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OUTSOURCING

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OUTSOURCING

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    1. 02/11/04 Abhilasha Sharma 1 OUTSOURCING The process and the risks involved

    2. 02/11/04 Abhilasha Sharma 2 Definition of outsourcing - what, why and where Different types of contracts Different Risks involved in outsourcing Risk management plan for outsourcing Outline for the presentation

    3. 02/11/04 Abhilasha Sharma 3 Dilbert outsourced

    4. 02/11/04 Abhilasha Sharma 4 OUTSOURCING The basic definition

    5. 02/11/04 Abhilasha Sharma 5 “Outsourcing is the movement of computer-based functions from within an organization to an external environment” by Chapman & Andrade (1998) Transferring occurs for responsibility of the support maintenance of an application portfolio(s) employees consultants supporting that portfolio(s). The definition – what The outsourcing The outsourcing

    6. 02/11/04 Abhilasha Sharma 6 Outsourcing- some statistics

    7. Reasons to outsource - strategic

    8. Reasons to outsource - Tactical

    9. 02/11/04 Abhilasha Sharma 9 Generally successful outsourcing a.       Data processing operations Recruitment – 40 % b.      Network management Administrative modules– 88 % c.       Help desk functions Training and professional development – 29% Probability of success

    10. 02/11/04 Abhilasha Sharma 10 Situationally successful outsourcing a.      Payroll systems Payroll – 23% b.      Personnel systems pension administration – 57 % c.       Benefits systems Probability of success

    11. 02/11/04 Abhilasha Sharma 11 (almost) assured failure Online reservation systems for travel industries Deposit systems for banks Loan/Sales systems for financial companies MRP systems for manufacturers Probability of success

    12. While deciding the vendor

    13. 02/11/04 Abhilasha Sharma 13 Location of the vendor Reference : http://www.telecomsintelligence.com/Outsourcing%20Infopack.pdf

    14. 02/11/04 Abhilasha Sharma 14 OUTSOURCING Writing the contract

    15. 02/11/04 Abhilasha Sharma 15

    16. 02/11/04 Abhilasha Sharma 16 The deal structure The legal basis of the outsourcing agreement, and as such is of fundamental importance. What is a contract ?

    17. 02/11/04 Abhilasha Sharma 17 Fixed price for fixed requirements Static portfolio Fixed price Re-negotiation needed often CMM companies Different Types of contracts

    18. 02/11/04 Abhilasha Sharma 18 Time and material billing Easiest to implement No motivation for process changes Risk Different Types of contracts

    19. 02/11/04 Abhilasha Sharma 19 Price per output delivered Criteria for output not clear Not suitable for third party vendors Different Types of contracts

    20. 02/11/04 Abhilasha Sharma 20 OUTSOURCING The Risk Management

    21. 02/11/04 Abhilasha Sharma 21 Cost and Time over-runs for the project Selection of wrong offshore outsourcing vendor Cultural mismatch with outsourcing partner Political or other instability in outsourced country. Data privacy Intellectual property rights Legal Standing and Access to Arbitration Risks in outsourcing

    22. 02/11/04 Abhilasha Sharma 22 Some statistics

    23. 02/11/04 Abhilasha Sharma 23 1. Understand the project. 2. Divide and conquer – subcontracting. 3. Align incentives. "You'll never have all the information you need to make a decision – if you did, it would be a foregone conclusion, not a decision" Managing the Outsourcing Risks

    24. 02/11/04 Abhilasha Sharma 24 Planning for risks management

    25. 02/11/04 Abhilasha Sharma 25 OUTSOURCING The Conclusion

    26. 02/11/04 Abhilasha Sharma 26 1. Specify requirements in detail 2. Make an explicit decision to outsource 3. Obtain resources 4. Select a vendor 5. Write the contract 6. Build an in-house management team to monitor the project to completion. How to outsource successfully

    27. 02/11/04 Abhilasha Sharma 27 Any questions ??

    28. 02/11/04 Abhilasha Sharma 28 The notes and articles given by Mrs. K. Wilson. http://www.outsourcing.com http://techupdate.zdnet.com/techupdate/stories/main/Top_10_Risks_Offshore_Outsourcing_print.html http://www.outsourcing-toolkit.com/contract.htm http://www.ovitztaylorgates.com/TheITOutsourcingEssentialsGuide.html The references

    29. 02/11/04 Abhilasha Sharma 29 Thanks a lot !!!!!

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