E-Commerce Business Model Types
e-commerce business model types
Offshore Outsourcing business models. Part Ii
One of the main points while developing your offshore outsourcing strategy is choosing the right delivery model for your type of business. In this article we will talk about outsourcing business models, their types and advantages.
Dear Readers,
We continue our series of articles about offshore outsourcing business models. This article is devoted to the second generation of offshore business models. For more information, please, read Offshore Outsourcing Business Models. Part I
The Second Generation of Offshore Business Models
Models of this generation tend to be more sophisticated and to span multiple models of the first generation.
1. Global Delivery or Blended Outsourcing Model
In this model a company outsources to a multinational service provider that offers a mix of onsite, offsite onshore and offshore resources. The global delivery model allows vendors to innovatively distribute and manage engagements across multiple global locations.
Advantages: Lower rate without risk, faster time to market, saves a client from investing in a huge team of employees for multilocation projects. It is a preferred choice for large consulting companies.
2. Hybrid Delivery Model
The hybrid outsourcing model, also known as the dual-shore model, combines onsite and offshore services and becomes the business model for midsized service providers headquartered offshore. The onsite team of the provider does all the requirements gathering and development of detailed specifications, handles client-facing components of the project. The offshore office takes care of the coding, testing, and bug fixing.
Advantages: near 24-hour work cycle; lower-cost resources; this model enables the client to directly interact with the service provider through the onsite team and simultaneously enjoy the benefits of offshore outsourcing.
3. Global Shared Services Centres
Global shared services centres (captive centres, offshore insourcing) are a combination of onshore shared services and offshore captive centres. The global centre is run as an independent business, with its own budget and bottom-line accountability.
Advantages: Global centres have guaranteed markets for their services, alleviate some of the organizational issues such as control and politics that crop up when firms relocate back-office activities offshore to external providers.
4. Build-Operate-Transfer (BOT) Model
BOT tend to build on first-generation ODC models. IT replicates “build” and “operate” parts from the ODC model and adds its own “transfer” part. This is how it works. It is typically built and managed in three phases.
1) Build. The offshore partner provides a complete solution for building a dedicated centre for a company in a particular country.
2) Operate. The offshore partner provides a comprehensive set of operational management services.
3) Option to Transfer. The client has the option to buy the entire operation after a fixed period.
Advantages: The clients are able to focus their management time on their core business rather than operational issues. The risk of execution is minimized, money can be spent on core functions.
5. Offshore Multisourcing Model
Multisourcing is the practice of using multiple offshore business models and suppliers.
Advantages: This model allows more flexibility, ideal for companies that take risk-averse approach to outsourcing. Companies that are new to outsourcing tend to multi source until they are comfortable with the whole process.
The source for the article: Offshore Outsourcing. Business Models, ROI and Best Practices by Marcia Robinson, Ravi Kalakota.
About the Author
Do my homework part 1?
1. List and describe the four types of “Commerce” models in use today.
2. List the main e-Business models. (5)
3. What is the difference between a durable good and a non-durable good?
4. Which of these goods do you think consumers purchase online?
5. Define channel conflict.
6. Why do you think e-Business models develop a channel conflict?
7. What is the goal of being in business?
8. Define revenue model.
9. Describe the six revenue models.
10.Define business model.
11.What is a pure-play model?
12.What is a bricks and clicks model (also called click and mortar)?
13.Explain the B2B model.
14.List characteristics of the B2B model.
15.What is EDI? (Think back to e-Commerce I or search for it.)
16.Define Extranet.
17.List and explain the three types of net markets.
18.Why would a business use net markets?
19.List characteristics of successful B2B companies.
20.Explain the B2C model.
Um… No. Do your own homework. If you need clarification on a term, you’ll probably find plenty of people happy to help you.
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