Outsourcing: Less money-saving, more time-saving

Posted by Sinlung
By Nick Heath

Despite the recession and the associated belt-tightening around enterprise IT budgets, cutting costs isn't front and center for many companies when it comes to outsourcing, according to one of India's largest services firms.


Suresh Vaswani, the joint CEO of IT business at Wipro, that saving money through better business processes is a high priority for enterprises.

"In yesterday's world, customers were happy if you gave them a 20 percent cost take-out. In today's world, if a customer wants a 20 percent cost take-out he can always reduce the salary of his people and people will be happy just to hold onto their jobs."

"What the customer wants you to do today is to take the business process and collapse it," he said, "whether it is procure-to-pay or billing efficiency, [the customer wants] anything that changes the game and results in a lot more cash flow or increase in customer satisfaction."

According to Vaswani, one example of such process-polishing is streamlining a company's collection process--cutting the time taken to bill clients from 67 days to 50.

"To do that you also need to look at the IT, you can not change the process unless it is adequately IT-enabled," he said.

"That 17 days reduction completely changes the game so far as the cash situation of the customer is concerned, and cash is king today."

Wipro recently struck a deal to build an Oracle-based ERP platform for supermarket giant Morrisons, said it is being handed greater control of its clients' businesses in return for the outsourcer delivering faster cash flows and better customer service.

Vaswani said its customers are increasingly demanding similar tie-ups, where large scale IT overhauls such as systems integration are combined with a retooling of business processes.

Alongside Morrisons, Wipro has won a number of what he called "fully fledged retail process implementation" contracts in Europe, he said, adding that its U.K. business is growing fastest in the retail and energy and utilities sectors.

While efficiency is outsourcing's new watchword, businesses haven't lost interest in cost-cutting: Wipro's users are demanding cheaper deals and often scaling back on more expensive 24/7 service arrangements, according to Vaswani.

Nick Heath of Silicon.com reported from London.