maria de boeck offshoring in india - ict-symposium 2010

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Slide No. 1

Company Confidential

Experiences with Offshoring in India


Slide No. 2


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


Slide No. 3


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


Slide No. 4


Why India?


Slide No. 5


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 ?


Slide No. 6


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



Slide No. 7



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


Slide No. 8


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


Slide No. 9


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



Slide No. 10


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



Slide No. 11


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



Slide No. 12


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



Slide No. 13


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)



Slide No. 14


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



Slide No. 15


“Culture comes in layers, like an onion. To understand it, you have to peel it,

layer by layer.”



Slide No. 16


Put in place a clear governance

Strategic : High Management Structure

Technical : Account Meetings – Facts, figures & prognosis

Operational



Slide No. 17


Put in place a clear process

Should fit both organizations

Should fit the technology

Should fit the complexity

Should fit the time to market



Slide No. 18


Communication

Open

Writing

Biweekly – Fortnight

Discussions

Arguments

Feedback

Perception

What is different ?


Slide No. 19


Socializing

A must

Privacy

Forget it

Time Management

The plan

to be or not to be flexible

What is different ?


Slide No. 20


Assertiveness/Initiative

Appreciations

Job Perception

learn & move on

info sharing

Working hours

What is different


Slide No. 21


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

maria de boeck offshoring in india - ict-symposium 2010

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