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Business Transformation Outsourcing

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Business Transformation Outsourcing
Beyond the hype about transformation — there’s some real work being delivered that makes the case for business transformation outsourcing

TELECOM EQUIPMENT PROVIDER improved inventory accuracy by 25 percent with approximately $7.9 million worth of inventory rejects cleared. An Australian Bank improved its resolution time by 90 percent from 28 days to only two, freeing capacity by 50 percent and improving customer satisfaction. A leading auto manufacturer streamlined organization structure across affiliates, delivering $600,000 annual savings. A leading oil and refinery company improved transport lead times and supply chain performance freeing up $1.5 million working capital. All of these examples merit the tag of transformational outsourcing. Even though the word ‘transformation’ is being used to weave different things in different contexts and different scales, it is overused by outsourcing services providers of every ilk. “The word ‘transformation’ sounds like too much of a big bang approach. So our philosophy is that often such big bang approach starts with risks and failures. And, there are many of them in the history of corporation,” said Tiger Tyagarajan, Executive President, Business Development and the Americas, Genpact, a global Business Process Outsourcing (BPO) and IT-solutions provider. But “you are prepared for any transformation, if you have embarked on a globalization journey.” To achieve the maximum transformation, companies

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often offshore IT and BPO functions together. With Business Transformation Outsourcing (BTO) becoming as popular as ‘business-process re-engineering’ used to be, corporations are now inking such deals frequently. The most recent one being the transformation deal between BristonMyers Squibb (BMS) and IBM. Under the terms of $345 million BMS-IBM BTO agreement, BMS expects strategic transformation of its global HR functions. Is global outsourcing the way to transformation? How does transformation happen?
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