYNA

• CosmosWorks

Application in real practice The Solution• Team of experienced mechanical engineers created a list of the items required for completing the task with material

specifications, known as the Bill of Material (BOM). This also helped them draw the project cost estimates.

• Identified technical experts and experience in this specific area of activity.

• Simulation of the entire process to achieve high accuracy and top quality work.

• Mechanical engineering team successfully increased the load bearing capacity of the mass lift from 1 ton to 3 ton and that too within a very short turnaround time

Key achievements of this project.

Reduction in field failures and product recalls Reduction in physical tests Increase in productivity Increased the height of the mass lift from 5 meters to 6 meters Optimized weight of the mass lift Achieved a safety factor Delivered video animation files (in .avi format) of the analysis simulation Generated detailed analysis reports

Application in real practice

Benefits to the Customer or Why Customer seek to Outsource FEA services.

• Eliminate product iterations by incorporating all elements early in the product design process.

• Reduce costs that usually go with modification or redesign.

• Helps in solving complex mechanical engineering analysis challenges, such as coupled field analysis and explicit dynamics.

• Simulation gives the product designer multiple performance conditions to test on the product designs; this reduces the product failures and provides measurable benefits in terms of lower manufacturing cost, reduced product development time and increased efficiency.

• In troubled economic times, outsourcing FEA Analysis can give manufacturing companies a competitive edge while lowering costs.

• Complete satisfaction with the overall project deliverables.

• Complete the project in a very short turnaround time.

• Provide detailed analysis reports.