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Outsourcing and the Technology Business


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Title: Outsourcing and the Technology Business

Outsourcing and the Technology Business
  • Presented by
  • Soufi Fazai
  • Syed Khurshid
  • Alex Lai
  • Christie Martinez

Organizational Background
  • History
  • Industry
  • Services
  • Structure
  • Financial Situation
  • Competition
  • Customers

  • Founded in 1995
  • Privately Held
  • Filed S-1 on February 12,2007 to become public
  • The largest independent screening providers
    focusing on employment background screenings for
    large and mid-sized organizations
  • Delivering more than 50 service offerings in more
    than 200 countries and territories
  • Developed the first Internet-based background
    screening solutions for its customers
  • Comprehensive domestic and international coverage

  • Reasons behind the growing demand for background
    screening solutions
  • Increasing public awareness of potential security
  • Laws and regulations that governments and other
    regulatory bodies have established to identify
    and minimize potential threats.
  • The background screening market estimated to be
    4 billion in size and to consist of more than
    1,000 screening firms.

  • Background Screening
  • Drug Health Screening
  • Pre-Integrated Solutions
  • Employment Application Solutions
  • Industry Solutions
  • Global Verifications

Source for Employment Screening Services
  • Criminal Records Searches
  • Sex Offender Registry Searches
  • Social Security Number Trace
  • Social Security Number Validation
  • Employment Verifications
  • Education Verifications
  • Credit History Examination
  • Motor Vehicle Records Checks (MVR/DMV)
  • Professional License Verification
  • Professional Credential Verification
  • Professional Reference Checks
  • OFAC / Prohibited Parties Searches
  • FDIC and Financial Industry Searches
  • Civil Court Records Searches
  • Military Record Verification
  • Workers' Compensation History
  • International Background Checks
  • Volunteer Background Checks
  • Industry-Specific Searches
  • Drug and Health Screening

Global Verifications
  • HireRight Global Services
  • Criminal historyEducation and credential
    verificationsEmployment verificationsLocal-langu
    age media/public domain searches and integrity
    checkingDriving records checksCredit
    reportingDue diligence checkingProhibited
    PartiesIndustry- and country-specific

Other Services
  • Policy Development Collection Site
    Identification On-site Collection Training
    Medical Review Officer (MRO) DOT Controlled
    Substance Abuse and Alcohol Form DOT
    Pre-Audits DOT Audit Assistance Expert
    Witness Testimony

  • Corporate Headquarters Irvine, CA, USA
  • Major Shareholders Robert W. Baird Co., DCM -
    Doll Capital Management, Goldman Sachs, Split
    Rock Partners
  • Notable Individual Investors David Duffield,
    founding CEO and Chairman of PeopleSoft Peggy
    Taylor, co-founder of PeopleSoft
  • Management TeamEric Boden - President and
    CEOJeff Wahba - Chief Financial Officer Lisa
    Gallagher - Vice President, Operations

Financial Situation
  • HireRight ranked number 169 on Deloittes 2006
    Technology Fast 500, a ranking of the 500 fastest
    growing technology, media, telecommunications and
    life sciences companies in North America.
  • From 2001-2005. HireRight grew 1,034 percent
  • Significant revenue growth over the past five
  • HireRight ranked 7th on the 2006 Technology Fast
    50, which is a regional ranking of the 50 fastest
    growing technology firms based in Orange County,

  • Other Employee Background Screening Firms

Competitive Advantage
  • Reasons for Hire Right's success among
  • Industry-leading employment screening solutions
    developed in direct response to market needs
  • Real-time access to all background screening
    reports via the Internet anytime, from anywhere.

Competitive Advantage
  • Single web-based order interface Consolidated
    user-friendly reportsPrivacy and consent forms
    in the local language where requiredAround-the-cl
    ock multi-lingual verifications staffWorldwide
    research networkCompliance expertise in
    verifications and employment law as well as
    European Union and Asia-Pacific data privacy
    requirements24x5 customer service

Customers and Partners
  • Health Care
  • Financial Services
  • Transportation
  • Education
  • Oracle
  • PeopleSoft Vurv VirtualEdgePeopleAdminDepl
    oy SolutionsTaleoPeopleclickPrevisorHewitt

The Interview
  • Wednesday, March 7th, 2007
  • Lisa Gallagher, Vice President of Operations
  • Joined the company October 2000
  • Responsible for all aspects of Hire Rights
    operations, including occupational health
    services, background verification and customer
    service departments
  • Cal State Fullerton Alumnus
  • After she began working with the Indian market,
    she joined the Hunger Project to end chronic
    hunger in Bangladesh, Sub-Saharan Africa, and the
    smaller villages in Latin America.

Outsourcing Activities
  • HireRight, Inc. strongly believes in offshoring
    and outsourcing and has activities in
  • Estonia
  • Russia
  • India

  • Production parts of software production is sent
    to Estonia to be produced but more security
    related software production is sent back to the
    US for finalization.
  • Does product development and testing
  • Over 50 employees

Moscow, Russia
  • Builds software solutions
  • Mostly does modular pieces of production to keep
    intellectual property in the US
  • Equivalent to 10 full time employees working for
    Hire Right, Inc.

  • This is the largest part of Hire Rights
    outsourcing and requires the most attention
  • Subcontract to company in India which has
    approximately 150 full-time employees working for
    Hire Right
  • Majority of Hire Rights entry-level work-load is
    done in India
  • India works to verify employment education
    through the internet and will handle other
    screening processes for Hire Right

United States
  • Screeners in U.S. handle the calling for
    verifications (due to Indian accents which might
    turn off customers and applicants)
  • All server information stays in the U.S.
  • Production of intellectual property and sensitive
    aspects of software done in the U.S.
  • All administration takes place in U.S.
  • U.S. provides specs to Estonia and Moscow for

Outsourcing by Competitors
  • Less than 10 of the competitors outsource
  • Reasons for not outsourcing
  • Lack of control
  • Cultural issues
  • Fear of what customers will think
  • Fear of the unknown
  • Takes a great deal of work to outsource
  • Companies have experienced problems with
    outsourcing sometimes because they do not take
    careful, measured approach
  • Hire Right, Inc. made a partnership with their
    subcontractor so all are committed to success

Benefits of Outsourcing
  • Substantial financial benefits and cost savings
  • Has brought down the cost of doing business
  • High quality of output
  • Outsourcing has allowed Hire Right, Inc. to
    increase their customer base in other countries.
  • Started with 42 countries but now providing
    services in over 200 nations.

Benefits of Outsourcing
  • Able to get college graduates who will work for
  • Cannot find this in U.S. very easily most
    graduates do not work for that little of money or
    the turnover is very high
  • More aligns with what the customer is willing to
    pay and what Hire Right is willing to spend
  • Culture in India is to follow directions
  • To ensure this, Hire Right created processes

Issues with Outsourcing in India
  • Original CEO of the subcontractor is Indian but
    has worked in the U.S. before therefore he
    understands the issues faced by the U.S. firms
    and is easy to deal with.
  • Production issues led to renegotiation of the
    work contract.
  • Workers wanted to reduce the production quota
  • New contract allows for payment per piece of
  • This secures the profitability of Hire Right,
  • Factored in incentives and penalties

Issues with Outsourcing in India
  • Lower production output
  • Seems to not do as well with problem solving or
    thinking for themselves
  • High turnover, especially for woman who are
    unmarried and still live at home
  • Work hours contribute to this they work US
    business hours

Impact of U.S. Economy
  • Believes that there is a positive impact
  • Most US multinationals are outsourcing now
  • Lowers costs to businesses are passed on to
  • More purchasing power
  • Unemployment is at an all-time low
  • Many positions available in growing retail sector
    for those displaced by outsourcing
  • Most outsourcing affects entry-level workers

Thank you!
  • Source www.hireright.comFor more information,
    visit the company's web site at www.hireright.com
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