Outsourcing Models

Build Operate Transfer

Three primary reasons for offshore operations

1. Reduce cost of doing business

– Labor costs, Infrastructure Costs
– Management Overhead
– Focus on Core Competence
1. Increase speed
– Global delivery model
– Professional Services
1. Tap & Service new markets
– Sell & Service Asia PAC markets
– Tap global talent pool
1. Risk Factors
– Organization risk factors
 Geographical, Political
– Delivery risk factors
 Distributed Delivery expertise
 Which offshore model is best for you?

Project Based Dedicated DC Joint Venture Captive BOT

Center

Start-Up Time Short Short Long Long Short

Term & Short Medium Long Long Flexible

Commitment 1-3 years 4-8 years 8+ years 8+ years

Control Supplier Supplier Joint Client Joint

Process Minimal Supplier Supplier/ Client Integrated

Integrated

ROI Low Low Medium High High

Leverage Low Low Medium High High

Captive Centers - DIY can hurt

• Leadership
– Balance between client culture + local nuances
– Local laws – e.g. tax breaks
• Attracting Talent
– Strong brand needed to attract talent
– Relationships with universities
• Retaining Talent
– HR policies
– Career growth opportunities
– Visa logistics
– Handling churn
• Delivery
– Global delivery is
a different ball game!
BOT is Low Risk & Low Cost
• BOT is Low Cost & Low Risk
• Faster start-up time
• Most leverage with best ROI
• Captive works well when numbers are >400
• Dedicated DC is good for medium term, mid-size
• JV provides medium leverage & control at a cost
Cost

Risk
$2 - 2.5 Million Savings

Cost in $\Hour
Over 3 Years

BOT Vs. Captive Center Ideal

• High initial costs for Captive Center Transfer Point

• Higher delivery risks

• Delivery model not proven to work
offshore
• Understanding of local market Number of People
• Talent acquisition & retention not proven
 BOT Setup & Transition Model
•• PMO
PMO && Governance
Governance •• Organization
Organization structure
structure •• Monitor
Monitor &
& report
report metrics
metrics
•• Shared
Shared Services •• Infrastructure, •• Hire
Hire &
& Train
Train •• Delivery
Delivery Reviews
Reviews •• Co-locate
Co-locate Leadership
Leadership
Infrastructure, Security,
Security, BCP
BCP
•• Align
Align LOB
LOB &
& GDC
GDC •• Knowledge
Knowledge Transfer
Transfer •• Establish •• Plan
Plan Financial
Financial Transfer
•• Tailor
Tailor policies
policies Establish Process
Process Audits
Audits Transfer
Objectives
Objectives •• Transition
Transition projects
projects •• Establish •• Plan
Plan HR
HR Transfer
Transfer
-- HR,
HR, Hiring
Hiring &
& Delivery
Delivery Establish client’s
client’s Indian
Indian
•• Plan
Plan Facility
Facility Transfer
Transfer
subsidiary
subsidiary

Initiate Plan Build Operate Transfer

BOT
BOT Program
Program

Program Management Office

HR & Communications

•• Metrics
Metrics •• Tailor
Tailor HR
HR Policies
Policies
•• Change
Change Management
Management •• Communication
Communication
•• Project
Project Oversight •• Cultural
Cultural Alignment
Alignment
•• Separation
Separation Support
Support

Months
1 3 6 12 36