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Outsourcing
 2019 Outsourcing trends
 Methodologies
 Case Studies
Supporting the Cognitive, interconnected and
digitally enabled enterprise and its ecosystems
Outsourcing in 2019
Leading companies are changing their outsourcing strategy.
Their next steps will determine how they can change
solutions, which partners will generate increased revenue,
how they can construct an incentives structure that
motivates them to innovate, and how to implement and
manage new outsourcing paradigms. History has shown that
it is difficult to catch up if you ignore or delay acting on
outsourcing disruptions. Those who seize this opportunity can
execute real change.
Most organizations recognize that the value of transformation, improved
processes, experienced counsel, and transition play on the success of
their outsourcing programs, though often too late. Today’s disruptive
outsourcing environment is filled with opportunities to enhance innovation
and market competitiveness for forward-thinking organizations.
As you can see, 2019 is an exciting year for outsourcing as new
technologies continue to unravel themselves and change the paradigm,
with blockchain and big data being a great example of this. With such
disruptive concepts as AI finally hitting the market, I know we will soon see
ramifications and possibilities that we have never imagined before,
having tangible effects on every industry, as we know it.
The Future is Now!
The Future is Now!
36% 42% 34%
30% 28% 27%
Use of competitive
bidding process
Use of RFP Increasing the
scope of service
Process Transformation
& Integration
More Service
transition
Third Party
Advisor
Service Provider Selection
According to the Companies stated they would spend more time in RFP or
service provider selection (42 per cent), and use a competitive bidding process
(39 per cent). This may be due to the increased maturity of the procurement and
vendor management functions within organizations. Many clients use a single
source approach for selecting a service provider, with an expectation that the
process will be faster to execute bringing significantly higher risks to the project.
Strategic Planning Approach
Others stated they would take a more strategic approach to planning a
new outsourcing initiative: increasing the scope of service (34 per cent);
transforming the process rather than lifting and shifting (30 percent);
investing in more service integration and transition (28 percent); and using
a third-party advisor (27 percent).
In 2019 - Majority of leading companies
are looking for ecosystems driven
innovation to fuel growth
The Future is Now!
In 2019, companies will have to change their outsourcing strategy.
Their next steps will determine how they can change solutions, which
partners will generate increased revenue, how they can construct an
incentives structure that motivates them to innovate, and how to
implement and manage new outsourcing paradigms. History has
shown that it is difficult to catch up if you ignore or delay acting on
outsourcing disruptions. Those who seize this opportunity can execute
real change.
Disruptive solutions will lead to
additional challenges in 2019.
Data migration, security requirements, and application
optimization/change are a few examples of challenges related to
cloud adoption. Organizational resistance, highly fragmented
processes, and regulatory restraints remain as common challenges
having to do with RPA adoption. Today, disruptive outsourcing is about
collaborating with partners in the marketplace to integrate services
that organisations can’t build on their own to innovate, transform,
grow, and shake up their competitors.
Outsourcing-led transformations can address both business and IT
challenges. They have the potential to bring about a dramatic change
to the outsourcing industry like never before.
This will result in cost reductions, though many organisations expect to
invest some of those savings into business investments, particularly
when doing so can eradicate costs elsewhere. With disruptive
outsourcing, the only limit is imagination.
To move forward effectively, organisations must be thoughtful and
proactive in every step of their outsourcing evolution, whether choosing
service providers, negotiating flexible contracts, implementing a strong
governance program, managing cybersecurity, addressing regulatory
issues, or implementing robust service integration. Most organisations
understand that now is the time to capitalize and get ahead of the
competition, and disruptive outsourcing is the approach to take.
Improving the Customer Experience
Customers are the lifeblood of any business. A recent survey was created where
leading marketing experts were solicited for their advice in creating an exemplary
customer experience. The survey, entitled, “A Look Ahead: Business Process
Outsourcing by the Numbers,” included a detailed questionnaire to help answer key
questions that define where the customer originates, what they want, and how
companies can best serve them. Using this survey, the next steps should include
sharing insights with your BPO partner in order to provide predictable, standard
processes, backed by innovative technology.
Data migration & Security Requirement Trends
Recently, Deloitte conducted a survey of 500 leaders representing a wide range of
organizations with operational footprints in the Americas, Europe, and Asia. The
executives responding to the survey represented more than 25 different sectors across
six industries.
The results of Deloitte’s survey are noteworthy. Disruptive outsourcing led the survey
responses among the respondents, followed by cloud and automation as factors that
will fundamentally transform traditional outsourcing in 2019. In fact, three key trends
emerged from Deloitte’s outsourcing survey:
Enabling competitive advantage.
Among 2019’s trends, disruptive outsourcing, when executed well, will deliver a
competitive advantage by transforming the way organisations operate, making them
more agile, efficient, and effective. Organisations are Embracing Disruptive
Outsourcing Technologies such as Cloud and Robotic Process Automation (RPA).
The Future is Now!
In 2019, companies will have to change their outsourcing strategy.
Their next steps will determine how they can change solutions, which
partners will generate increased revenue, how they can construct an
incentives structure that motivates them to innovate, and how to
implement and manage new outsourcing paradigms. History has
shown that it is difficult to catch up if you ignore or delay acting on
outsourcing disruptions. Those who seize this opportunity can execute
real change.
Disruptive Outsourcing
The Future is Now!
The Asian-Pacific (APAC) marketplace
continues its reign as the world’s dominant
IT outsourcing region (paywall) despite
growing competition across South America,
Eastern Europe and Africa.
Trend No. 1: Talent Shortages Will Keep All Outsourcing On The Table
While the push into rapidly advancing areas of tech innovation is a growing reason
for businesses to outsource, companies will also continue to leverage APAC providers
for more traditional IT outsourcing, such as help desk and support services. The reason
is simple: resource shortages.
Trend No. 2: Senior Project Leaders Move In-House
The rapid pace of digital change and complex emerging technologies like AI,
robotics and sophisticated analytics have many executive business leaders feeling
disconnected from the disruptions that affect their business.
Trend No. 3: Shifting Models Among The Biggest Players
Many are changing their models to compete differently. Industry giants are cutting
back local APAC talent and building up smaller, localized teams in key geographies..
Trend No. 4: Evolving From Customer Service To Customer Experience
Business drivers for outsourcing have changed recently. Whereas once businesses
named “cost savings,” “increasing operational efficiency” and “accessing new skills”
the top three reasons to outsource, “improving the customer experience” is now the
second most-cited reason for outsourcing.
Trend No. 5: Re-Skilling Becomes A New Normal
Training departments are a new and/or expanding addition for many outsourcing
centers. The digital skills required to support AI, deep computer learning, data
analytics and robotics projects change quickly. To keep pace with client demands,
many outsourcing organizations are also serving as centers of education and
training.
Asia Pacific
The Future is Now!
Growth of robotic process automation (RPA)
Outsourcing companies and third-party service providers
leverage RPA and human customer service agents to make sure
that queries, complaints, and feedback from users are
immediately directed to a channel or recipient.
The functions of RPA are more far-reaching than handling
messages from customers. RPA is also ideal for high-volume
tasks, such as data entry involving financial transactions. This is
due to its ability to analyze the data being received from software-
based processes based on a set of rules, and then create triggers
for appropriate actions, responses, or communication with other
systems. Of course, human intervention will not be lost, as people
will still be handling cognitive-based tasks and make the
appropriate judgment calls.
Another factor that makes RPA a popular outsourcing solution is
that it integrates seamlessly with multiple applications. Thus,
there’s no need to build new infrastructures as this activity could
disrupt your workflow or affect the timeliness of your deliverables.
2019 Trends
RPA
The Future is Now!
2019 Trends
Security
Doubling down on data privacy and cybersecurity
A recent study by Computer Economics found that as more and more
companies outsource their tech and data projects, service providers
are working on the double to ensure the robustness and integrity of
their IT infrastructure, including data repositories.
In fact, 48% of respondents from the same study claimed that they’re
increasing IT security outsourcing to boost their defenses.
.
Globally, there’s a drive to protect and preserve customer data. A case
in point is the General Data Protection Regulation or GDPR. The
GDPR is a law that was established by the European Union (EU) to
guide businesses and industries around the ethics and legalities of
handling customer data.
With the GDPR in effect, doubts or uncertainties about handing over
proprietary and customer data to third-party companies are waning
among outsourcing clients.
In light of historical cases of data leak and the GDPR, cybersecurity
will likely move up the priority list of many businesses.
The Future is Now!
2019 Trends
As-a-Service
As-a-service is increasing for large
businesses
Cloud computing can significantly increase infrastructure
costs for large businesses though various as-a-service
solutions. As-a-Service grew by +159% in 3 years with an
annual spend value of over $6Bn in 2019.
Software as a Service (SaaS) is the most common as-a-
service cloud solution for businesses. Most SaaS applications
do not require you to download or install the app on your
end. However, the vendor manages your data, servers,
networking, and a host of other technical issues.
Platform as a Service (PaaS) refers to when you use a
platform hosted by the provider, so your developers can
build a software specific to your business requirements. The
platform has built-in software components to help you in
designing your software, and the provider takes care of your
operating systems, software updates, and infrastructure
Infrastructure as a Service (IaaS) is when you outsource the
management of your servers, hard drives, virtualization, and
network without physically maintaining them. Due to the
scalability of this service, you can purchase hardware
resources on-demand.
The Future is Now!
Seven Steps Methodology
Methodologies
Outsourcing: methodology for selecting
suppliers criterion for competitive advantage
The Future is Now!
GUIDELINES
ASSESSING POTENTIAL OUTSOURCING OPPORTUNITIES
Make or buy analysis - NOT JUST TARGETING COST REDUCTION
Examples of value creation
- Providing access to leading technology or a service critical to customers value perception
- Contributing to innovation
- Offering a real value to end customers and providing competition advantages
- Concerning a core Domain/Activity not technically stable
- Risks in supply dependency in case of outsourcing
- Contributing to corporate transformation strategy
MANAGED
PROCUREMENT
SERVICES
The Future is Now!
The Future is Now!
OUTSOURCING NETWORK
OPERATIONS & MAINTENANCE
Outsourcing elements of network and maintenance operations. Many outsourcing
manufacturing partners claim that they are able of cutting costs and expenses by 20 to 30
percent, reducing headcount by 30-40 percent, improving lines per employee by 50 percent and
increasing revenues per employee by upwards of 50 percent. Lifting operating profits by 10 to 20
percent. Combined with improved cash flows, reduction in capital expenses and freeing up
management to focus on customer-centric issues, the impact on shareholder value has been
extremely positive.
The Future is Now!
 Network planning and development. This function typically incorporates the network planning
and design activities, which most operators view as strategic and are therefore not willing to
consider for outsourcing. However, a few operators are beginning to change their minds—
believing that certain technology providers can perform this function more effectively if they
openly agree to best design criteria.
 Network engineering. Operators are split as to whether or not the actual engineering of the
network must be retained in-house, with some operators expressing concerns about the
security of the network if it is outsourced. Ensuring security and protecting network integrity
are elements to be considered in case of outsourcing option.
 Construction. Most operators already outsource network construction to partner
manufacturer who are outsourcing it to subcontractors but continue to manage it to control
quality and performance. These manufacturers retain the materials management function to
ensure quality and price.
 Network documentation. An electronic format that is outsourced to a qualified provider.
Supporting the improvement of service provisioning, and key performance indicators (KPIs) for
repair and maintenance. Operators must keep ownership of the database for maintaining
the value of outsourcing.
 Network management NOC. Operators oversee routing traffic by handling peak surges,
establishing network priorities and restoring service as strategic functions.
 Service provisioning and assurance. Service activation. Thousands of work orders are issued,
each of which require special skills and expertise to complete. By necessity, service
provisioning is decentralized and comprises the largest segment of the network workforce.
Operators that outsource this function do so because they recognize that an outside provider
can increase efficiencies by automating processes, improving records management and
cross training the workforce.
 Service assurance is divided into on-demand and non-demand activities. On-demand
activities have a direct impact on customer satisfaction, while non-demand activities are
preventive maintenance calls, which have a direct impact on the demand activity and can
extend the life of network components. As with service provisioning, this is a decentralized
function that encompasses a significant part of the workforce.
 Dispatch. The daily scheduling of customer provisioning and repairs is integrally linked to an
operator's workforce management system. Dispatch is typically integrated with service
provisioning and assurance and has an impact on the overall network KPIs. Therefore, an
operator that decides to outsource service provisioning and assurance should outsource
dispatch to the same provider.
 Logistics and warehousing. Operating a network requires a significant logistics capability.
Maintaining inventory levels requires considerable amounts of capital, which only creates
value once it is activated. Warehouse operations are expensive and do not provide much in
the way of customer value. Lost, inactive or underused inventory is not an easily identified
expense—and few operators are able to track assets at the item level.
Outsourcing elements of network
and maintenance operations
The Future is Now!
An initial due diligence provides a basis for building a strong outsourcing business case.
This should incorporate all "in-scope" activities, such as identifying all costs including:
 Support costs
 Outlining forecasts
 Potential rate of return,
 Valuing all assets,
 Construction & Civil Works,
 Logistics and materials procurement
A well-defined program management plan will ensure that the business case is
developed around actual costs that can be offset by network outsourcing. It will also
identify potential risks. These mostly involve process and governance issues.
Employees might reject outsourcing strategy, claiming the benefits can be achieved
without outsourcing. It is key that improvement is made prior to an outsourcing strategy
rollout.
This will alleviate confusion brought on by outsourcing suppliers that have a slightly
different approach to network outsourcing and will try to steer operators accordingly.
 During this process, the operator should ensure that the potential provider can meet
the required responsibilities, can be held accountable for its performance as
measured by defined service level agreements (SLAs) or key performance indicators,
and has the scale necessary to achieve the expected cost reductions.
 Commercial aspects: Operators should pay special attention to the commercial
aspects of the outsourcing provisions. For example, it is critical to split the scope of
work into distinct services, identify a clear scope of work and define responsibilities for
each service. Make it "modular" to provide the flexibility necessary to accommodate
changes in market conditions, technology and services.
Building the Business Case
Internal improvements prior to outsourcing
Formal performance evaluation process
The Future is Now!
For compensation, it is best to establish a fixed/variable scheme. This provides the
flexibility that fluctuating markets require and the month-to-month predictability that an
operator needs. Also, firms that establish specific KPIs that properly reflect the targets of
their sales and marketing organizations have a better chance of meeting their goals. Strict
forecasting requirements will ensure that providers deliver the expected services with the
targeted KPIs and SLAs, while penalties for falling short should be incorporated into the
agreement.
In addition, if tangible financial rewards can be linked to the provider's overall
performance, put them into the agreement as well. All of the commercial elements should
be incorporated into a master agreement with supporting service documents that can be
modified as conditions for a specific service change. Step-in rights and governance along
with exit, liability, renewal and key operating provisions should be addressed in the master
agreement.
Finally, given the complexities of most outsourcing agreements, a strong legal team,
supported by experienced outside legal counsel, is generally required. The commercial
terms should be agreed upon during the evaluation process and nailed down in a detailed
memorandum of understanding early in the process.
Ensure executive-level involvement. Top executives must be involved from the
beginning of the network outsourcing project. The board of directors and, if appropriate,
supervisory boards need to be advised and updated throughout the process.
Clearly define the operating model. The scope of activities to be outsourced and
the interfaces that will be required are central elements in the network outsourcing
operating model, aligned with specific service offerings such as DSL provisioning or
assurance. The operating model should be designed to give the provider the flexibility to
make it work and to ensure financial success.
Design the outsourcing process. The right design has a major impact on the overall
benefit to the operator even if the project is stopped at one of the go or no-go decision
points. The four main outsourcing process steps are:
o Optimize relevant processes before outsourcing
o Define distinct phases and make go or no-go decisions at the end of each phase
o Assess what outsourcing offers against the internal improvement options
o Plan implementation on a phased basis to test the operational quality of the selected
provider
Create a life cycle process. Finally, the outsourcing process has to be understood as
a lifecycle that requires re-assessments over time based on changing conditions.
Management needs to continuously monitor the outsourcing agreement and the supplier
to ensure the company is achieving maximum benefits.
MAKE OR BUY ANALYSIS
OF WORKFORCE
The Future is Now!
IT Outsourcing Strategy
The Future is Now!
REZA HAGEL
Chief Procurement Officer – VP Procurement – Principle & Advisor
◎ Management of teams up to 138 FTE across 12 OpCos
◎ Management of Yearly indirect Procurement Spend up to $1.2bn - Savings 11.3%
◎ Strategy - Group – Regional, Local business unit strategies and plans that drove EBIT growth
◎ Transformation - Delivered procurement transformation for TMT organizations 1K- 200k FTE
◎ Outsourcing & Offshoring ITO-BPO-ODM-OEMs (India, China, Korea, Taiwan, USA, Africa)
Author
Head of Portfolio Management – Head of Product Planning ODMs
◎ Commercial - Grew new business as P&L accountable /
◎ Technology roadmaps and product & content line-up
◎ Innovation - €1B products globally
Hardware: Waterproof and Shock resistant, M2M Sport Watch - Step Counter...
Concepts: Music Mobile Phones - Fashion Mobile Phones - Sport Mobile Phones
20 years of business leadership experience from Fortune
Global 500 companies and management consulting with
an excellent track record of delivering business results to
organizations in EMEA, APAC, NAM, LAM & MEA.
Product Development – Dassault Systems
◎ Development of training materials for Catia V5
◎ Training and coaching of products designers during assignments
◎ Clients including Ericsson, Volvo Cars, Saab Automotive
◎ Successfully develop new Scania account leading to 3years exclusive training and
support contract
The Future is Now!
A Promised based Senior
advisory
Created by Executives for Executives

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Outsourcing 2019

  • 1. Outsourcing  2019 Outsourcing trends  Methodologies  Case Studies Supporting the Cognitive, interconnected and digitally enabled enterprise and its ecosystems
  • 2. Outsourcing in 2019 Leading companies are changing their outsourcing strategy. Their next steps will determine how they can change solutions, which partners will generate increased revenue, how they can construct an incentives structure that motivates them to innovate, and how to implement and manage new outsourcing paradigms. History has shown that it is difficult to catch up if you ignore or delay acting on outsourcing disruptions. Those who seize this opportunity can execute real change. Most organizations recognize that the value of transformation, improved processes, experienced counsel, and transition play on the success of their outsourcing programs, though often too late. Today’s disruptive outsourcing environment is filled with opportunities to enhance innovation and market competitiveness for forward-thinking organizations. As you can see, 2019 is an exciting year for outsourcing as new technologies continue to unravel themselves and change the paradigm, with blockchain and big data being a great example of this. With such disruptive concepts as AI finally hitting the market, I know we will soon see ramifications and possibilities that we have never imagined before, having tangible effects on every industry, as we know it. The Future is Now!
  • 3. The Future is Now! 36% 42% 34% 30% 28% 27% Use of competitive bidding process Use of RFP Increasing the scope of service Process Transformation & Integration More Service transition Third Party Advisor Service Provider Selection According to the Companies stated they would spend more time in RFP or service provider selection (42 per cent), and use a competitive bidding process (39 per cent). This may be due to the increased maturity of the procurement and vendor management functions within organizations. Many clients use a single source approach for selecting a service provider, with an expectation that the process will be faster to execute bringing significantly higher risks to the project. Strategic Planning Approach Others stated they would take a more strategic approach to planning a new outsourcing initiative: increasing the scope of service (34 per cent); transforming the process rather than lifting and shifting (30 percent); investing in more service integration and transition (28 percent); and using a third-party advisor (27 percent). In 2019 - Majority of leading companies are looking for ecosystems driven innovation to fuel growth
  • 4. The Future is Now! In 2019, companies will have to change their outsourcing strategy. Their next steps will determine how they can change solutions, which partners will generate increased revenue, how they can construct an incentives structure that motivates them to innovate, and how to implement and manage new outsourcing paradigms. History has shown that it is difficult to catch up if you ignore or delay acting on outsourcing disruptions. Those who seize this opportunity can execute real change. Disruptive solutions will lead to additional challenges in 2019. Data migration, security requirements, and application optimization/change are a few examples of challenges related to cloud adoption. Organizational resistance, highly fragmented processes, and regulatory restraints remain as common challenges having to do with RPA adoption. Today, disruptive outsourcing is about collaborating with partners in the marketplace to integrate services that organisations can’t build on their own to innovate, transform, grow, and shake up their competitors. Outsourcing-led transformations can address both business and IT challenges. They have the potential to bring about a dramatic change to the outsourcing industry like never before. This will result in cost reductions, though many organisations expect to invest some of those savings into business investments, particularly when doing so can eradicate costs elsewhere. With disruptive outsourcing, the only limit is imagination. To move forward effectively, organisations must be thoughtful and proactive in every step of their outsourcing evolution, whether choosing service providers, negotiating flexible contracts, implementing a strong governance program, managing cybersecurity, addressing regulatory issues, or implementing robust service integration. Most organisations understand that now is the time to capitalize and get ahead of the competition, and disruptive outsourcing is the approach to take.
  • 5. Improving the Customer Experience Customers are the lifeblood of any business. A recent survey was created where leading marketing experts were solicited for their advice in creating an exemplary customer experience. The survey, entitled, “A Look Ahead: Business Process Outsourcing by the Numbers,” included a detailed questionnaire to help answer key questions that define where the customer originates, what they want, and how companies can best serve them. Using this survey, the next steps should include sharing insights with your BPO partner in order to provide predictable, standard processes, backed by innovative technology. Data migration & Security Requirement Trends Recently, Deloitte conducted a survey of 500 leaders representing a wide range of organizations with operational footprints in the Americas, Europe, and Asia. The executives responding to the survey represented more than 25 different sectors across six industries. The results of Deloitte’s survey are noteworthy. Disruptive outsourcing led the survey responses among the respondents, followed by cloud and automation as factors that will fundamentally transform traditional outsourcing in 2019. In fact, three key trends emerged from Deloitte’s outsourcing survey: Enabling competitive advantage. Among 2019’s trends, disruptive outsourcing, when executed well, will deliver a competitive advantage by transforming the way organisations operate, making them more agile, efficient, and effective. Organisations are Embracing Disruptive Outsourcing Technologies such as Cloud and Robotic Process Automation (RPA). The Future is Now! In 2019, companies will have to change their outsourcing strategy. Their next steps will determine how they can change solutions, which partners will generate increased revenue, how they can construct an incentives structure that motivates them to innovate, and how to implement and manage new outsourcing paradigms. History has shown that it is difficult to catch up if you ignore or delay acting on outsourcing disruptions. Those who seize this opportunity can execute real change. Disruptive Outsourcing
  • 6. The Future is Now! The Asian-Pacific (APAC) marketplace continues its reign as the world’s dominant IT outsourcing region (paywall) despite growing competition across South America, Eastern Europe and Africa. Trend No. 1: Talent Shortages Will Keep All Outsourcing On The Table While the push into rapidly advancing areas of tech innovation is a growing reason for businesses to outsource, companies will also continue to leverage APAC providers for more traditional IT outsourcing, such as help desk and support services. The reason is simple: resource shortages. Trend No. 2: Senior Project Leaders Move In-House The rapid pace of digital change and complex emerging technologies like AI, robotics and sophisticated analytics have many executive business leaders feeling disconnected from the disruptions that affect their business. Trend No. 3: Shifting Models Among The Biggest Players Many are changing their models to compete differently. Industry giants are cutting back local APAC talent and building up smaller, localized teams in key geographies.. Trend No. 4: Evolving From Customer Service To Customer Experience Business drivers for outsourcing have changed recently. Whereas once businesses named “cost savings,” “increasing operational efficiency” and “accessing new skills” the top three reasons to outsource, “improving the customer experience” is now the second most-cited reason for outsourcing. Trend No. 5: Re-Skilling Becomes A New Normal Training departments are a new and/or expanding addition for many outsourcing centers. The digital skills required to support AI, deep computer learning, data analytics and robotics projects change quickly. To keep pace with client demands, many outsourcing organizations are also serving as centers of education and training. Asia Pacific
  • 7. The Future is Now! Growth of robotic process automation (RPA) Outsourcing companies and third-party service providers leverage RPA and human customer service agents to make sure that queries, complaints, and feedback from users are immediately directed to a channel or recipient. The functions of RPA are more far-reaching than handling messages from customers. RPA is also ideal for high-volume tasks, such as data entry involving financial transactions. This is due to its ability to analyze the data being received from software- based processes based on a set of rules, and then create triggers for appropriate actions, responses, or communication with other systems. Of course, human intervention will not be lost, as people will still be handling cognitive-based tasks and make the appropriate judgment calls. Another factor that makes RPA a popular outsourcing solution is that it integrates seamlessly with multiple applications. Thus, there’s no need to build new infrastructures as this activity could disrupt your workflow or affect the timeliness of your deliverables. 2019 Trends RPA
  • 8. The Future is Now! 2019 Trends Security Doubling down on data privacy and cybersecurity A recent study by Computer Economics found that as more and more companies outsource their tech and data projects, service providers are working on the double to ensure the robustness and integrity of their IT infrastructure, including data repositories. In fact, 48% of respondents from the same study claimed that they’re increasing IT security outsourcing to boost their defenses. . Globally, there’s a drive to protect and preserve customer data. A case in point is the General Data Protection Regulation or GDPR. The GDPR is a law that was established by the European Union (EU) to guide businesses and industries around the ethics and legalities of handling customer data. With the GDPR in effect, doubts or uncertainties about handing over proprietary and customer data to third-party companies are waning among outsourcing clients. In light of historical cases of data leak and the GDPR, cybersecurity will likely move up the priority list of many businesses.
  • 9. The Future is Now! 2019 Trends As-a-Service As-a-service is increasing for large businesses Cloud computing can significantly increase infrastructure costs for large businesses though various as-a-service solutions. As-a-Service grew by +159% in 3 years with an annual spend value of over $6Bn in 2019. Software as a Service (SaaS) is the most common as-a- service cloud solution for businesses. Most SaaS applications do not require you to download or install the app on your end. However, the vendor manages your data, servers, networking, and a host of other technical issues. Platform as a Service (PaaS) refers to when you use a platform hosted by the provider, so your developers can build a software specific to your business requirements. The platform has built-in software components to help you in designing your software, and the provider takes care of your operating systems, software updates, and infrastructure Infrastructure as a Service (IaaS) is when you outsource the management of your servers, hard drives, virtualization, and network without physically maintaining them. Due to the scalability of this service, you can purchase hardware resources on-demand.
  • 10. The Future is Now! Seven Steps Methodology Methodologies Outsourcing: methodology for selecting suppliers criterion for competitive advantage
  • 11. The Future is Now! GUIDELINES ASSESSING POTENTIAL OUTSOURCING OPPORTUNITIES Make or buy analysis - NOT JUST TARGETING COST REDUCTION Examples of value creation - Providing access to leading technology or a service critical to customers value perception - Contributing to innovation - Offering a real value to end customers and providing competition advantages - Concerning a core Domain/Activity not technically stable - Risks in supply dependency in case of outsourcing - Contributing to corporate transformation strategy
  • 13. The Future is Now! OUTSOURCING NETWORK OPERATIONS & MAINTENANCE Outsourcing elements of network and maintenance operations. Many outsourcing manufacturing partners claim that they are able of cutting costs and expenses by 20 to 30 percent, reducing headcount by 30-40 percent, improving lines per employee by 50 percent and increasing revenues per employee by upwards of 50 percent. Lifting operating profits by 10 to 20 percent. Combined with improved cash flows, reduction in capital expenses and freeing up management to focus on customer-centric issues, the impact on shareholder value has been extremely positive.
  • 14. The Future is Now!  Network planning and development. This function typically incorporates the network planning and design activities, which most operators view as strategic and are therefore not willing to consider for outsourcing. However, a few operators are beginning to change their minds— believing that certain technology providers can perform this function more effectively if they openly agree to best design criteria.  Network engineering. Operators are split as to whether or not the actual engineering of the network must be retained in-house, with some operators expressing concerns about the security of the network if it is outsourced. Ensuring security and protecting network integrity are elements to be considered in case of outsourcing option.  Construction. Most operators already outsource network construction to partner manufacturer who are outsourcing it to subcontractors but continue to manage it to control quality and performance. These manufacturers retain the materials management function to ensure quality and price.  Network documentation. An electronic format that is outsourced to a qualified provider. Supporting the improvement of service provisioning, and key performance indicators (KPIs) for repair and maintenance. Operators must keep ownership of the database for maintaining the value of outsourcing.  Network management NOC. Operators oversee routing traffic by handling peak surges, establishing network priorities and restoring service as strategic functions.  Service provisioning and assurance. Service activation. Thousands of work orders are issued, each of which require special skills and expertise to complete. By necessity, service provisioning is decentralized and comprises the largest segment of the network workforce. Operators that outsource this function do so because they recognize that an outside provider can increase efficiencies by automating processes, improving records management and cross training the workforce.  Service assurance is divided into on-demand and non-demand activities. On-demand activities have a direct impact on customer satisfaction, while non-demand activities are preventive maintenance calls, which have a direct impact on the demand activity and can extend the life of network components. As with service provisioning, this is a decentralized function that encompasses a significant part of the workforce.  Dispatch. The daily scheduling of customer provisioning and repairs is integrally linked to an operator's workforce management system. Dispatch is typically integrated with service provisioning and assurance and has an impact on the overall network KPIs. Therefore, an operator that decides to outsource service provisioning and assurance should outsource dispatch to the same provider.  Logistics and warehousing. Operating a network requires a significant logistics capability. Maintaining inventory levels requires considerable amounts of capital, which only creates value once it is activated. Warehouse operations are expensive and do not provide much in the way of customer value. Lost, inactive or underused inventory is not an easily identified expense—and few operators are able to track assets at the item level. Outsourcing elements of network and maintenance operations
  • 15. The Future is Now! An initial due diligence provides a basis for building a strong outsourcing business case. This should incorporate all "in-scope" activities, such as identifying all costs including:  Support costs  Outlining forecasts  Potential rate of return,  Valuing all assets,  Construction & Civil Works,  Logistics and materials procurement A well-defined program management plan will ensure that the business case is developed around actual costs that can be offset by network outsourcing. It will also identify potential risks. These mostly involve process and governance issues. Employees might reject outsourcing strategy, claiming the benefits can be achieved without outsourcing. It is key that improvement is made prior to an outsourcing strategy rollout. This will alleviate confusion brought on by outsourcing suppliers that have a slightly different approach to network outsourcing and will try to steer operators accordingly.  During this process, the operator should ensure that the potential provider can meet the required responsibilities, can be held accountable for its performance as measured by defined service level agreements (SLAs) or key performance indicators, and has the scale necessary to achieve the expected cost reductions.  Commercial aspects: Operators should pay special attention to the commercial aspects of the outsourcing provisions. For example, it is critical to split the scope of work into distinct services, identify a clear scope of work and define responsibilities for each service. Make it "modular" to provide the flexibility necessary to accommodate changes in market conditions, technology and services. Building the Business Case Internal improvements prior to outsourcing Formal performance evaluation process
  • 16. The Future is Now! For compensation, it is best to establish a fixed/variable scheme. This provides the flexibility that fluctuating markets require and the month-to-month predictability that an operator needs. Also, firms that establish specific KPIs that properly reflect the targets of their sales and marketing organizations have a better chance of meeting their goals. Strict forecasting requirements will ensure that providers deliver the expected services with the targeted KPIs and SLAs, while penalties for falling short should be incorporated into the agreement. In addition, if tangible financial rewards can be linked to the provider's overall performance, put them into the agreement as well. All of the commercial elements should be incorporated into a master agreement with supporting service documents that can be modified as conditions for a specific service change. Step-in rights and governance along with exit, liability, renewal and key operating provisions should be addressed in the master agreement. Finally, given the complexities of most outsourcing agreements, a strong legal team, supported by experienced outside legal counsel, is generally required. The commercial terms should be agreed upon during the evaluation process and nailed down in a detailed memorandum of understanding early in the process. Ensure executive-level involvement. Top executives must be involved from the beginning of the network outsourcing project. The board of directors and, if appropriate, supervisory boards need to be advised and updated throughout the process. Clearly define the operating model. The scope of activities to be outsourced and the interfaces that will be required are central elements in the network outsourcing operating model, aligned with specific service offerings such as DSL provisioning or assurance. The operating model should be designed to give the provider the flexibility to make it work and to ensure financial success. Design the outsourcing process. The right design has a major impact on the overall benefit to the operator even if the project is stopped at one of the go or no-go decision points. The four main outsourcing process steps are: o Optimize relevant processes before outsourcing o Define distinct phases and make go or no-go decisions at the end of each phase o Assess what outsourcing offers against the internal improvement options o Plan implementation on a phased basis to test the operational quality of the selected provider Create a life cycle process. Finally, the outsourcing process has to be understood as a lifecycle that requires re-assessments over time based on changing conditions. Management needs to continuously monitor the outsourcing agreement and the supplier to ensure the company is achieving maximum benefits.
  • 17. MAKE OR BUY ANALYSIS OF WORKFORCE The Future is Now!
  • 18. IT Outsourcing Strategy The Future is Now!
  • 19. REZA HAGEL Chief Procurement Officer – VP Procurement – Principle & Advisor ◎ Management of teams up to 138 FTE across 12 OpCos ◎ Management of Yearly indirect Procurement Spend up to $1.2bn - Savings 11.3% ◎ Strategy - Group – Regional, Local business unit strategies and plans that drove EBIT growth ◎ Transformation - Delivered procurement transformation for TMT organizations 1K- 200k FTE ◎ Outsourcing & Offshoring ITO-BPO-ODM-OEMs (India, China, Korea, Taiwan, USA, Africa) Author Head of Portfolio Management – Head of Product Planning ODMs ◎ Commercial - Grew new business as P&L accountable / ◎ Technology roadmaps and product & content line-up ◎ Innovation - €1B products globally Hardware: Waterproof and Shock resistant, M2M Sport Watch - Step Counter... Concepts: Music Mobile Phones - Fashion Mobile Phones - Sport Mobile Phones 20 years of business leadership experience from Fortune Global 500 companies and management consulting with an excellent track record of delivering business results to organizations in EMEA, APAC, NAM, LAM & MEA. Product Development – Dassault Systems ◎ Development of training materials for Catia V5 ◎ Training and coaching of products designers during assignments ◎ Clients including Ericsson, Volvo Cars, Saab Automotive ◎ Successfully develop new Scania account leading to 3years exclusive training and support contract
  • 20. The Future is Now! A Promised based Senior advisory Created by Executives for Executives