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Sourcing Strategies
Leo Kwok40034280
Gaargi Sharma51485416
XING Sang, Shania 51159740
Tsang Wan Ching, Venice 51466936
Kwok SiuChun,Vincent 51442023

2. Agenda
2
Introduction
Process outsourced by Citigroup
Decision making process
Outsourcing considerations
Risk involved
Comparison of expected outsourcing strategies & real situation
Competitive Advantage brought by outsourcing
Recommendation
Conclusion
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What isoutsourcin ?
Outsourcing
The practice of contracting out a business function previously performed in-house to an external provider
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Business Process Off-shoring (BPO)
Subset of outsourcing

Involves the contracting of specific business operations/functions to a third party

Comprised of two methods of outsourcing
Nearshoring
Outsourcing to nearby foreign countries
Offshoring
Outsourcing to distant foreign countries
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Reasons to outsource
Cost advantages
Focus on core competencies
Improve overall efficiency
Increase customer satisfaction
Gain competitive advantage
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Outsourcing Lifestyle Model
Building block 1
Investigate
Building block 2
Target
Building block 9
Refresh
Building block 3
Strategize
Building block 8
Manage
Building block 7
Transition
Building block 4
Design
Building block 5
Select
Building block 6
Negotiate
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Citigroup Inc.
American multinational financial services company based in New York City.
Formed from one of the worlds largest mergers in history by combining Citigroup and Travelers Group together on April 7th, 1998.
Over 200 million accounts spanning 140 countries.
Primary dealer in US Treasury securities.
One of the Big Four Banks
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Citigroup and Tata Consulting Services
Tata Consulting Agency acquires Citigroup Global Services for $505 million on Oct. 8th, 2011.
$2.5 billion contract providing outsourcing services, application development, and infrastructure support to Citigroup and its affiliates for the next 9.5 years.
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Processes outsourced by Citigroup
10. Processes outsourced by Citigroup
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CGSL services five of Citigroups nine product lines in more than 45
countries:
11. Processes outsourced by Citigroup(Cont)
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Decision making process for outsourcing
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The decision making process I
Why does Citigroup choose to outsource?
If you dont do it, you wont survive.
-Daniel Marovitz,2006
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The decision making process II
Indentify sourcing strategy :
Offshore outsourcing
Choose which function to be outsourced:
BPO Non-core competencies
Select outsourcing service providers
-Country
-Company
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The decision making process III
Outsourcing considerations - Country selection
Lower labor rates ?
Culture?
Gvmt policy?
Regulation?
Citi
Risk involved?
Sufficient supply of qualified labor?
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The decision making process IV
Service Provider selection & evaluation I
Does the SP
Have the ability to fulfill detailed business requirements of Citigroup

Tangible resources (e.g. robust IT infrastructure, equipment )

17. Intangible resources (e.g. talent, human resource)Have relevant experience in providing the required services
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The decision making process V
Service Provider selection & evaluation II
Does the SP

Have satisfactory performance track record in providing similar services

19. Have financial strength to take the engagement and compliance to requirements 20. Large in size-have a group chunky enough to amortize physical cost 21. Have good reputation and social recognition Goodwill