1. TRENDS, TRAPS AND
EMERGING
OPPORTUNITIES
Rethinking Outsourcing
Atul Vashistha Chairman & CEO

2. 2 2

3. About Neo Advisory
A consulting firm singularly focused on helping organizations Consulting
capitalize on
Outsourcing and Services Globalization Risk Monitoring
Research
Since 1999
Silicon Valley • Bangalore • New York • Chicago • Sao Paulo • Monterrey • Manila • Amsterdam • Prague
3

5. TRENDS

6. Q2 Insights
 Revenue
 Pricing
 Spend
 Utilization
 Talent
© 2010 Neo Advisory & Atul Vashistha
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7. Trend: New Roles Emerging
 Integrator
 Chief Transformation Officer
 Head of Shared Services
Altering organization
structure to aggregate
and buy services
• A business model that
centralizes common
business services
• Leveraging economies of
scale and scope
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

8. Trend: Vehicle for Operational Transformation
Source: AMR Research / Global Services Media, 2009
Sample: 127 Enterprises
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

9. Trend: Convergence of ITO/BPO
Source: Horses for Sources, 2010
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

10. Trend: Attractiveness of Rural Sourcing
 Cost of doing business in low cost locations rising
 Interruptionsin supply
 Cost of sourcing
 Cost of management
 Inflation
 Locations like Omaha, Ann Arbor etc. becoming more
attractive supplementary centers
 Ease of doing business
 Productivity enhancements
 Managing political risk
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

11. Trend: Relationship Models Evolve
 Staff Augmentation to Managed Services
 Focus on SLAs and not resources
 Increased focus on leading indicators
 Benefits accrue to both
 Transaction pricing
 Performance rewards
 Gain sharing
 Suppliers want this. Do you know how to manage this?
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

12. Trend: Collaborative Sourcing
 Time to Sourcing: 12 weeks or less
 Negotiation Process
 Non-negotiable term sheet
 Solution design
 Pricing benchmarks
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

13. Trend: Services Supply Chain: Demand Focus
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

14. Trend: Better Monitoring of Risk
Macro-economic Risk Infrastructure Risk
COUNTRY Financial Risk Business Environment Risk
RISKS Geopolitical Risk Human Resources Risk
Industry Risk Legal Risk
Financial Risk Infrastructure Risk
CITY RISKS Geopolitical Risk Business Environment Risk
Industry Risk Human Resources Risk
Strategy Risk Legal Risk
PROVIDER Financial Risk Client & Service Mix Risk
RISKS
Service Capability Risk
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

15. TRAPS

16. Trap: All Suppliers Are Created Equal
 Asia for scale
 Geographic clusters for time zone/special needs
 Domain Knowledge vs Processing Skills
• Revenue: $22.33 B • Revenue: $6 B
• Market Cap: $26 Billion • Market Cap: $32 B
• Revenue Growth (yoy): -2.1 % • Revenue Growth (yoy): 6.2%
• Profit Margin%: 6.91% • Profit Margin%: 16.94%
• Total Cash: $4B • Total Cash: $2B
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

17. Trap: Not Investing In The Retained Organization
 Strategic Planning
 Architects
 Business Analysts
 Trainers
 Program Leaders
 Vendor Management
 Supply Chain Monitoring
 Single Labor Pool
 Career Movements
 Knowledge Management
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

18. EMERGING OPPORTUNITIES

19. Regional Operations
Beyond U.S.A.  Scouting locations and suppliers to
Operations
service MNC regional operations
 Asia Pacific
 Europe
 South America
 J&J, SAP
 Colombia
© 2010 Neo Advisory & Atul Vashistha
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20. Driving Innovation: Knowledge Management
 Collective Intelligence
 Enabling Collaboration
 Driving Innovation
 Predictive, real time
 Leverage best practices
 Novartis – Cognizant
 UPMC – Accenture - Microsoft
© 2010 Neo Advisory & Atul Vashistha
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21. Vendor Optimization
Making Strategic Partners
responsible for success
New
•
Multi-source
Expanding scope of
Strategic
Partners
existing partners;
Add Scope &
negotiating better terms Re-negotiate
and pricing Current
• Selecting new partners Incremental
New
that can deliver results
Globalization Portfolio
• Identifying vendor
optimization
opportunities
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

22. Expansion of Global Operations
Institutionalizing an enterprise view for
cost reduction and globalization Global
Location 1
Global
Location 2
Business Unit
1
Business Unit
2
 Finding early adopters
 Ensuring buy-in from business Finance & Accounting
units and globally dispersed
Human Resources
units
 CEO/CFO breaking down silos Procurement
Sales & Marketing
Expanding globalization footprint Engineering/Product
Development
• Globalization continues to be
Legal Services
one of the most viable cost
optimization levers
• Evaluating globalization
potential for all common
Currently Potential to Retain
services Globalized Globalize
• Enabling the early adopters
© 2010 Neo Advisory & Atul Vashistha
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23. Leverage Technology To Better Integrate Partners
23
 Learn to manage complex SLAs, outcomes
 Convergence of portfolio, program, project, resource
and performance management
© 2010 Neo Advisory & Atul Vashistha
All rights reserved. Reproduction of this document or any portion thereof without prior written consent is prohibited

24. Atul Vashistha
Chairman atul@neogroup.com
Globalization Wisdom Group atul@neoadvisory.com
Neo Group atul@vashistha.com
Neo Advisory
Best Outsourcing Jobs
4000 Pimlico Dr., 114-108
Pleasanton, CA 94588
www.globalizationwisdom.com