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PROVIDERS OF STRATEGIC STAFFING Managed Service Provider Dr Jason Carter

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Page 1: Interim resources and managed service provider   flexible resources

PROVID

ERS OF STRATEG

IC STAFFING

PROVID

ERS OF STRATEG

IC STAFFING

Managed Service ProviderManaged Service Provider

Dr Jason Carter

Page 2: Interim resources and managed service provider   flexible resources

Industry service industry Overview Industry service industry transformation Business model Competitive advantage Outlook Major Players Rivalry among existing players Company Overview SWOT Analysis Factor evaluation Matrix Competitive Strategies in Economic Downturn

Page 3: Interim resources and managed service provider   flexible resources

524

803.9

0

200

400

600

800

1000

2003 2009

Size & Growth ($B)

IT Service Industry : OverviewIT Service Industry : Overview• On-shore incumbents are

still larger: IBM, Accenture

• Off-shore players growing : TCS, Wipro, Infosys

Technology

• 47% Annual growth (2003 vs. 2004)

• Still 0.8% market share

Fragmented market

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Steadily growing industry $150 million in 1991-92 to $5.7 billion in 1999-2000

( $4 billion worth of software exports ) Annual growth rate of Software Exports - over 50

percent Software exports to around 95 countries around the

world More than one –third of the global Fortune 500

companies outsource requirements to India Upcoming market openings for IT industry

◦ IT Services◦ Software products◦ IT- enables services◦ E-business

Source: Gartner

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IT Service Industry : IT Service Industry : TransformationTransformation

Change in Customer Needs

Change in Offerings

• Invest in new technologies on faith and without strong links to ROI

measurements (Over-purchase!)

• Traditional enterprise application packages

• Homogeneous infrastructure

• More demanding in ROI

• Get more out of tech investment

• Rapid adaption /modification

• Specific point solutions

• Off-shore IT services

• SOA (Service-oriented Architecture) & Web services

• Applications as services

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Business Business ModelModelDefinition

“The process of breaking projects down into their

logical components and then distributing

those components to locations (onsite, near

shore, or offshore) where

they can be delivered at

maximum value.”

Modular Global Sourcing

Framework

Innovation

to Meet New

Customer

Needs

Lower Cost

Faster Implementation

Lower Risk

Measurable

Customer Value

Proposed development and

Internet marketing center

And Virtual; resource bench

Vehicles

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Business ModelBusiness Model“1-1-3” Model

Definition

“Integrate the business

consulting and technology

implementation lifecycle. ‘1-1-3’ model gives one

client one resource onsite, one FR resource onsite, and 3 FR Tech resources

offshore.”

Vehicles

• On-shore management

consulting talent

•On-shore liaisons

•Off-shore resources

“1-1-3”combined with GDM

Customer Value

• Lower blended rates

• Faster Implementation

• Integratio

n

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What are the Competitive What are the Competitive Advantages?Advantages?

“1-1-3” Model

•Blend on/off shore

•Cost efficient

Strong operational

skills

Access to Infosys Technologies

clientsLarge supply of low-cost

IT/process resources

Cost & speed

advantage coming

from “1-1-3” and GDM

model

Unique,

blended model Easier to integrate offshore

with onshore

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If company guidance's are anything to go by, then the outlook for the industry seems bleak http://www.businessweek.com/globalbiz/content/jan2009/gb20090121_832742.htm

Collapse of the US car industry to impact TCS, Wipro and Infosys

• During recessions, tech spending has historically fallen by more than the GDP

• A McKinsey study indicates that IT spending has typically fallen by 5-7 times the GDP in the past recessions

• The BFSI sector that pioneered the move offshore idea has been butchered and is expected to worsen

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IT Consulting Market Context & IT Consulting Market Context & StructureStructure

• Subset of overall IT services market • Projected single-digit growth of 5% Largely fragmented market with 2 key segments:

• On-shore consulting and IT services players (Accenture, IBM, Cape Gemini, EDS)

• Off-shore IT services players (Wipro and TCS)

• Largest shares held by Accenture and IBM

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Infosys Technologies Wipro Technologies Tata Consultancy Services IBM Global Services HCL Info systems Cognizant technology solutions

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Multiple players:◦ TCS◦ Accenture◦ Wipro◦ Infosys◦ Cognizant◦ HCL Tech◦ Patni …. …. …. …. The list

is large Competition is global in

nature and stretches across boundaries and geographies

Replication of the off shoring model by MNC IT majors

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RIVALRY AMONGST EXISTING RIVALRY AMONGST EXISTING PLAYERS ( CONTD )PLAYERS ( CONTD ) Until the recent crisis,

the market as a whole was expanding

A growing market meant that there was enough and more for all the players in the market

• The problem of stagnating markets• Implies that all the players need to gun it out

amongst themselves to grow revenues• Rivalry expected amongst existing players to

intensify

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Specializes in delivering technology enabled business

Business and technology consulting Systems Integration Application services IT outsourcing Business Process outsourcing IT infrastructure services Web Development and internet marketing Interim Resources and subject matter

experts

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Technologies – SWOT Technologies – SWOT AnalysisAnalysisStrengths Weaknesses

Opportunities Threats

Significance of Impact

H High

M Medium

LL Low

• Operational excellence to deliver

GDM

• Capability to attract & keep talents

• Strong relationship

• More cost/speed conscious customers

• Market growth

• Higher awareness on Out Sourced model

• Over-reliance on UK economy

• Limited position in value chain (i.e. No

presence or relationship with

consulting business)

• Wage inflation due to competition on talents

(15+% / year)

• Newer disruptive business models (i.e.

web services, web 2.0)

H

H

H

M

M

M

H

M

LL

LL

M

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SWOT ANALYSISSWOT ANALYSIS• Strengths:

– Enhanced competitive edge – Indian based operations

– Low labor costs, high relative rates of inflation

– Relatively high skill levels in IT– Extremely strong position – Brand – respected across the world– Varied Domains of Businesses – foray into

products and services

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SWOT ANALYSIS SWOT ANALYSIS ( CONTD )( CONTD ) Weaknesses◦ Occasionally falters to secure contracts in North

America – missing out on lucrative business◦ Small player as far as global players are

concerned◦ Multi – cultural environment◦ Business consulting practices dominated by

major players like Accenture and IBM◦ Word of mouth marketing of offering◦ Lack of expansion◦ Outsourced offshore resource

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SWOT ANALYSIS SWOT ANALYSIS ( CONTD )( CONTD ) Opportunities◦Lucrative expansion options in China◦European and North – American

companies to outsource a portion of BPO /ITO operations

◦Provides outsourcing and Cost reduction strategies – help clients during global recession

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SWOT ANALYSIS SWOT ANALYSIS ( CONTD )( CONTD ) Threats◦Move to offshore service companies in

countries like China or Korea◦Has to compete for skilled labor – may

affect wage levels and retaining staff◦Competitors coming from China, Korea

– low cost labor and adaptive to western practices

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INTERNAL FACTOR EVALUATION MATRIX

IFE Matrix indicates that India IT Inc. is strong and it has done well, so far, to overcome its weakness

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EXTERNAL FACTOR EVALUATION MATRIX

• EFE Matrix indicates that India IT Inc. is not responsive in exploiting opportunities and in

mitigating the impact of threats

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OUR CLIENTSOUR CLIENTS

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Registered Office: Enterprise House,

21 Buckle Street, London, E1 8NN,United Kingdom.

Company No. 05634821, Registered in England & Wales.

DUNNS ID: 348355780.

UK DDI: + 44 (0) 203 – 6035 - 358.

UK FAX: + 44 (0) 203 - 6035 - 359.

Mobile: 0709 230 1140

Email: [email protected] © Copyright Flexible Resources Associates 1999 - 2012 - All Rights Reserved

PROVID

ERS OF STRATEG

IC STAFFING

PROVID

ERS OF STRATEG

IC STAFFINGwww.flexibleresources.co.uk

Managed Service ProviderManaged Service Provider

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© Flexible Resources Associates . All rights reserved. Confidential and proprietary document.

This document and all information contained herein is the sole property of Flexible Resources Associates.. No intellectual property rights are granted by the delivery of this document or the disclosure of its content. This document shall not be reproduced or disclosed to a third party without the express written consent of Flexible Resources Associates . This document and its content shall not be used for any purpose other than that for which it is supplied.

The statements made herein do not constitute an offer. They are based on the mentioned assumptions and are expressed in good faith. Where the supporting grounds for these statements are not shown, Flexible Resources Associates . will be pleased to explain the basis thereof.

PROVID

ERS OF STRATEG

IC STAFFING

PROVID

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IC STAFFING

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