does a captive make sense for my organization

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Post on 21-Jan-2015




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There is a lot of "press" out there that talks about the pros and cons of captives in India. There is one view point that captives are unnecessary, and yet another that captives are a much better bet than outsourcing to a third party. As always, value lies in the eyes of the beholder and this ppt provides an evaluation framework for someone wanting to make a decision



2. The matter in these slides represents my views based upon myexperiences and inputs I have received from several folks I havebeen in touch with over the years.I assume no responsibility for the success or failure of any outcomefor anyone adapting or adopting anything I have mentioned herein.Take your own risks and your own decisions.That being said, I am licensing the use of these slides as acreative commons license. You can use these with no obligation just besure to insert your appreciation on my andshare your work as per the Creative CommonsLicense at 3. Is a captive a good strategy forme? As a first step, its a good idea to answer thefollowing questions: Do we have clearly articulated objectives (this includes a prima facie business case) Is there leadership commitment from the top to make this happen? Is the organization committed to charging a top level executive to drive the strategy Does the company have mature global engagement practices? 4. Clear articulation of objectives So does talking about cost-savings make sense? Of course. This is one of the core foundations of the model What are other business objectives that make sense Just cost-savings is not good enough. There needs to be a solid businesscase that could be derived from: The need to keep strategic/IP related work inhouse To drive better productivity and responsiveness from vendors, from an on-the-ground transition them to being partners in the true sense To gain access to young talent To get access to talent with the latest skills To drive process improvement in the parent organization To ensure high speed 24*7 response to business needs, at lower costs To build specific competency centers at lower costs To build a global brand As a precursor to entering the Indian market etc 5. The cost angle Isnt it cheaper to outsource to a vendor? Could be. But this isnt about competing with a vendor. It is about an overall strategy where the vendor is a part of the eco system 6. Leadership commitment This needs to be from the very top. There canbe no compromises. Without this, this strategyis a non-starter or will burn out This needs to be articulated at the Board leveltoo and must form part of the overall strategicreview of the organization 7. Commitment to having a top levelexec drive the strategy? This too is crucial. The person does not need tobe identified on day 1, but without this personchampioning the offshore cause, the offshoreentity will flounder to gain traction andcommitment from the business leaders 8. Does the company have matureglobal engagement practices? This may not be the case on day 1. There however needsto be a commitment to rapidly transition to that point This is crucial when you consider the socio-culturalimpact that an offshoring strategy can cause Additionally the non-existence of this brings up potentialconflict where the company may have had past vendorrelationships that are comfortable Finally, global roles could be performed out of Indiaitself. Example: global customer support function 9. What does my going-in positionlook like?PLOT YOUR STATUS ON AN OFFSHORE CAPTIVE EVALUATION CHART. Example forCompany Z:It is not important to have every objective This is non- nailed downnegotiable.completely on Either it exists day 1. But aor it doesnt broad businesscase needs to beThis too is non- A low level articulated, andnegotiable. If thesimply meansadditions can becommitment is changes need to made as the unsure, dont be made. But offshore entityproceed this is crucial maturesand needs to be considered 10. Shouldnt attrition levels in India bea criteria? A good people strategy sits at the heart of asuccessful captive However attrition is not a criteria for taking adecision to enter India (at least not today) There are several innovative and outstandingHR practices in place that minimize attritionand even use it as an opportunity to generatefresh talent and thinking 11. Thank you