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Vaishali Bansal

on 21 March 2013

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Transcript of Genesis10_Capstone_MidTerm

What we did & what we will do How we determined the TOC in various outsourcing models Understanding Concluding Let's dig deeper!!! SOME NERVE-WRECKING ANALYSIS!! More Research & Analysis and some head banging! What we will do... We are here! Current Outsourcing Statistics Problems with
Outsourcing Genesis10's Business Model Work Statement for this project To conclude that cost gap of offshore vs. onshore IT outsourcing has significantly diminished in last several years
A pitch document or a white paper from CMU which Genesis10 can use while making its sales presentation to sell domestic outsourcing Outsourcing by Sector SWOT Analysis ONSHORE OUTSOURCING NEARSHORE OUTSOURCING OFFSHORE OUTSOURCING Parameters Analysis WEAKNESSES OPPORTUNITIES THREATS STRENGTHS WEAKNESSES OPPORTUNITIES THREATS STRENGTHS WEAKNESSES OPPORTUNITIES THREATS STRENGTHS There have always been two major problems with outsourcing work out of home land -
1. The cost reduction may not remain as effective as they looked initially because of rise in wage rate
2. Various cultural gaps create unnecessary friction in work place Location – less travel cost and time
Highly skilled workers – Critical thinkers
Lower Risk– data security, government regulation, legal, Operational, strategic, transactional
No culture difference
Better physical infrastructure
US federal, state and local governmental actions now prohibit or have created barriers to IT offshoring
States are providing incentives such as training incentives
Less communication issues – project inspection more economically feasible High Wage rate
Cost of layoffs is high
Lack of abundant skilled workers Projects that deal with high customer-facing interactions or high user interactions, On shoring is simpler to engage and has a higher probability of success
Government incentives
Government projects
Mid-market projects and short term projects
Target companies who have an aversion towards offshoring
Hidden cost, rising wages in offshore location.Choose the location wisely - look closely at the number and quality of local colleges Globalization
Rapid spread of internet
Better communication channels, better infrastructure
Emerging economies in the field of IT outsourcing Cultural differences
High attrition rates among employeesLack of creativity and ability to come up with out of the box solutionsEmployees don’t reveal the true status of the project till its too lateLack of world class infrastructure Target mid-market firmsTarget non U.S, non-European marketsTarget high end consulting work currently done by IBM, Accenture Rising wages in IndiaHidden costs associated with rework, bug fixesSome offshore staff not as highly qualified as promised during the contract processWork interruptions due to local political climate Same time zone
Culturally closer than Asia
Less travel time and costs involved
Wage rates less when compared to offshore locations
Good infrastructure (no/less power outages, traffic gridlocks etc.)
No cap on technical visas for Mexican software engineers entering the US
Mexico shares nearly the same communications advantages found in the US Less skilled resources available
Less no of proven vendors (i.e. 6 sigma, CMM, ITIL etc.)Security and privacy issues
English Speaking Population (Mexico 4.5%)
Technology Readiness (Broadband access- 9.2 users per 100 inhabitants)
Government Issues High literacy rate (93% Mexico)
NAFTA membership between U.S., Canada and Mexico which allows free flow of goods and services
Launching of PROSOFT in 2002, a program aimed to advocate the technological industry and maximizing the IT industry's value to USD $15 billion by 2013
Building of technology parks: Monterrey Technology Park for multinational companies; Apodaca Technology Park; and Guadalajara Park, situated in Mexico's Silicon Valley
Mexican government's telecommunications modernization initiative and huge investment in fiber optics and satellite links Offshore locations quoting much less price
Large number of qualified resources available at offshore locations
Certain regions of domestic US locations having same price as near shore locations
Prevalent Corruption ( as per Transparency International report, Mexico scores 3.1/10) Focus on execution and delivery versus continuous strategy and scope reassessment
Expertise and demonstrated performance from our talent and our solutions
Lower cost alternative to higher cost traditional consulting
Greater visibility and metrics in support of ROI Goal for the project The goal of the study is to determine the true cost differential between Offshore vs. Onshore vs. Nearshore IT sourcing by -
Analyzing the pros and cons of domestic outsourcing, nearshoring and offshoring
Analyzing quantitative and qualitative parameters of TCO
Full transcript