Outsourcing - is a Dead End. Strategic steps on how to evolve your business model.

Why outsourcing model won't work in the long run? How the company’s values define its goals? How a service company can be different? The alternative ways of generating revenue and delivering the real value: building great products, from solutions for customers to own releases.
Sharing Railsware's experience of evolving from Outsourcing to Software Consultancy and to Product Studio.

Transcript

1. Outsourcing - is a dead end ITEM 2018 Strategic steps to change your business
2. Sergey Korolev Managing Director
3. Outsourcing Issues & Risks Foreign Product Companies in Ukraine They don’t need intermediate layer
4. Outsourcing Issues & Risks Foreign Product Companies in Ukraine Foreign Product Companies relocate top talent They don’t need intermediate layer Most popular articles on DOU about relocation
5. Outsourcing Issues & Risks Foreign Product Companies in Ukraine Foreign Product Companies relocate top talent Salaries VS Rates They don’t need intermediate layer Most popular articles on DOU about relocation Salaries are growing while rates are not. Margins are low
6. Outsourcing Issues & Risks Foreign Product Companies in Ukraine Foreign Product Companies relocate top talent Salaries VS Rates Competition on pricing They don’t need intermediate layer Most popular articles on DOU about relocation Salaries are growing while rates are not. Margins are low With each other 
 and local engineers
7. Does anyone think that crisis is knocking on the door?
8. Ukranian GDP/capita $2,639
9. German GDP/capita $44,469
10. Ukraine VS Germany $44,469 $2,639 16X
11. Resource-based economics
12. <= we sell we buy => Resource-based economics
13. Is Outsourcing a resource-based type of business?
14. HR KPIs hire more people! Sales KPIs sell more people!
15. Ermm… what about building great products?!
16. Can we even categorise those companies as IT-business?
17. Can a Service Company be different?
18. “Outsourcing VS Software Consulting: как поднять рейты до 75 USD/час” https://dou.ua/lenta/columns/software-consultancy/
19. Engineering Design Project M anagem ent Outsourcing VS Software Consulting Product management Business Advisory Engineering Design
20. Competitive Value Proposition
21. Values define Goals!
22. Values must be different!
23. Building great products is Value #1
24. Can Service business be even more exciting?
25. Let’s build own products!
26. “Product X” real case
27. Railsware Consulting Product X Diff X - RWC Diff X / RWC Revenue $1,300,000 $10,000,000 $8,700,000 7.69 Losts - $1,040,000 - $1,500,000 - $460,000 1.44 Profits $260,000 $8,500,000 $8,240,000 32,69 RW Service VS “Product X”
28. Outsourcing Software Consulting Product Studio
29. Build great products Deliver them to the market Ensure their steady growth Multiply success Product Studio Produc t Idea Product Studio Successful Product
30. Production Design Engineering Marketing Sales HR Support Operations Accounting Production Design Engineering Marketing Sales HR Support Operations Accounting Software Consulting VS Product Studio
31. Smart Checklist 1.2K+ firms 100K+ users
32. Happy Clients
33. 220K+ users
34. Happy Clients
35. Client’s Idea Product Studio Our vision to avoid the dead end! Own Idea Successful Product Successful Product
36. Q&A