Outsourcing Business Models
Change is imperative and with business functions becoming more automated, it is essential that IT/ITES BPO adopt and tweak their business models for sustenance and greater market penetration. Technologies like cloud computing and virtualization are enormously changing the way the world does business and in the given scenario and in the given scenario, survival in the offshore outsourcing business is all about having the competence to help enterprises leverage technology for critical business functions. This spells challenge for the service providers to constantly innovate to keep up with market demands and bring about smart tweaks in the existing framework of things.
As one moves up the value chain, innovation fuelled by evolved business analytics is the key to value addition. In this regard, it can be said that post the evolution of the offshore outsourcing business models, there has been a subsequent change in the nature of services that have come up. The expansive gamut of services also called for evolved business models.
The offshore outsourcing model is based on the theory of ‘Hire rather than own expertise’ and based on this basic tenet, five offshore outsourcing model has come up that both the enterprise and the service provider needs to be complete aware of.
Re-modeling the Offshore Outsourcing Business
The first model is the Global Delivery outsourcing model which helps the service provider to manage and optimize resource across the globe, thereby enabling a seamless outsourcing experience for the enterprises. This model is flexible in terms of adapting to the client’s changing requirements. The second is the Hybrid Delivery model. This is a dual shore model supporting both the onsite and offshore outsourcing business thereby enabling service providers of midsize deliver cost effective solutions compared to the previous ones. The Global Delivery model is majorly adopted by multinational service providers. The Hybrid Service model has been the most successful so far.
The next is the Global Shared Services model mostly implemented for Captive centers that have an established management hierarchy. The fourth is the Build-Operate-Transfer model, which is adopted by enterprises who seek to have their own foreign subsidiaries supported by an offshore partner. The fifth model is the Hub-and-Spoke model. This is a multi-sourcing model that involves multiple service providers for an integrated function. This model allows enterprises to select the best of the bred service providers for different domains of an integrated product or service function.
There are very few important factors that need to be considered while selecting each of the outsourcing models. Apart from the cost factor, an enterprise has to also carefully scrutinize the capabilities of the vendor willing to work on a particular model. More so, it is also about quality of the services to be accepted.