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Beyond Cost Arbitrage: Emerging Paradigms for Sustaining Competitive
Advantage in Outsourcing July 13 th 2006
T.K. Kurien CEO, Wipro BPO
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Business Realities
Every moment of truth needs to deliver Business Value
Need for Greater agility
Disruption in Business Models
Pricing Pressure
Commoditization
Margin Squeeze
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Service Providers Dilemma
How do you objectively assess the business value of a solution?
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Bridging the business value gap will fuel future IT strategy
Service providers need to ask themselves….
How do we align our thinking with that of the business stakeholders?
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Moving beyond Cost Arbitrage – The New Value Drivers
Cost Arbitrage ……………………………….….Business Value Add Cost Arbitrage ……………………………….….Business Value Add
§IT infrastructure utility services §EDS's Agile Enterprise
§IBM's On Demand Business
§Remote managed services §Hosting
§Network services
§Low end, resource intensive
outsourcing §Eg Mainframe, server storage
§Software as a Service Customization of only those apps that genuinely deliver competitive
advantage
§Struggle between custom & Standard business applications continues §Usage of global sourcing for labor intensive applications
§Legacy apps §Belief That customization of business apps yields competitive advantage
FUTURE FUTURE NOW THEN
§Application Outsourcing
§Infrastructure Outsourcing
§Business Process Utilities §Transaction processing §Shared Services
§Contact Centers §Business Process Outsourcing
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Business Buyer
CIO or IT buyer
Value Chain Movements– Outsourcing Perspective
ASP – Software as a Service ~ Application Utilities
Y2K Application Migration ~ EAI
ERP – commercial off the shelf Legacy Applications Management
Application Outsourcing($35 Billion)
Colocation ~ Hosting Network ~ LAN ~ WAN or Telecommunications
Desktop ~ Help Desk Mainframe ~ Midrange ~
Servers Storage
Infrastructure Outsourcing( $146 Billion)
Infrastructure utilities
Contact Centers Demand Management (CRM~ Sales)
Supply Management (Logistics ~Supply chain)
Transaction processing Enterprise Services (F&A – HRMS)
Business Process Outsourcing ($112 Billion)
Business Process Utilities
Utility computing is slowly changing the outlook of the IT service market.
Time
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How are Indian service providers adapting to meet new market demands?
Cost Competitiveness
•Platform •ADM factory
Specialist
•Insightled Custom solution •Vertical specialist
•Horizontal specialist
§ COST DRIVER § VALUE & DEEP CLIENT RELATIONSHIPS
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It is a matter of Choices
Indian Providers need to decide
WHERE & HOW
they want to compete
Developing Service Lines in Niche Industries
Clinical Processing Services Enhancing efficiencies by leveraging intellectual capabilities towards delivering quality
clinical processing services to Global Customers.
Ø 3D Reconstruction & Processing Services Providing 3D anatomical models for MR / CT Angiographies
Ø Collaborative Radiology Reporting Web based reporting to enhance productivity gains
Ø Oncology & Orthopedic Services Providing IMRT , 2D/ 3D Conformal Treatment Planning
3D Implant assessments, digital prosthetic templates.
Ø Clinical Trials & Medical Management Imaging trials, Pharma Covigilance Drug discovery, Outsourced research, Nurse call centers for medical care.
Medical Management
• Increasing population affected by various disease states.
• Huge spends in disease management and preventive medicine
• Aging population ; Biopharmaceuticals research & pharma covigilance
Technology drivers :
• Development in computing and information
• Growth in Technology, network and
telecommunications infrastructure,
• Use of technology by older people
Benefits of telecare : • Better access & provision of healthcare
• Reduced waiting lists, enhanced patient
outcomes and access to information
• Revenue generation and cost effectiveness.
Nontechnological drivers :
• Extended access to healthcare services,
• Aging society, driving cost reduction, etc.
Benefits of Medical Management
Managed Model
SMS enabled Pacemaker; Pill Dispenser; Telemedical Monitor
Managed Model
SMS enabled Pacemaker; Pill Dispenser; Telemedical Monitor
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