Why Even SMEs Should Outsource

1. WHY EVEN SMES SHOULD OUTSOURCE IT'S A BUSINESS TREND OFFSHORE OUTSOURCING BY SECTOR 53 % MANUFACTURING 2,637,239 43 % IT SERVICES TOTAL NUMBER OF US JOBS OUTSOURCED IN 2013 38 % R&D 26 % DISTRIBUTION 12 % CALL OR HELP CENTERS COUNTRIES ARE WILLING TO HELP TOP 10 COUNTRIES YOU CAN OUTSOURCE India Philippines Ireland Poland China BIGGEST GAINERS City 2012 2013 Costa Rica San Jose #18 #13 Malaysia Kuala Lumpur #28 #19 Uruguay Montevideo #43 #37 Costa Rica Vietnam Czech Republic Brazil Malaysia Colombia Bogota #55 # 49 BIG BRANDS THRIVES BECAUSE OF OUTSOURCING TOP 10 OUTSOURCING COMPANIES COMPANY OUTSOURCED JOBS COMPANY OUTSOURCED JOBS IBM 63,700 General Electric 14,250 EDS 22,400 Convergys 14,000 Dell 17,450 Accenture 13,000 Cognizant 15,000 Computer Sciences Corp 10,800 Siemens AG 15,000 Intel 10,426 REALISTIC BENEFITS TOP REASONS WHY COMPANIES OUTSOURCE 44% 34% 22% 15% GAIN ACCESS TO IT RESOURCES UNAVAILABLE INTERNALLY ACCELERATE COMPANY IMPROVE BUSINESS ACCELERATE PROJECT REORGANIZATION OR CUSTOMER FOCUS / TRANSFORMATION 31% 28% 15% 9% GAIN ACCESS IMPROVE BUSINESS REDUCE TIME FREE UP INTERNAL TO MANAGEMENT OR CUSTOMER FOCUS TO MARKET RESOURCES EXPERTISE UNAVAILABLE INTERNALLY WHAT COMPANIES SAY ON OUTSOURCING CHART 1 CHART 2 WHICH BEST DESCRIBES THE EXTENT TO WHICH YOUR COMPANY ENGAGES IN OUTSOURCING? WHICH FUNCTIONS (OR ACTIVITIES WITHIN FUNCTIONS) HAVE YOU OUTSOURCED? WEHAVE NOT OUTSOURCED ANY FUNCTIONS YET; WE'RE JUST EXPLORIŃG OPTIONS NOW FINANCE 6% 11% PROCUREMENT 14% IT 33% CUSTOMER SERVICE/ CALL CENTER WE HAVE OUTSOURCED MULTIPLE FUNCTIONS 22% 81% WE HAVE OUTSOURCED A SINGLE FUNCTION HR 0% 25% CHART 3 CHART 4 WHICH BEST DESCRIBES THE EXTENT TO WHICH YOUR COMPANY ENGAGES IN OUTSOURCING? HOW WOULD YOU DESCRIBE THE OVERWALL VALUE DERIVED FROM YOUR COMPANY'S OUTSOURCING ARRANGEMENTS POST-IMPLEMENTATION COMPARED TO WHAT WAS EXPECTED PRE-DEAL? TERMINATED ONE OR MORE OUTSOURCING ARRANGEMENTS 9% EXCEEDED EXPECTATIONS 12% WE DERIVED LESS VALUE THAN WE EXPECTED INCREASED THE USED OF OUTSOURCING WE DERIVED 57% THE VALUE WE EXPECTED SIGNIFICANTLY 57% RESTRUCTURED ONE OR MORE OUTSOURCING AGREEMENTS 34% CHART 5 WHICH OF THE FOLLOWING ARE THE MOST SIGNIFICANT FACTORS IN THE SUCCESS OF YOU OUTSOURCING ARRANGEMENTS? OUR CORPORATE CULTURES ARE COMPATIBLE WE HAVE FOLLOWED OUR STRATEGIC VISION AND PLAN 6% 6% WE ACTIVELY MANAGE THE ONGOING RELATIONSHP 50% OPEN COMMUNICATION WITH AFFECTED INDIVIDUAL/GROUPS 12% SENIOR EXECUTIVE SUPPORT AND INVOLVEMENT 35% FREE RESOURCES FOR OTHER PURPOSES 34% CHART 7 WHAT IS YOUR COMPANY'S ANNUAL REVENUE? CHART 6 WHAT ARE YOUR COMPANY'S TOP OBJECTIVES FOR ENTERING OUTSOURCING AGREEMENTS? LESS THAN REDUCE RISK $1 BILLION MORE THAN FUNCTION DIFFICULT TO MANAGE OR OUT OF CONTROL 3% 43% $10 BILLION 43% 3% ACCESS TO WORLD- CLASS CAPABILITIES REDUCE OPERATING COST AND/OR CAPITAL EXPENDITURES 12% $1 BILLION TO $4.99 BILLION 50% 6% FREE RESOURCES FOR OTHER PURPOSES $5 BILLION To $9.99 BILLION 35% 16% 5 KEY REASONS TO OUTSOURCE CONTROL 1.) OPERATINGCOST LOWER 2.) INFRASTRUCTURE INVESTMENTS FOCUS 3.) ON CORE FUNCTIONS ACCELERATE 4.) TECHNOLOGY MIGRATION OVERCOME 5.) TALENT SHORTAGES BUSINESS BEAN STAL K Sources: Tholons Top 100 2013_Rankings and Report Overview The Conference Board, Inc. - Strategic Outsourcing Conference http://www.statisticbrain.com/outsourcing-statistics-by-country/ http://jobs.lovetoknow.com/Facis_and_Figures_on_Outsourcing http://www.flatworldsolutions.com/articles/advantages-outsourcing-services.php http://www.businessbeanstalk.com/