May 17, 2020

World's Top Outsourcing Destinations

Offshore outsourcing has become a necessity in modern-day bu
Freddie Pierce
3 min
Offshore outsourcing has become a necessity in modern-day business, find out which countries are the ideal outsourcing destinations
Offshore outsourcing has become an increasingly popular trend throughout the past few years. With recent hit-shows like Outsourced, it seems like outso...

Offshore outsourcing has become an increasingly popular trend throughout the past few years. With recent hit-shows like Outsourced, it seems like outsourcing is a way-of-life for modern businesses.

There are many different reasons why a company may choose to outsource, depending on what the company does and what its needs are, but according to the second annual Capgemini Executive Outsourcing Survey, the top five things executives look for when they choose an outsourcing country are: labor costs (79 percent), technology and infrastructure capabilities (62 percent), skilled labor (61 percent), language proficiency (49 percent) and economic stability (44 percent).

While outsourcing can provide hundreds to thousands of jobs for offshore nations, it also causes the company to downsize its in-house team. Recent Forrester research reveals that in the computing industry alone, approximately 472,632 US jobs will move offshore by 2015, according to Outsourcing Facts. That is a whopping number, which undoubtedly will raise some eyebrows.

Many people are concerned about losing their jobs due to outsourcing. Although outsourcing provides companies with cheap labor, it comes at the sacrifice of cutting jobs within the company and putting its own employees out of work.

But whatever the case may be, it’s safe to say that outsourcing is not just a passing fad. Outsourcing is a method of doing business that has grown exponentially throughout the years, and seems like its here to stay. So, with that being said, lets take a look at the top five desirable outsourcing destinations.

India was the pioneer of outsourcing and remains the leading outsourcing destination. But outsourcing to India wasn’t always easy. "Most CIOs don’t have any clue what it used to be like,” says John Doucett, CIO of Hartford, talking about when he first began outsourcing work to India more than a decade ago for General Electric, according to CIO. “You had people who couldn’t speak English. The telecommunications were terrible. It was awful trying to transfer files back and forth."

But outsourcing in India has come a long way and now provides many benefits to businesses such as: cheap labor, high quality services, time zone advantages and a stable government. The services in India have vastly improved and India remains the most popular outsourcing destination in the world.

China is rapidly emerging as a prime outsourcing destination, particularly for IT outsourcing. “China will soon be competing with India as an outsourcing destination,” according to Shine Technologies. As I’m sure we’ve all noticed, China’s economy is booming, and with that comes great economic capacity and a large, skilled technology resource pool. Also, English is a second language for nearly all Chinese people, making them easier for the US and other English-speaking countries to do business with.

Australia is not normally a country that comes to mind when thinking about outsourcing, but according to Gartner, Australia ranks high on the list. Australia is an attractive outsourcing destination because of its cultural compatibility, data and intellectual property, infrastructure, political and economic environment and globalization and legal maturity. But due to its more mature and developed market, it’s not the most cost-effective option.

New Zealand, a sister country to Australia, is also a prime location for outsourcing. It is desirable because of its cultural compatibility, infrastructure and language. But just like Australia, its mature and developed market offers limited cost savings.

Singapore is one of the world’s best places to do business, so it only makes sense that it’s also a desirable outsourcing location. Its high security, privacy of data, legal maturity, globalization and intellectual property are Singapore’s key assets that have caused many businesses to outsource there. However, it is not as competitive as China or India when it comes to the cost of labor.

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Jun 11, 2021

NTT DATA Services, Remodelling Supply Chains for Resilience

NTTDATA
supplychain
Supplychainriskmanagement
Procurement
6 min
Joey Dean, Managing Director of healthcare consulting at NTT DATA Services, shares remodelling strategies for more resilient supply chains

Joey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA and is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients.

The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there.

A Multi-Vendor Sourcing Approach

“Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency.

“The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean.

But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?

“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains.

Wielding Big Tech for Better Outcomes

So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry

“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality. 

“Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.”

Evolving Procurement Models 

From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view. 

“The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models.

“Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.”

“Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having predictive views into inventory levels can help enable better decision making from both sides.”

But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs?

“In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-in-time basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal.

The Challenges

These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say.

On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.

Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.”

He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.”

As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.”

 

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