Increasing commoditization of IT services are creating unforeseen challenges around cost management and service differentiation. CIO organizations are dealing with the following challenges:
- Offshore is no more a unique offering but an integral part of IT sourcing for most of multinationals. Comparison with onsite service cost is history. Offshore cost is an implicit assumption in building IT budgets. This is forcing CIO organizations to explore even more cost competitive options leading to unheard pressure on Captive Centers.
- IT companies are increasingly offering new contract structures which are only sustainable with large upfront investments or with critical size of operations, a luxury Captive operations do not have or cannot afford
- Due to overheated Offshoring business, Captive centers are facing unforeseen competition from IT companies to attract right kind of talent and hence are forced to pay higher compensation, leading to further cost pressure.
Over the next few years, IT Captive leadership will have to remain focused on reducing operational costs while offering higher business value to its parent organization. They must do all this while keeping an eye on a changing expectations and rising tide of low cost options.
Orcapod can provide strategic and operational support to its client in following areas to meet unrelenting cost reduction goals.
Demand Driven Talent Acquisition: To build strategies that goes beyond on-demand hiring. Develop cost efficient channels, tools and process for aligning talent supply chain to business demand.
Value Driven Talent On-boarding: To develop data driven approach to shorten supply chains for fast response and lower talent inventory loss. Develop tools, rearrange HR policies and build methodologies for planned on-boarding, productive utilization of benched resources and faster staffing.
Optimizing Investment in Talent Retention: Structured and data driven analysis of various layers of organization hierarchy to distinguish between value adding and value eroding layers. This is to ensure that organizational investments are going to the right places.
Vendor Development for Cost Reduction: Develop vendors and alliances for faster turnaround and reduced cost of operations. Build approach for profitable outsourcing of non-core activities.
Activity Based Service Costing: Data driven analysis of service cost for ensuring accurate cost allocation, right pricing and improved competitiveness.
Demand Shock Absorbers: Planned approach for converting your capital expenses to operational expense. This leads to to flexibility in cost structures and better preparation to deal with demand variability.
Building Tools, Methodology & Processes for Delivery Excellence: To develop intellectual property around proprietary tools, methodologies and processes helping in the much needed differentiation and improved certainty.
Cost Optimization & Asset Sweating: Benchmarking and finding opportunities of cost optimization across cost heads and strategies to improve asset sweating. Implementing process improvement initiatives like lean management.