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Slide No. 1
Company Confidential
Experiences with Offshoring in India
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Slide No. 2
Company Confidential
Private Ltd., Inception - 1999 Active - 2000 Acquired by KBC – 2002
KBC Perspective Cost Reduction Multisourcing strategy Resources – Highly educated
Highly motivated Tried out with Partners
ODC & 3P Business
ValueSource
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Slide No. 3
Company Confidential
Why India?
> 1 million ICT professionals Still growing 100.000 ICT/year Over 1.000 universities in India
English is common language Tradition and experience in ICT offshore outsourcing
Large number of high quality ICT-companies are located in India
Most important player in the ICT offshore market Pro-IT business climate with local Indian Government support
Tax reduction
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Slide No. 4
Company Confidential
Why India?
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Slide No. 5
Company Confidential
Six major risks in general
Communication / cultural barriers Misunderstanding of requirements Quality assurance Differences in company
infrastructure and processes Higher attrition in India due to
different market circumstances Concerns about intellectual property
security
To offshore or not to offshore ?
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Slide No. 6
Company Confidential
Impact on the onshore team
Planning becomes more strict Intensive support : takes up to 30% of the estimated time
in specific phases of the project lifecycle (e.g. testing) Sender is E2E responsible for final delivery but
does not have full grip on the detailed activities Time difference (3,5h/4,5h) can be an advantage
as well as a disadvantage Acquisition to maintenance needs more attention and
planning Usage of standards (tools, processes) is a must
To offshore or not to offshore ?
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Slide No. 7
Company Confidential
To offshore or not to offshore ?
Key Success Factors Work preparation Clear agreements and responsibilities Stability of scope Planning and milestones Acceptance criteria / quality metrics Clear escalation channels
VC meetings (weekly / monthly) Accountant Meetings (quarterly)
Trust & believe
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Slide No. 8
Company Confidential
Captive offshore What we learned
Planning and pro-active work need to be taught
Shared ownership reduces the sense of responsibility
Implicit knowledge and agreements need to become explicit
Clear definition of responsibilities is a mustVST PCH
Coaching
Clear transition process
Experiences and lessons learnt
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Slide No. 9
Company Confidential
Indian culture FactsStrict follow-up of defined procedures Positive attitude and eager to learn Professional pride Strong focus on technical skills A lot of respect for hierarchy
Results in less sense for initiative Coaching is no automatism Assertive attitude continuously needs to be
encouraged
Experiences and lessons learnt
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Slide No. 10
Company Confidential
Indian culture What we learned
Information sharing is no common attitude ~ job protection
Focus on quick growth instead of becoming job specialists
Designation = status symbol Attrition rate is higher than we are used to
convert attrition into job rotation Recruitment and training takes time in India as well Attention needs to be paid to soft skills:
communication, assertiveness, coaching…
Mgmt training @ VST
Setup clearCommunication-flow
Improved HR policy
In time announcementOf WL
Experiences and lessons learnt
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Slide No. 11
Company Confidential
Job execution Facts
Time is not always on your side, impact on short-term projects (especially towards interface areas)
Knowledge transfer and knowledge retention require continuous attention due to attrition
Huge translation effort for transition of existing systems
Project life cycle becomes even more strict All tasks need to be listed clearly, take nothing for
granted
Experiences and lessons learnt
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Slide No. 12
Company Confidential
Job execution What we learned
Offshoring larger chunks ensures better built-up of knowledge (create scale advantages)
Well-documented procedures are carried out without background knowledge
Delivery of quality has less priority than delivery in time
Quality of testing needs to be improvedDocumentation
mgmt
Quality mgmt
KT process
Experiences and lessons learnt
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Slide No. 13
Company Confidential
In general Best productivity & results in conversion projects (up to 100%
performance) Technical-oriented tasks = quick win
Offshoring of projects starting from detailed technical design assures
Better knowledge of project functionalities Better quality of testing
Transfer of maintenance (existing systems) High investment-costs; profitable only after 2 years First-line production support offshore – second line onsite
creates mutual trust Beeper support Time-difference = benefit (24/7 support)
Experiences and lessons learnt
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Slide No. 14
Company Confidential
In general
Maintenance of offshore-developed projects stays offshore Less transition effort Good knowledge of the system
Adding low-priority work to guarantee continuity Quick riskless start for new starter Pipeline dry-up is killing loyalty triggers attrition
Experiences and lessons learnt
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Slide No. 15
Company Confidential
“Culture comes in layers, like an onion. To understand it, you have to peel it,
layer by layer.”
Experiences and lessons learnt
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Slide No. 16
Company Confidential
Put in place a clear governance
Strategic : High Management Structure
Technical : Account Meetings – Facts, figures & prognosis
Operational
Experiences and lessons learnt
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Slide No. 17
Company Confidential
Put in place a clear process
Should fit both organizations
Should fit the technology
Should fit the complexity
Should fit the time to market
Experiences and lessons learnt
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Slide No. 18
Company Confidential
Communication
Open
Writing
Biweekly – Fortnight
Discussions
Arguments
Feedback
Perception
What is different ?
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Slide No. 19
Company Confidential
Socializing
A must
Privacy
Forget it
Time Management
The plan
to be or not to be flexible
What is different ?
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Slide No. 20
Company Confidential
Assertiveness/Initiative
Appreciations
Job Perception
learn & move on
info sharing
Working hours
What is different
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Slide No. 21
Company Confidential
ODC VENDOR
Way of Working in your hands Contractual Obligations
Attrition Mitigation Growth Knowledge
Attrition clauses needed Implementation depends on market
Older technologies Advantage Disadvantage
Newer technologies
Expectation employees Compare with ODC Set expectations Right on growth/Onsite Be innovative
Expectation Employees Compare with market (growth, salary, continuous benchmark)
Similar processes Inbuilt with Q guarantees
Own processes Issues solved in function of vendor, timing,
contract
Knowledge in both places Exit clauses needed
Comparison