In the IT services space, reducing growth rates and increasing pricing pressures are making it difficult for investors to realize the targeted IRR. Increased competition and faster commoditization of offshore services are creating unforeseen challenges around cost management and service differentiation. Leadership in IT organization is dealing with these 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 vendor margins.
- Clients are mature IT outsourcers and are increasingly experimenting with new contract structures, geographies and new breed of specialized companies.
- Industry wide benchmarking, maturity models, certifications are not differentiators but are hygiene factors. Over and above, high workforce mobility is diffusing differentiation leading to further cost pressures.
Over the next few years, executive in IT organization will have to remain focused on improving bottom-line, reducing operational costs while investing in innovations that hold out the promise of top-line growth. They must do all this while keeping an eye on changing client expectations and rising tide of low-cost options.
Orcapod can provide strategic and operational support to its client in following areas to meet the unrelenting cost reduction goals.
Demand Driven Talent Acquisition: To build strategies that goes beyond on-demand hiring. Develop cost efficient channels, tools and processes 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 organizational 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 an 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.
Revenue & Margin Shock Absorbers: Planned approach of converting your capital expenses to operational expense, leading to flexibility in cost structures and better preparation to deal with revenue variability.
Building Tools, Methodology & Processes for Delivery Excellence: To develop intellectual property around proprietary tools, methodologies and processes helping in creating 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.