Best Sourcing & BPO in Singapore Presented at SIC Roundtable Presented by: Mr P Ramakrishna, Director, Industry Development 17 Oct 2006 1
Agenda What is Best Sourcing? Why Best Sourcing? Implementing Best Sourcing Best Sourcing Progress 2
Best Sourcing Outsourcing Best Sourcing Finding the Best Source of Provider Engage Private Sector Provider if it is more effective and efficient. Outsourcing If private provider is more efficient In-sourcing If in-house team is more efficient Functions may also be in-sourced to other public agencies Best Sourcing ensures that the most efficient means of service delivery is used. 3
Market Tested Projects (Feb 03 Oct 05) 128 Projects(59%) Outsourced Value of contracts: $179 million Annual operational cost savings: $25 million 90 Projects (41%) In-sourced Tends to involve small scope 72 (80%) involve less than 10 headcount 4
Objectives of Best Sourcing Best Sourcing aims to improve: Value for money greater cost efficiency or improved service outcomes Focus on developing competencies in functions that cannot be performed by external providers Best Sourcing as Strategic Tool Improve business focus Access to world class capability Accelerate re-engineering engineering benefits Share risks Free resources for other purposes 5
Implementing Best Sourcing Best Sourcing Policy Implementation Execution at project level Want to How to Gain buy-in Best Sourcing as strategic organisational tool Execution of Best Sourcing projects Standardise, Consolidate, Demand Aggregation 6
Competitive Considerations for Best Sourcing Cost Efficiency (labour, infra, tax and regulatory costs) Conducive business and living conditions (political stability, robust and trusted infocomm infra quality, IPR, Cultural adaptability, data protection) Quality of Human Capital (availability and skills, education and language, attrition rate) 7
Outsourced Projects IT Services IT support System Administration and Operations Document Management File Registry Digital Archive Library Services Administrative Functions Payroll processing Claims processing Cheque Processing Customer service counters Training Administration 8
Summary: Best Sourcing Drivers and Obstacles Fear of managing process Lack of competencies Staff issues Lack of internal measures Fear of loss of control Budget Cuts Rising Public expectations Limited Resources to meet new challenges Cost savings Focus on core 9
Overview on Building BPO Industry in Singapore Increase revenue and employment Stimulate Demand Enhance Supply Capability Development Public Sector Demand Leverage on Govt s Best-Sourcing Efforts Encourage foreign companies to work with local companies Leverage on inter agencies campaigns (e.g. MOF) Private Sector Demand Demand aggregation Work with key verticals to seed projects: Transport & Log, Finance, Healthcare, Mfg Foreign demand inflow such as shared service centres etc aggregation of SMEs -Enhance companies capabilities thru certification progs, eg escm, & formation of indy assocation - Develop manpower capabilities at all levels thru BPO manpower framework, new courses, & seminars. - Infrastructure 10
Why Business Process Outsourcing (BPO)? BPO is a high growth sector Gartner estimates the global outsourcing market to be worth US$178b by 2008 Singapore is recognised as a leading business and outsourcing hub globally Our ICT industry is well-positioned to tap on this market Ecosystem of Singapore IT coys and MNCs providing services for key processes and functions across industry verticals Singapore IT coys recognised for its BPO capabilities. NCS and Emerio are ranked among the Global 100 Outsourcing companies by IAOP Industry leadership through SITF Best Sourcing Chapter 11
BPO: Our Industry Development Efforts Promote Singapore as a global outsourcing hub for high value and mission critical activities Focus on attracting shared IT services & BPO operations Support in product development and pilot The hub and spoke model: partnering with China Ensuring a conducive business environment Ensure competitive overall business cost Includes Intellectual Property protection, security, data protection etc Efficiency in preventing defects/ re-do Develop manpower competencies Support development of industry standards. E.g Singapore standard on BCDR 12
Thank You 13