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Preface
Why are corporations such as General Electric, HSBC, IBM, Oracle, and Deutsche Bank transforming their internal services and administrative operations using offshore outsourcing? Can companies that have focused on outsourcing manufacturing for so many years replicate similar cost and productivity improvements by offshoring business processes such as IT, finance and accounting, human resources, customer care, and transaction processing? What can others learn from the market leaders? Is outsourcing offshore a temporary management fad or a long-term business trend?
These are some of the questions that led us to write this book. In Offshore Outsourcing, we introduce readers to offshore strategy creation and implementation. We hope to help managers of all levels tap into the power of the offshore outsourcing trend that is transforming the cost structures and competitive dynamics of several industries.
Slowly but surely, offshore initiatives are resulting in millions of dollars in operational cost savings for corporations like Citigroup, Ford, and American Express. Can your business achieve the same results? The answer is yes. Contrary to many people's fear, you do not have to be a multinational company to reap the benefits of offshore outsourcing. If done well, offshore outsourcing can improve your bottom line and streamline the structure of your organization.
Offshore Outsourcing - Where Do You Start?
When building something new or innovative, you need a clear blueprint. Unfortunately, while there is a lot of general discussion about offshore outsourcing, almost all of it is either anecdotal or simplistic. In order to help you unlock the value of offshore outsourcing, we decode some of the core concepts behind this trend in Offshore Outsourcing. In particular, we illustrate five areas.
- Best Practices. Offshore outsourcing encompasses a broad array of business best practices and skills that are essential ingredients for success. Throughout this book, we use best-practice case studies to show you how to apply offshore outsourcing to many different processes and tasks and maximize the impact of your efforts.
- Business Models. There are many business models for offshore outsourcing. Offshore Outsourcing gives you customizable guidelines that take into account your business needs and readiness for change.
- Process Focus. Whether you decide on information technology outsourcing or business process outsourcing, the potential gains from each are equally impressive. Our priority is to explain how to make offshore outsourcing work in administrative, customer-facing, and transactional areas that are relatively untapped in the quest for cost reduction.
- Creating Your Roadmap. Offshore outsourcing is as much about people, vendor selection, country selection, and project management as it is about cost reduction. Our goal is to show you how to achieve a balance between managing people and improving performance.
- Assessing ROI and Business Risks. Done right, offshore outsourcing can deliver sizable bottom-line impact, but it's a lot of work, and it's not without risks. Offshore Outsourcing sheds light on the dangers and mistakes that can derail an offshore initiative.
It doesn't take a genius to realize that the companies that successfully implement offshore outsourcing are going to put a lot of pressure on their competitors to follow suit. Obtaining even a small cost advantage in today's brutally competitive market place can mean the difference between market leadership and failure.
The Organization of This Book
When we wrote this book we tried to structure it so that a variety of readers, from offshore outsourcing novices to managers in the midst of offshore projects, would find it easy to navigate. While you may prefer to read it cover to cover, the content is organized in three parts to help you learn about offshore outsourcing at the level of depth you choose. Following is a quick guide to the content.
- Part One of the book provides a thorough overview of the offshore outsourcing landscape. We begin by defining key concepts and trends (Chapter 1), business models (Chapter 2), and the process landscape (Chapter 3). We also explain how three best-practice firms - General Electric, Dell, and American Express - are capitalizing on the offshore outsourcing trend.
- Part Two of the book provides a detailed overview of the different business processes - information technology (Chapter 4), customer care (Chapter 5), finance and accounting (Chapter 6), human resources (Chapter 7), and transaction processing (Chapter 8) - that companies are sending offshore. Throughout these chapters, we have included many case studies because they allow you to see the key business processes being transformed, the implementation challenges that companies and third-party providers struggle with, and the ROI that results from resolving them.
- Part Three of the book focuses on the "how-to." We discuss how you can create, implement, and benefit from an offshore outsourcing strategy. We present the steps that are normally included when companies create clear, focused offshore strategies (Chapter 9), decide on vendors (Chapter 10), and select countries (Chapter 11).
At the end of this book, we hope that readers will return to their organizations with new ideas and an understanding that offshore outsourcing is a journey, not a one-time event with a quick payoff. Agree or disagree - offshore outsourcing is changing the business landscape.
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