Trends in IT outsourcing

1
TOP JOBS OUTSOURCED IT OUT$OURCING EXPENDITURE TRENDS, BENEFITS, STATS, FUTURE, AND A BRIEF LOOK AT DGT MORE THAN 2.4 MILLION JOBS OUTSOURCED FROM THE US IN LAST 10 YEARS. Information Technology 28 % 32 % 11 % 14 % 15 % Human Resources Sales and marketing Financial Services Administrative Outsourcing, etc. Source: IMF World Economic Outlook data, Hackett Group proprietary data and publically available company data ESTIMATED 2002 TOTAL JOBS 2012 2014 2016 8.3 million 6.8 million 6.8 million 6.8 million 4.6 million 0.3 million 3.4 million 3.3 million 3.4 million 1.4 million 2.0 million 3.5 million 1.0 million 2.3 million 1.8 million 1.7 million Jobs already offshored from North America and Europe Jobs still based in North America and Europe but which can be offshored Jobs based in North America and Europe which cannot be offshored Terminated one or more outsourcing agreements. Increased outsourcing 57% 34% 9% POPULARITY OF OUTSOURCING Since the recession of 2008-2009 Restructured one or more outsourcing agreements in a significant way Source: http://brandongaille.com/26-us-outsourcing-statistics-and-trends/ Source: Deloitte’s 2014 Global Outsourcing and Insourcing Survey PLANS FOR IT OUTSOURCING 53% 26% CURRENTLY OUTSOURCING IT FUNCTIONS Source: The IT Outsourcing Statistics 2014/2015 study LARGE 7.4 % ORGANIZATIONS OF THEIR IT BUDGETS MID-SIZE ORGANIZATIONS 4.6 % OF THEIR IT BUDGETS SMALL ORGANIZATIONS 6.1 % OF THEIR IT BUDGETS TOP OFFSHORING DESTINATIONS TRENDS TO LOOK OUT FOR Source: http://brandongaille.com/26-us-outsourcing-statistics-and-trends/ Source: A.T. Kearney’s 2014 Global Services Location Index (GSLI) Source: Deloitte's 2014 global outsourcing and insourcing survey http://www2.deloitte.com/us/en/pages/strategy/articles/2014-global-outsourcing-and-insourcing-survey.html Source: http://www.daxx.com/article/IT-Outsourcing-Statistics-Trends-2013-2014 R E A S O N S F O R O U T S O U R C I N G Reduce or control costs and /or preserve capital Gain access to IT resources not available internally Free up internal resources to focus on core operations Improve business or customer focus Accelerate company reorganization/ transformation Accelerate project Gain access to expertise not available internally Reduce time to market 44 % 34 % 31 % 22 % 28 % 15 % 15 % 9 % 1.43 BILLION INDIA 1.03 BILLION INDONESIA 780 MILLION CHINA 39 MILLION PHILLIPINES 26 MILLION EGYPT 2 MILLION LITHUANIA 3 MILLION BULGAIRA INDIA (7.1) 1.43 BILLION INDONESIA (6.9) 1.03 BILLION CHINA (6.4) 780 MILLION BULGARIA (6.4) 3 MILLION PHILLIPINES (6.3) 39 MILLION JORDAN (6.2) 2 MILLION SINGAPORE (6.5) 3 MILLION THAILAND (6.0) 39 MILLION LITHUANIA (5.9) 2 MILLION EGYPT (5.8) 26 MILLION 2 MILLION JORDAN 3 MILLION SINGAPORE 39 MILLION THAILAND Companies may seek multi-vendor or multi-functional strategies requiring transition and service integration capabilities SOLUTION BENEFITS ∙ HIRING DEDICATED DEVELOPMENT TEAMS ∙ DIRECT COMMUNICATION WITH THE DEDICATED DEVELOPERS ∙ FULL CONTROL OVER THE PROJECT ∙ FULL INVOLVEMENT OF TEAM MEMBERS ∙ COST CUTTING ON HIRING, TRAINING, INFRASTRUCTURE EXPANSION ETC. C L I E N T S I S S U E S ∙ FEEL VENDORS ARE BEING REACTIVE VS. PROACTIVE 49% ∙ FEEL THERE IS LACK OF INNOVATION 37% Source: Deloitte’s 2014 Global Outsourcing and Insourcing Survey SUYATI TECHNOLOGIES PIONEERS OF DEDICATED GLOBAL TEAM (DGT) DGT Clients will continue to demand more from their vendors Vendors would continue to evolve their services to fulfill customer needs, and deliver value on both qualitative and quantitative terms. CREATIVE TECHNICAL FINANCIAL SAY DGT GIVES CLIENTS COMPLETE CONTROL KEY ISSUE HOW DGT CAN SOLVE IT DELAYS IN SCHEDULE AND INABILITY TO MEET MILESTONES HIDDEN COSTS LACK OF APPROPRIATE RESOURCES SECURITY ISSUES CULTURAL BARRIERS COMMUNICATION INABILITY OF OUTSOURCING PROVIDER TO UNDERSTAND CLIENT'S BUSINESS NEEDS INFLEXIBLE CONTRACTS LACK OF EXIT STRATEGY PROVIDES RIGHT INFORMATION AT THE RIGHT TIME, MAKING IT EASY TO FIX CORRECT AND REALISTIC DEADLINES. OFFERS TRANSPARENT COST STRUCTURE, ON A COST + MARGIN MODE INVOLVES CLIENT IN THE TALENT SELECTION PROCESS PROVIDES OVERALL CONTROL; CLIENT CAN SELECT APPROPRIATE PHYSICAL, NETWORK AND VIDEO SECURITY CULTURAL TRAINING AND TIMELY FEEDBACK TO COUNTER DISPARITY MULTIPLE METHODS TO COMMUNICATE, SUCH AS EMAILS, GO TO MEETING, PIVOTAL TRACKER, TFS, AND SKYPE, ETC. DEDICATED TEAM SET UP SPECIFICALLY FOR THE CLIENT'S PURPOSE; FOCUS REMAINS ON THE CLIENTS BUSINESS STRAIGHTFORWARD CONTRACTS, WHICH ARE TRANSPARENT AND SCALABLE OFFERS OTHER OPTIONS SUCH AS BOT OR JV RELATIONSHIPS IF DGT DOES NOT WORK OUT AS EXPECTED 48 % Source: http://brandongaille.com/26-us-outsourcing-statistics-and-trends/ ADDITIONAL JOBS IN FINANCE, IT, AND OTHER KEY BUSINESS SERVICES AREAS WILL BE OFFSHORED BY 2016 (HACKETT GROUP) VALUE OF OUTSOURCING IS EXPECTED TO INCREASE TO TOUCH IN 2015 COMPANIES PLAN TO HIRE MORE OUTSOURCERS THAN FULL OR PART TIME STAFF IN THE NEXT 12-18 MONTHS 7,50,000 $25 BILLION FUTURE OF OUTSOURCING OFFSHORE OUTSOURCING TO GROW BY MORE THAN ANNUALLY (META GROUP) 20 % Reference http://www2.deloitte.com/content/dam/Deloitte/us/Documents/strategy/us-%209127988%20global-%20outsourcing%20-survey%20-infographic.pdf http://www.slideshare.net/kmukund7?utm_campaign=profiletracking&utm_medium=sssite&utm_source=ssslideview http://suyati.com/why-dedicated-offshore-team/ http://www.thehackettgroup.com/about/research-alerts-press-releases/2012/03272012-hackett-research-forecasts-offshoring.jsp https://www.maxaur.com/outsource_stat.aspx http://www.computereconomics.com/temp/outsourcingstatisticssamplepages.pdf http://www.meti.go.jp/english/report/downloadfiles/1-2e.pdf http://brandongaille.com/26-us-outsourcing-statistics-and-trends/ http://www2.deloitte.com/us/en/pages/strategy/articles/2014-global-outsourcing-and-insourcing-survey.html http://www.daxx.com/article/IT-Outsourcing-Statistics-Trends-2013-2014 https://www.kpmg-institutes.com/content/dam/kpmg/sharedservicesoutsourcinginstitute/pdf/2014/state-of-outsourcing-2014-exec-findings-hfs.pdf https://www.kpmg-institutes.com/content/dam/kpmg/sharedservicesoutsourcinginstitute/pdf/2014/state-of-outsourcing-2014-exec-findings-hfs.pdf http://suyati.com/engagementmodels/dedicated-global-teams/ http://www.slideshare.net/kmukund7/dedicated-global-teams-sm

Transcript of Trends in IT outsourcing

Page 1: Trends in IT outsourcing

TOP JOBSOUTSOURCED

IT OUT$OURCINGEXPENDITURE

TRENDS, BENEFITS, STATS, FUTURE,AND A BRIEF LOOK AT DGT

MORE THAN2.4 MILLION JOBSOUTSOURCED FROM THE US

IN LAST 10 YEARS.

Information Technology

28%

32%

11%

14%

15%Human Resources

Sales and marketing

Financial Services

AdministrativeOutsourcing, etc.

Source: IMF World Economic Outlook data, Hackett Group proprietary data and publically available company data

ESTIMATED2002

TO

TA

L

JO

BS

2012 2014 2016

8.3million

6.8million

6.8million

6.8million

4.6 million

0.3 million

3.4 million 3.3 million 3.4 million

1.4 million

2.0 million

3.5 million

1.0 million

2.3 million

1.8 million

1.7 million

Jobs already offshored from North America and Europe

Jobs still based in North America and Europe but whichcan be offshored

Jobs based in North America and Europe which cannot be offshored

Terminated one or moreoutsourcing agreements.

Increased outsourcing

57%

34%

9%

POPULARITYOF

OUTSOURCINGSince the recession of

2008-2009

Restructuredone or moreoutsourcing agreementsin a significant way

Source: http://brandongaille.com/26-us-outsourcing-statistics-and-trends/

Source: Deloitte’s 2014 Global Outsourcing and Insourcing Survey

PLANS FORIT OUTSOURCING53%

26%CURRENTLYOUTSOURCINGIT FUNCTIONS

Source: The IT Outsourcing Statistics 2014/2015 study

LARGE

7.4%

ORGANIZATIONS

OF THEIRIT BUDGETS

MID-SIZEORGANIZATIONS

4.6%OF THEIRIT BUDGETS

SMALLORGANIZATIONS

6.1%OF THEIRIT BUDGETS

TOP OFFSHORINGDESTINATIONS

TRENDS TOLOOK OUT FOR

Source: http://brandongaille.com/26-us-outsourcing-statistics-and-trends/

Source: A.T. Kearney’s 2014 Global Services Location Index (GSLI)

Source: Deloitte's 2014 global outsourcing and insourcing surveyhttp://www2.deloitte.com/us/en/pages/strategy/articles/2014-global-outsourcing-and-insourcing-survey.html

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REAS

ON

S FOR OUTSOUR

CIN

G

Reduce or controlcosts and /or preservecapital

Gain access toIT resourcesnot availableinternally

Free up internalresources to

focus on coreoperations

Improve business orcustomer focus

Accelerate companyreorganization/transformation

Accelerateproject

Gain access to expertisenot available internally

Reduce timeto market

44%

34% 31%

22%

28%

15%

15%

9%

1.43BILLIONI N D I A

1.03BILLIONI N D O N E S I A

780 MILLIONC H I N A

39 MILLIONP H I L L I P I N E S

26 MILLIONE G Y P T

2 MILLIONL I T H U A N I A

3 MILLIONB U L G A I R A

INDIA (7.1) 1.43 BILLIONINDONESIA (6.9) 1.03 BILLIONCHINA (6.4) 780 MILLIONBULGARIA (6.4) 3 MILLIONPHILLIPINES (6.3) 39 MILLIONJORDAN (6.2) 2 MILLIONSINGAPORE (6.5) 3 MILLIONTHAILAND (6.0) 39 MILLIONLITHUANIA (5.9) 2 MILLIONEGYPT (5.8) 26 MILLION

2 MILLIONJ O R D A N

3 MILLIONS I N G A P O R E

39 MILLIONT H A I L A N D

Companies mayseek multi-vendor or

multi-functional strategies requiring

transition and service integrationcapabilities

SOLUTION

BENEFITS

∙ HIRING DEDICATED DEVELOPMENT TEAMS

∙ DIRECT COMMUNICATION WITHTHE DEDICATED DEVELOPERS

∙ FULL CONTROL OVER THE PROJECT∙ FULL INVOLVEMENTOF TEAM MEMBERS

∙ COST CUTTING ON HIRING,TRAINING, INFRASTRUCTURE

EXPANSION ETC.

CLIENT’S ISSUES

∙ FEEL VENDORS ARE BEING REACTIVE VS. PROACTIVE49%

∙ FEEL THERE IS LACK OF INNOVATION37%

Source: Deloitte’s 2014 Global Outsourcing and Insourcing Survey

SUYATI TECHNOLOGIESPIONEERS OF DEDICATED GLOBAL TEAM (DGT)

DGT

Clients will continue to demand

more from their vendors

Vendors would continue to evolve

their services to fulfill customer needs, and deliver value on both

qualitative and quantitative terms.

CREATIVE

TECHNICAL

FINANCIAL

SAY

DGTGIVES CLIENTSCOMPLETE CONTROL

KEY ISSUE HOW DGT CAN SOLVE IT

DELAYS IN SCHEDULE ANDINABILITY TO MEET MILESTONES

HIDDEN COSTS

LACK OF APPROPRIATE RESOURCES

SECURITY ISSUES

CULTURAL BARRIERS

COMMUNICATION

INABILITY OF OUTSOURCINGPROVIDER TO UNDERSTANDCLIENT'S BUSINESS NEEDS

INFLEXIBLE CONTRACTS

LACK OF EXIT STRATEGY

PROVIDES RIGHT INFORMATION AT THE RIGHT TIME, MAKING IT EASY TO FIX CORRECT AND REALISTIC DEADLINES.

OFFERS TRANSPARENT COST STRUCTURE, ON A COST + MARGIN MODE

INVOLVES CLIENT IN THE TALENT SELECTION PROCESS

PROVIDES OVERALL CONTROL; CLIENT CAN SELECT APPROPRIATE PHYSICAL, NETWORK AND VIDEO SECURITY

CULTURAL TRAINING AND TIMELYFEEDBACK TO COUNTER DISPARITY

MULTIPLE METHODS TO COMMUNICATE, SUCH AS EMAILS, GO TO MEETING, PIVOTAL TRACKER, TFS, AND SKYPE, ETC.

DEDICATED TEAM SET UP SPECIFICALLY FOR THE CLIENT'S PURPOSE; FOCUS REMAINS ON THE CLIENTS BUSINESS

STRAIGHTFORWARD CONTRACTS, WHICH ARE TRANSPARENT AND SCALABLE

OFFERS OTHER OPTIONS SUCH AS BOT OR JV RELATIONSHIPS IF DGT DOES NOT WORK OUTAS EXPECTED

48%

Source: http://brandongaille.com/26-us-outsourcing-statistics-and-trends/

ADDITIONAL JOBS INFINANCE, IT, AND OTHERKEY BUSINESS SERVICESAREAS WILL BEOFFSHORED BY 2016(HACKETT GROUP)

VALUE OF OUTSOURCINGIS EXPECTED TOINCREASE TO TOUCH

IN 2015

COMPANIES PLAN TO HIRE MOREOUTSOURCERS THAN FULL OR PART TIMESTAFF IN THE NEXT 12-18 MONTHS

7,50,000$25 BILLION

FUTUREOF OUTSOURCING

OFFSHOREOUTSOURCING TOGROW BYMORE THAN

ANNUALLY(META GROUP)

20%

Reference• http://www2.deloitte.com/content/dam/Deloitte/us/Documents/strategy/us-%209127988%20global-%20outsourcing%20-survey%20-infographic.pdf• http://www.slideshare.net/kmukund7?utm_campaign=profiletracking&utm_medium=sssite&utm_source=ssslideview• http://suyati.com/why-dedicated-offshore-team/• http://www.thehackettgroup.com/about/research-alerts-press-releases/2012/03272012-hackett-research-forecasts-offshoring.jsp• https://www.maxaur.com/outsource_stat.aspx• http://www.computereconomics.com/temp/outsourcingstatisticssamplepages.pdf• http://www.meti.go.jp/english/report/downloadfiles/1-2e.pdf• http://brandongaille.com/26-us-outsourcing-statistics-and-trends/• http://www2.deloitte.com/us/en/pages/strategy/articles/2014-global-outsourcing-and-insourcing-survey.html• http://www.daxx.com/article/IT-Outsourcing-Statistics-Trends-2013-2014• https://www.kpmg-institutes.com/content/dam/kpmg/sharedservicesoutsourcinginstitute/pdf/2014/state-of-outsourcing-2014-exec-findings-hfs.pdf• https://www.kpmg-institutes.com/content/dam/kpmg/sharedservicesoutsourcinginstitute/pdf/2014/state-of-outsourcing-2014-exec-findings-hfs.pdf• http://suyati.com/engagementmodels/dedicated-global-teams/• http://www.slideshare.net/kmukund7/dedicated-global-teams-sm