Financial Outsourcing to Asia

Table of Contents for Financial Outsourcing to Asia

1. Introduction e.1 Aim of report f. What is outsourcing? f.1 Introduction f.2 Is there any difference between contracting in or out? f.3 Types of outsourcing f.3.1 Conventional outsourcing f.3.2 Collaborative outsourcing f.3.3 Transformational outsourcing f.4 What is Business Process Outsourcing (BPO)? f.5 The objectives of outsourcing f.5.1 Accenture Strategic Institute and Economic Intelligence Unit research Diagram 1: Objectives of outsourcing Diagram 2: What core and non more unctions are being outsourced? f.6 What is being outsourced? f.6.1 Accenture and EIU survey Table 1: What has been outsourced successfully? Chart 2: What has been outsourced successfully? Chart 3: What has been outsourced successfully? f.6.1.1 Breakdown of data f.6.1.2 Other outsourced business processes f.6.2 Conspectus research f.7 Outsourcing online f.7.1 Outsourcing and technology f.7.2 Business to business - Actuality of outsourcing financial services online f.7.3 Business to consumer - Actuality of outsourcing financial services online f.7.4 The IT-Outsourcing circle f.8 Mega deals f.9 Outsourcing offshore f.9.1 Driving forces behind offshore outsourcing Diagram 3: Driving forces behind outsourcing f.9.1.1 Accenture Strategic Institute and EIU Table 2: Accenture - driving forces behind outsourcing Chart 4: Accenture - driving forces behind outsourcing f.9.1.2 Conspectus survey Chart 5: Conspectus - driving forces behind outsourcing f.10 Chapter conclusion g. Benefits of offshore outsourcing g.1 Introduction g.2 Accenture and Economic Intelligence Unit survey Table 3: Accenture - benefits of outsourcing Chart 6: Accenture - benefits of outsourcing g.3 Conspectus survey Chart 7: Conspectus - benefits of outsourcing g.4 Reduced costs g.4.1 Accenture and EIU survey results g.4.2 Conspectus survey results Table 4: Conspectus - benefits of outsourcing g.4.3 Deloitte Research Chart 8: Deloitte - Percentage cost-savings from outsourcing g.4.3.1 Total global migration of financial services to Asia Table 5: Deloitte and visiongain - Total migration of financial services to Asia from 2003 to 2009 (in $ billions) Chart 9: Deloitte and visiongain - Total migration of financial services to Asia from 2003 to 2009 (in $ billions) g.4.3.2 Total global financial services cost savings due to Asia outsourcing Table 6: Deloitte and visiongain - Total cost savings for the top 100 financial services firms due to Asia outsourcing, from 2003 to 2009, (in $ billions) Chart 10: Deloitte and visiongain - Total cost savings for the top 100 financial services firms due to Asia outsourcing, from 2003 to 2009, (in $ billions) Diagram 4: Outsourcing to Asia - the movement of cash flow within the global financial services market g.4.4 Individual institutional cost savings g.4.4.1 Citigroup Inc cost savings g.4.4.2 HSBC cost savings g.4.4.3 Aviva cost savings g.4.4.5 Software developers cost savings g.4.5 Cost savings conclusion g.5 Job creation g.5.1 Percentage of IT work sent offshore by top 100 global financial institutions g.5.1.1 Deloitte Research findings g.5.1.1.1 Percentage of IT work sent offshore by top 100 global financial institutions in 2003 Chart 11: Percentage of IT work sent offshore by top 100 financial institutions in 2003 g.5.1.1.2 Percentage of IT work sent offshore by top 100 global financial institutions in 2005 Chart 12: Percentage of IT work sent offshore by top 100 global financial institutions by 2005 g.5.2 Number of jobs to be transferred offshore by the global financial sector g.5.2.1 Deloitte Research findings Chart 13: Percentage jobs to be transferred offshore by the global financial sector by 2008 Chart 14: Regional breakdown of jobs transferred offshore by the global financial services sector by 2008 g.5.2.2 McKinsey Global Institute, Amicus and visiongain combined findings Table 7: Number of jobs outsourced according to region from 2003 to 2015 Chart 15: Number of jobs outsourced according to region from 2003 to 2015 g.5.3 Individual institutional job-generation Table 8: Number of jobs outsourced to Asia, according to institution Chart 16: Number of jobs outsourced to Asia, according to institution g.5.4 Job creation conclusion g.6 Enabling sharper focus on core competencies g.7 Excellent infrastructure, technical proficiency and English-speaking labour force g.7.1 Oracle g.8 Improve customer service g.8.1 Responses to online inquiries Chart 17: The speed of corporate response to online inquiries Chart 18: Email response times 1998 - 2002 Chart 19: Service improvements requested by customers Chart 20: Email automation - outsource of maximum savings g.8.2 24-hour seamless activity g.8.2.1 Oracle g.9 Improved company disclosure Chart 21: Does outsourcing improve the quality of company disclosure? g.10 Mutually beneficial to both economies Chart 22: Offshore value to India g.11 Job losses in perspective g.11.1 Majority of work cannot be outsourced g.11.2 Job losses essential part of economic restructuring g.11.3 Current trends suggest increased onshore job creation to plug job losses g.11.4 Outsourcing creates value for the economy and frees resources g.11.4.1 Cost savings g.11.4.2 New revenues g.11.4.3 Repatriated earnings g.11.4.4 Redeployed labour Chart 23: Offshore value to US g.11.5 Job losses in perspective - conclusion g.12 Impetus for change g.13 Chapter conclusion h. Drawbacks of outsourcing to Asia h.1 Introduction h.2 Job losses h.2.1 Introduction h.2.2 Offshore outsourcing - Unemployment in the US h.2.2.1 McKinsey Global Institute, Deloitte Research and visiongain forecasts- 2003 to 2015 Table 9: Number of jobs outsourced from US to Asia from 2003 to 2015 Chart 24: Number of jobs outsourced from US to Asia from 2003 to 2015 Chart 25: Percentage of jobs outsourced to Asia in 2008 originating in the US h.2.2.2 Aberdeen Group, Gartner and IDC forecasts - 2003 to 2015 Table 10: Number of jobs outsourced from the US to Asia from 2003 to 2008 Chart 26: Number of jobs outsourced from the US to Asia from 2003 to 2008 h.2.2.3 GE Capital h.2.2.4 Redeployment of labour - has it worked? h.2.3 Offshore outsourcing - Unemployment in the Europe h.2.3.1 Deloitte Research findings h.2.3.2 Troika findings Table 11: Number of financial services jobs outsourced from UK to Asia, from 2003 to 2010 Chart 28: Number of financial services jobs outsourced from UK to Asia, from 2003 to 2010 h.2.3.3 Visiongain findings Table 12: Number of financial services jobs outsourced from UK to Asia, from 2003 to 2010 Chart 29: Number of financial services jobs outsourced from UK to Asia, from 2003 to 2010 h.2.3.4 Amicus findings h.2.3.5 Individual institutions h.3.5.1 Aviva (Norwich Union) h.2.3.5.2 HSBC h.2.3.5.3 Goldman Sachs h.2.3.5.4 Citigroup h.2.3.5.5 Consolidated job losses Table 8: Number of jobs outsourced to Asia from UK, according to most prominent financial institutions Chart 16: Number of jobs outsourced to Asia from UK, according to most prominent financial institutions h.2.3.6 Political action against offshore outsourcing to Asia in Europe h.2.3.6.1 Amicus h.2.3.6.2 Department of Trade and Industry (DTI) h.2.4 Consolidated migration of financial services to India Diagram 5: Distribution of outsourced financial services in Asia h.3 General drawbacks of outsourcing in- survey findings h.3.1 Conspectus findings Chart 30: Leading concerns relating to outsourcing - Conspectus h.3.1.1 Findings analysed h.3.2 Accenture and EIU findings Table 13: Primary drawbacks of outsourcing according to Accenture and EIU Chart 31: Primary drawbacks of outsourcing according to Accenture and EIU h.4 Risk of valuable data falling into competitor's hands h.5 Risk that cost of outsourcing exceeds expectations h.5.1 TCO reductions due to offshore outsourcing Chart 32: Total cost of ownership (TCO) reductions due to offshore outsourcing h.5.1.1 TCO reductions analysed h.5.2 Lower unit rates for skilled resources do not equal giant TOC reductions Chart 33: Unit rate approach to offshore outsourcing h.5.3 Hidden costs of offshore outsourcing Table 14: Hidden costs of offshore outsourcing h.6 Undermining importance of in-house knowledge and expertise h.6.1 Limited pool of offshore labour h.6.2 Language barriers and infrastructure h.7 Cultural differences h.7.1 Oracle h.8 Chapter conclusion i. How successful are the outsourcing initiatives in Asia? i.1 Introduction i.2 Accenture and EIU findings i.2.1 How successful has the outsourcing experience been? Table 15: How successful has your outsourcing experience been? Chart 33: How successful has your outsourcing experience been? i.2.2 Which functions have been successfully Table 16: Which functions have been successfully outsourced? Chart 34: Which functions have been successfully outsourced? i.2.3 Primary barriers obstructing decision to outsource Table 17: Primary barriers obstructing decision to outsource Chart 35: Primary barriers obstructing decision to outsource i.2.4 Success of outsourcing to Asia Table 18: How successful is Asia outsourcing? Chart 36: How successful is Asia outsourcing? i.2.5 Financial functions outsourced successfully Table 19: Financial functions outsourced successfully Chart 37: Financial functions outsourced successfully i.2.6 Which financial functions are intended not to be outsourced? Table 20: Which financial functions are intended not to be outsourced? Chart 38: Which financial functions are intended not to be outsourced? i.2.7 Why certain finance functions have not been outsourced Table 21: Why certain finance functions have not been outsourced Chart 39: Why certain finance functions have not been outsourced i.2.8 What financial outcome would induce a company to outsource? Table 22: Financial outcome that would induce a company to outsource Chart 40: Financial outcome that would induce a company to outsource i.2.9 Findings analysed i.3 Conspectus findings i.3.1 Introduction i.3.2 Would companies be prepared to sign up for another outsourcing contract? Chart 41: Would you be willing to sign up for another outsourcing contract? i.3.3 Would companies be prepared to outsource offshore? i.3.4 Outsourcing expenditure Chart 42: Amount of expenditure invested in outsourcing i.3.5 Findings analysed i.4 Why is outsourcing sometimes unsuccessful? i.4.1 Determine scope of services and the metrics Chart 43: Percentage who have outsourcing metrics in place i.5 Accenture and the golden rules of outsourcing i.5.1 Introduction Table 23: Factors critical to successful outsourcing Chart 44: Factors critical to successful outsourcing i.5.2 Allow lots of time i.5.3 Win over the bosses i.5.4 Build a consensus i.5.5 Do your homework i.5.6 Craft the contract carefully i.5.7 Incorporate incentives i.5.8 Tend to morale i.5.9 Communicate the upside i.5.10 Stick to specifics i.5.11 Measure performance i.5.12 Ensure proper oversight i.5.13 Build a partnership i.6 Conspectus and the steps to outsourcing success i.6.1 Introduction i.6.2 Ten key rules Table 24: Ten golden rules of outsourcing success i.6.2.1 Step 1- Identify root causes of operational inefficiencies i.6.2.1.1 Holistic approach i.6.2.2 Step 2 - Free up the best people to direct and manage the outsourcing programme i.6.2.3 Establish a senior responsible owner (SRO) and programme director for the entire lifecycle i.6.2.4 Learn from others' experiences, and use proven methods and best-practice techniques i.6.2.5 Treat outsourcing as a programme of multiple inter-related projects/workstreams i.6.2.6 Progressively update and review the business case, to ensure the viability of outsourcing i.6.2.7 Conspectus - conclusion i.7 Chapter conclusion j. Case studies - who is outsourcing to Asia? j.1 Introduction j.2 J.P Morgan Chase and Morgan Stanley j.3 Deutsche Bank j.4 Citigroup Inc j.4.1 Asia outsourcing and time zone costs j.4.2 Resolving the time zone difficulties j.5 HSBC j.6 Barclays j.7 Chapter conclusion k. Where to outsource in Asia k.1 Introduction Diagram 6: Location attractiveness k.2 Key factors in choosing an Asian outsourcing destination k.2.1 Costs Table 5: Wage rates in Asia k.2.2 Size of skilled labour pool k.2.3 Quality of infrastructure k.2.4 Cultural affinity k.2.5 Political and legal risk k.2.6 Governmental support k.2.7 Factors consolidated k.3 Outsourcing to India k.3.1 Introduction k.3.2 Benefits for India k.3.2.1 Low cost and expertise in India k.3.2.2 Job creation in India k.3.2.3 Infrastructure k.3.2.4 Education k.3.2.5 The service providers k.3.2.6 The emphasis on quality k.3.2.7 Government support k.3.2.8 Heightened customer service k.3.3 Drawbacks of outsourcing to India k.3.3.1 Geopolitical risk k.3.3.2 Political risk k.3.3.3 Business risk k.3.3.4 Language risk k.3.4 India in perspective k.4 Outsourcing to China k.4.1 Factors conducive to prospective outsourcing k.4.1.1 Liberalisation of laws and government policies k.4.1.2 Emerging middle class k.4.1.3 Investment in technical education k.4.1.4 Large supply of low cost labour k.4.1.5 Enviable economic growth k.4.1.6 Offshoring infrastructure already in place k.4.1.7 Physical proximity to major markets k.4.1.8 Cultural similarities k.4.2 Critique of China as an offshoring hub k.4.2.1 Family traditions k.4.2.2 Language k.4.3 China in perspective k.5 Chapter conclusion l. Conclusion

CMS, P&A House, Alma Road, Chesham, Bucks. HP5 3HB, UK
Tel: +44 (0)1494 771734
Fax: +44 (0)1494 778994
e-mail: keithw@cmsinfo.com

For more information about us, visit CMSinfo.