Global-O&O

With the market demand ramping up for Indian IT and BPO vendors, finding and keeping right talent is once again becoming an important vendor management discussion for the clients and a high priority HR discussion for the IT/BPO firms.

As a number of clients continue to be cautious on the economy, off shoring work has steadily ramped up. Less stellar than the earlier growth, the off shoring growth is evident in the quarterly earnings of off shoring firms and the ramp up of hiring targets by these firms.

With a post recession up tick in the demand for off shoring services, a number of Indian firms are getting aggressive about how to find and more importantly keep employees. Attrition rates have slowly inched back up, wage hikes are being announced by companies to hold on to employees and campus hiring is seeing a surge as the concept of bench strength again trickles back. Ramping up for new client engagements and transitions are taking longer as finding the right people at the right price is tougher now.

Table 1: Attrition Rates in Off shoring Firms

Post 2008, when the global economy was in a freeze mode, the Indian firms had reduced campus hiring, limited employee perks, pay raises, promotions. For a number of  employees in this industry, which had only seen a dramatic growth, the slowdown was a tough wakeup call. For a number of these employees, they had limited opportunities to move to and stuck around waiting for the right opportunity. These employees although more wiser in their career tracks are now willing to jump ship for the right opportunity and pay hike and have less loyalty to their employers. At the same time the jump to a new opportunity also is a longer process as employees are now doing their due diligence before jumping ship, specially the middle managers.

Where India has a demographic advantage of a large growing young workforce it does face the challenges of an archaic education system which ill prepares people for real life global workforce and adds to the supply side challenges for global firms. Where in companies have taken the ownership of training their employees and make them more marketable, during the last couple of years when the markets were slow, the firms were reluctant to invest in training adding to the supply side vows.

For companies which are working with these vendors in India, these supply side challenges is a cause of concern. These companies are finding that where the teams have spent time together building and training staff with vendors, key employee leaving causing more disruption than if the same employee was local.

There are a few issues which emerge due to the supply side challenges for companies who are outsourcing work or planning to outsource work.

1. Firms which are outsourcing need to be prepared for increased cost of transition, specially those starting out new as it takes longer for firms in India now to find and on boarding the right candidates.
2. Firms have to be careful that they are not getting the less qualified ( Team B or C or D) staff for their assignment as this has serious downstream impact. A number of vendors would try to pass on candidates which may not be qualified for the task.
3. HR management even if the staff is a vendor staff is a critical part of planning for globalization. The firms have to take a higher degree of ownership to help retain key staff.
4. Knowledge retention strategies have to be revisited to ensure that higher attrition results in limited disruption of business as usual.
5. For clients looking for vendor staff, it is important to get and look for the right level of staffing. In a number of instances we have found that if you look for the superstar all the time, it is not a viable option. Define the role clearly on what you are looking for, and find people that fit the role and can grow in that role.
6. Training and replacement planning for staff leaving has to be planned as part of the discussion with the vendors to ensure that the companies are not being charged for higher attrition or staff turnover. Plus firms have to retain more onshore staff to deal with higher attrition offshore (increased cost).

Overall the supply side challenges will continue to exist with emerging economies where the gap between supply side and demand both domestically and globally is very high.  That coupled with the fact that the job creation in the US markets is still lagging and there is a talent base available in the US which is willing to work for less.

For firms which are outsourcing, planning for supply side challenges in India coupled with availability of local talent should be an important part of looking at their outsourcing roadmap on how they operate today and for the future.

Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is a specialized globalization  firm providing advisory, training and staffing services to firms in  US and India. We work with  firms in the US  which are exploring low cost options for IT, Business Process work and  looking at ways to further optimize cost, manage operational risk and setup presence in India. Contact us at info@corrystone.com  to learn more about how we could make your journey more productive by leveraging our experience.

HP announced today that it plans to reduce 9,000 employees in their enterprise services business unit and automate the service offerings to their customers.  The task will involve consolidating data centers, management platforms and automate delivery to their customers including data center management. Over the last 18 to 20 months HP has been integrating EDS into their platform and has eliminated a number of job roles. HP had announced that it would layoff 24,600 people when it made the EDS acquisition. The new announcement of the 9,000 job cuts is in addition to the one announced earlier.

As services move from dedicated infrastructure support to cloud based, automated, remote management and delivery model, automation would continue to play a key part in the delivery of solutions. Meaning that human touch and interface required to offer services to end customers will continue to taper down.

The internet, telecom have already created a global network where delivery from low cost location is an integral component of any service offering. There are tools available today and the infrastructure at very cost effective prices to find talent at remote location and deliver to clients remotely. Not just remote infrastructure management type of work but other work involving IT application, development, Operational processing. That is evident by the rise of the outsourcing industry across the globe and in India.  What HP seems to be preparing for is the next stage of global delivery, automation which will further reduce the number of people needed to deliver services. HP is doing this trying to anticipate the industry move to a new operating model of cloud computing, virtualization and trying to build a more automated, lean organization for delivery.

Specifically on the outsourcing/offshoring side another factor which affects firms like HP is that the deal sizes where the larger firms needed an economy of scale to win , deliver and profit  is reducing. After the financial crisis last number of years, companies are making very few 10 year, large scale transformation deals and more cautious and short term in their dealings with service vendors. So larger deals which support the scale of say an HP are going to be less the norm and more an exception. I do think that this may also effect how mPhasis which was acquired by EDS before they got acquired by HP operates. mPhasis will be more integrated into the new HP and will not be able to remain a standalong entity. Given that HP is a major client for mPhasis this seems more of a given than an option for mPhasis. 

Federal government and State Government with all their deficit are in the same boat when it comes to doing large purchases.

I was in a recent conference where people were talking about how to promote certain areas in the south to be the preferred destinations for data centers. A take away with data centers is that creation of data center should not be equated to  creation of jobs, or replacement of jobs which may have been lost in some other industry. Large data centers require  limited set of people to run and manage the operations. So setting up data centers or preferred locations for data centers is less dependent on talent availability and more on cheap power, telecom and higher local tax subsidies.  Basically large data centers are good source of tax revenues ( after a number of years when the subsidies run out!), political grandstanding and not technically large scale job creators. So as the world moves to the cloud, service providers like HP, IBM have the capability and will continue to build capabilities to deliver services with lower headcount globally. Productivity gains have always resulted in being able to do less with more and firms tend to do to save cost and as the business demand changes this get more critical.

So the combination of cloud, global delivery models, automation will continue to challenge the US corporate to find ways to create jobs stateside. HP has indicated that they plan to create around 6,000 jobs  but majority of those will be in sales and client delivery.  Wonder if the corporate America structure for service organization over the next 5 years is going to look like a pure sales organization where the delivery is either automated or happening from low cost locations ?

SOURCE: Press Release
DATE: May 25th, 2010

This is a trend which we have been saying for some time now is going to be more of the norm over the next 9 to 12 months. Combination or partnership of mid size IT firms and pure play BPO firms as these firms look for next level of growth. As mid size IT firms struggle to find ways to rise above the noise of  commoditized services and offerings and pure play BPO players look for non linear ways to grow their business, some of these partnerships are bound to happen.  Mastek , is a mid size firm and our experience of working with them has been very positive and it has a great leadership team. It has though struggled to grow to the next level in-spite of positive customer experience. Genpact on the other hand has grown to be the largest BPO provider out of India but the pure play offering, dependency on GE, still continues to haunt the firm and margins. In a number of analyst calls, Genpact continues to re-iterate that it does not need any ‘IT support’ to grow but the reality of the marketplace is different and Genpact is smart to try different options including partnerships, acquisitions.

For insurance firms looking to outsource an integrated offering is a compelling model, specially as new technology platforms are created where IT, Operations are integrated. The challenge for our clients when dealing with IT/BPO providers continues to be “integrated execution“. A number of ’single integrated’ firms  we see continue to struggle to really execute on  an integrated solution. IT, Operations, Business Consulting all run different tracks and from a customer perspective it could sometimes be a frustrating experience once they get past the sell of integrated services. Without proper planning, governance structures and contracts dealing even with a single vendor offering all, IT &  BPO could feel like a multi vendor execution  with high rate of customer dissatisfaction.

For Genpact, Mastek to make it be successful they have to work hard to provide a clear execution strategy and methodology to their customers to be a true value added to the insurance firms. Outside of that happening it could be a pure cross selling opportunity which benefits these firms  but not necessarily the customer.

What we also find is that the integrated offering is also a good strategy but not  for all companies looking to offshore.  If you have tried and been successful in working with integrated service providers (IT, BPO, KPO) we would love to hear from you.

Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is a specialized globalization  firm providing advisory, training and staffing services to firms in  US and India. We work with  firms in the US  which are exploring low cost options for IT, Business Process work and  looking at ways to further optimize cost, manage operational risk and setup presence in India. Contact us at info@corrystone.com  to learn more about how we could make your journey more productive by leveraging our experience.

Press Release

Genpact , a global leader in business process and technology management, and MajescoMastek, the U.S. subsidiary of global technology solutions provider Mastek Limited (NSE: MASTEK), today announced a new strategic partnership focused on the insurance industry. The partnership brings a new model to help transform insurance carriers’ operations, leveraging both business process management and technology solutions.

The companies will offer joint information technology and business process management solutions to large and mid-sized insurance carriers. In addition, both parties plan on developing innovative platform-based business process management solutions across the industry value chain including policy services, billing, claims, distribution management, and new business/underwriting.

Carriers today are under intense cost pressure and need to transform their business operations but are struggling to underwrite the cost associated with doing so. By joining forces, MajescoMastek and Genpact can meet this need by leveraging process efficiencies and innovative technology in a cost-effective and cost-certain model.

“MajescoMastek has always been focused on bringing transformational solutions to the insurance industry. This partnership with Genpact is another step in that direction,” said Mike Dufton, president of MajescoMastek North America. “Together, we can move to provide solutions that solve entire business problems while giving carriers cost certainty with business models that let us share in the risk with our clients — something they have been asking vendors to do for some time now.”

According to research and advisory firm Novarica, insurers across the globe are using innovative techniques in their operating models to adapt to recent changes in the economic landscape. Also, the paradigm shift in information technology in areas such as widespread adoption of business intelligence tools, social networking, Web 2.0, and mobile devices is changing the nature of all information-based businesses.

“The combination of business process management with proven IT solutions offers a very compelling value proposition to these insurers,” comments Matthew Josefowicz, Novarica’s director of the insurance practice.

“The insurance industry has been searching for a leading solution that combines industry-leading business process management capabilities with state-of-the-art asset-based offerings,” said Mohit Thukral, senior vice president and business leader, Financial Services, Genpact Ltd. “Our partnership with MajescoMastek has been met with enthusiasm from our mutual customers and we believe it will be a true differentiator in the insurance marketplace.”

About Genpact

Genpact is a global leader in business process and technology management, offering a broad portfolio of enterprise and industry-specific services. The company manages over 3,000 processes for more than 400 clients worldwide. Putting process in the forefront, Genpact couples its deep process knowledge and insights with focused IT capabilities, targeted analytics and pragmatic reengineering to deliver comprehensive solutions for clients. Lean and Six Sigma are an integral part of Genpact’s culture and Genpact views the management of business processes as a science. Genpact has developed Smart Enterprise Processes (SEP(SM)), a groundbreaking, rigorously scientific methodology for managing business processes, which focuses on optimizing process effectiveness in addition to efficiency to deliver superior business outcomes. Services are seamlessly delivered from a global network of centers to meet a client’s business objectives, cultural and language needs and cost reduction goals. Learn more at http://www.genpact.com.

About MajescoMastek

MajescoMastek is a global provider of innovative technology solutions focused on Life & Annuity carriers, Property & Casualty carriers and Capital Market firms. For over 27 years, we have combined our leading products, people, and processes to drive business impact and competitive advantage. MajescoMastek is part of the Mastek Group with over $200 million in revenues (FY2009). MajescoMastek enables technology enabled business transformation and has a track record of successful implementations.

MajescoMastek uniquely combines its wide intellectual property base, domain expertise, mission-critical program management abilities and complex solutions capabilities to help insurance carriers unlock business value. MajescoMastek delivers proven solutions in core insurance areas including Incentive compensation, producer lifecycle management, billing, policy administration, new business processing and claims. With an employee strength of over 3100 people, the Mastek Group operates across the U.S., Canada, U.K., and Asia-Pacific regions. For more information, please visit us on the Web at http://www.majescomastek.com.

DATE: May 14th, 2010

Confused.  What you see as the headline is a translation of what was supposed to read : “Thank you Bill Halter for sending US jobs to Bangalore, India”.  This is part of an election campaign for the Arkansas senate seat election where the current  Lieutenant Governor Bill Halter   is up against the sitting Senator, Democrat Blanche Lincoln.  It looks like  google translation at work literary translating halter into ‘whip’ in Hindi. A number of ads taken out by Americans for Job Security have  targeted the outsourcing support by Governor Bill Halter during his days on the board of WebMethods  (Thank You). In their eagerness to do that , the anti Bill Halter  organization send out pamphlets to the public where they botched up the hindi translation. Not that it matters! They could have put the hindi alphabhets in any random order and no one would have noticed, cared or done the translation. It does highlight the fact that outsourcing  & job loss in the US continues to be a sensitive political issue.  With the job marketing still showing limited signs of revival, bangalore continues to be the poster child for lack of job growth in the US.  Arkansas current jobless rate is around 7.8%.

APRIL 21st, 2010
Everyone is looking at ways to define and quantify innovations. A number of industry pundits have talked about shifting of innovation from the west to the emerging countries. ‘Frugal innovation’ – innovation done to satisfy needs of the bottom of the pyramid cost effectively has taken roots in developing countries like India. In India, despite the sheer number of potential consumers, the buying power of majority of people is less than 4% of the west. Combine that with the unique challenges of developing economies, be it infrastructure, politics, corruption, social nuances, innovation dollars are not something which are set aside to develop markets. To really tap the broader market segments in India innovating cost effectively be it product creation, services, processes, product distribution is a necessary survival skill.  The economist had a special section on innovation movement to the east and talks about the concept of frugal innovation plus innovation shift to developing economies ( First break all the rules  ). The economist talks about simple product innovations understanding local nuances. e.g. Nokia introducing a low cost phone with flash light as the power supply in India is erratic, to multiple address books – more than one person shares a phone. To process innovation – factory line model for heart surgeries at a south India hospital, to TCS finding out ways to use text messages to help farmers plan better their crops.

I have worked with a professor in the past, who runs an innovation network in India, providing micro funding to small entrepreneurs and what he has shared with him is incredible to see how innovation in the bottom of the pyramid is being done on a budget.

So the innovation model is less about outsourcing and more about collaboration. US continues to and will continue to be a leader in innovation and best of all how to build global businesses from innovative products and processes. There is an incredible opportunity for entrepreneurs to productize and package these ideas to the rest of the world modified to meet the requirements across the spectrum of consumers and do it cost effectively. There is also the opportunity for companies in the US to leverage these low cost innovations, processes to create a global innovation collaborative model.

Heart Surgery factory model

“In India, historically, they overpromise and underdeliver,” says Maggie Lee, the lead manager for Invesco Asian infrastructure fund.

This was in the Wall Street Journal April 12th   (LINK), an article about challenges faced by India and the dire need to build infrastructure within the country and need for private investors to make the infrastructure story work for the country.

I wonder if this is also the view shared by  companies working with IT,BPO service providers  in India ? Are Indian firms less competitive than global firms because of the “overpromise, underdeliver” (OPUD)  model ?

How should one look past the initial market sell of Six Sigma, process efficiences,  CMM level 5,  secure vendor visits to ensure that you are not being set up for OPUD delivery model ?

On more than one occasion we have worked with very driven clients which have  had very genuine intentions to get cost savings for their firms but have an unrealistic expectation  fuelled by over enthusiastic vendor sales team on the potentials promises of offshoring ( whew!) .  Managing senior leadership expectation is a key requirement for any successful initiative and by overpromising and setting the benchmark past what is achievable is something which Indian offshore vendors have to avoid. It is a competitive marketplace and as offshore services get more commoditized, vendors knowingly or unknowingly oversell their capabilities. 

Planning for work to move to a new location, new process is very disrupting and how you plan for success is critical. Some vendors we have seen over the past couple of years have done a better job in presenting the reality to their clients. For a successful offshoring initiative the onus of understanding expectation and delivery capabilities is on both sides though – company and the vendor.  So a skill you need to have within your team is to be able to have a fact based, realistic approach to create a roadmap which works for you past the vendor and market hype. A true partnership model is hard to achieve when you start with an incorrect  baseline.

Interestingly the challenge with the OPUD model is not limited to India based vendors but is also present in Multi nationals which have set up delivery capabilities in India.

I remember being shown a  cultural training course for a client  in the US where one of the questions was:

In India, “I’ll try,” in response to a request likely means:
A. “There’s not a chance”
B. “Absolutely”
C. “It probably won’t happen”

I don’t agree with the correct answer but any guesses on what the training specialist’s ‘correct’  answer was ?

Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is a specialized globalization  firm providing advisory, training and staffing services to firms in  US and India. We work with  firms in the US  which are exploring low cost options for IT, Business Process work and  looking at ways to further optimize cost, manage operational risk and setup presence in India. Contact us at info@corrystone.com  to learn more about how we could make your journey more productive by leveraging our experience.

DATE: April 15th, 2010

Genpact announced a partnership with NetSuite to offer ERP, e-commerce and CRM business process management services around the Netsuite solutions in the cloud. Genpact will bring their process expertise and business domain knowledge and work with mid size firms to implement cloud based solutions.  The sell to mid size firms is that these solutions don’t require expensive capital expenditure and offer similar capabilities as the industry leaders like SAP, Oracle financials. Netsuite also claims they are offering  the ‘real cloud’ vs those fakes out there say Oracle, SAP, Microsoft. hmmm..

Genpact which has a limited IT practice , primarily driven by discretionary spending has seen ups and downs in their transformation, process consulting and IT consulting businesses around packaged implementation.  Netsuite also signed up with Wipro as a system integration partner and Wipro will develop a practice around Netsuite product.  With the focus on channel sales, a number of outsourcing providers don’t want to be left behind as they all figure out how to marry outsourcing benefits with cloud computing. The SI practice for a number of the outsourcing firms has seen limited growth as it is dependent on discretionary spending which has been slow to start.  For a number of the offshore vendors like Wipro, Genpact  this may open up additional opportunities in mid markets, give them the ’cloud leader’ batch of honor , plus mitigate risk of losing business to the cloud. A number of analysts have predicted that the cloud may actually be a threat to the outsourcing business as companies may leverage the cloud to gain the same cost benefits they are looking for in outsourcing arrangement. That combined with supposedly less transition time and upfront capital cost makes cloud computing a viable competitor to outsourcing.   

So as a firm  is cloud an alternative to outsourcing or an augmentation to your outsourcing strategy ?

Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is a specialized globalization  firm providing advisory, training and staffing services to mid size companies  in  US and India. We work with  firms in the US  which are exploring low cost options for IT, Business Process work and  looking at ways to further optimize cost, manage operational risk and setup presence in India. Contact us at info@corrystone.com  to learn more about how we could make your journey more productive by leveraging our experience.

Press Release – Genpact, NetSuite
Genpact Limited (NYSE: G), a leader in managing business processes, and NetSuite Inc. (NYSE: N), a leading vendor of cloud computing business management software suites, today announced a strategic partnership designed to leverage the growing power and popularity of cloud computing to transform and modernize business process management (BPM). Genpact and NetSuite will provide the industry’s first BPM solutions that take advantage of the dramatic cost savings and productivity benefits of cloud computing—solutions that will enable companies to quickly realize the benefits by abandoning archaic and expensive software infrastructure in favor of efficient, cost-effective, and nimble enterprise management.

The partnership brings together the strengths of the NetSuite cloud business management suite—enterprise resource planning (ERP), customer relationship management (CRM), e-commerce—and Genpact’s industry and process domain expertise and global operating model in managing business processes for clients. As a result, businesses will have access to unprecedented control, flexibility and visibility as they seek to cut IT costs and streamline key business processes. 

Under the partnership, Genpact will employ its global IT program management and ERP consulting teams to provide NetSuite implementation services to mid-market companies and divisions of larger companies around the world. Genpact will also leverage NetSuite’s OneWorld solution to provide its world-class business process services to these clients. Genpact will draw on its extensive business process domain knowledge and understanding of clients’ key business processes to deliver best-in-class solutions, develop tools and build intellectual properties around pre-configured templates for the target market globally.
By using NetSuite’s cloud-based OneWorld solution to deliver their services, Genpact eliminates the need to buy, install and maintain the hardware, software and infrastructure that was previously required. This transition to the cloud will allow Genpact to configure the outsourced service more quickly, deliver the service more efficiently and reduce the costs and risks associated with delivering the service to clients. On average, Genpact and NetSuite expect that clients will be able to optimize their cost of running business processes and corresponding technology investments by up to 40 percent with this offering.

“Over the last few years, we have seen significant shifts in the business challenges facing mid- market companies as they manage their growth. To help address many of these challenges, mid-market companies are increasingly adopting cloud computing solutions that offer scalability and low acquisition costs,” said NV ‘Tiger’ Tyagarajan, COO, Genpact. “We believe that our alliance with NetSuite will combine our business process expertise and vast technology and industry experience with NetSuite’s robust on-demand delivery platform to set the industry standard for cloud-based business process solutions for this market segment. Likewise, we see many large enterprises embracing similar approaches for addressing their growth needs in emerging markets or to replace expensive and outdated legacy systems and processes”

“We are excited to have Genpact as the first partner utilizing NetSuite OneWorld to provide a world-class BPM solution,” said Zach Nelson, CEO of NetSuite. “Combining Genpact’s deep experience in business process management, proven program management and IT integration skills with NetSuite’s revolutionary cloud application creates a compelling solution that will allow companies of any size to cut costs, streamline their operations and increase the speed of their business. Genpact’s visionary adoption of a cloud infrastructure for BPM services is a model for “BPM 2.0″ that will generate substantial benefits for both Genpact and their clients.”

DATE: April 9th, 2010

According to a recent survey conducted by Brookfield Global Relocation Services and reported by economictimes,  India is the second most challenging location for expats after China (LINK).  As per the report China,India, Russia ( 75% of the BRIC nations) are ranked #1,2 & 3 in terms of challenges for expats. The key data points seem to be around finding suitable housing, schools, healthcare and immigration -red tape. People with families tend to make a partial move with the families either close by or the individual making a move to be there alone. India and China, according to the study had the maximum number of failures for expat assignments and also had the maximum number of opportunities.

This reminded me of an engagement we were involved in where the organization was setting up an offshoring program. The senior management and HR faced some challenges around how to get some key management and subject matter experts to move to India for a limited  period ( 18 to 24 months).  “Hardship allowance” was going to be factored in the cost of the expat and the business case plus the fact that the person who is relocating gets to come back to a similar or better role onshore once the assignment is over.  There was a lot of discussion around what should be the hardship allowance and should there be a hardship allowance. Interestingly the conversation of hardship allowance was for non-Indian employees and for Indian employees who were more than eager to get a chance to be in India for a certain period of time, the concept of hardship allowance was a discussion point although not a critical decision point. The end result was a solution which was successful in getting the program to a steady state after some initial bumps on the road.

This was pre-financial crisis when the unemployment rate in the US was still in the 4.5% range and business was good. Pre-financial crisis period saw a large number of assignments to India and China as the developing markets were looking for management expertise to grow their businesses. Retail, Energy, Financial Services, Infrastructure, Airlines, Media, all these industries had a large influx of management talent to make it work for India. A number of these jobs were to develop domestic businesses and a few were to manage operations for delivery from India. The number of jobs created for expats were primarily focused around managing explosive growth in Indian domestic markets, or replicating global best practices to create new markets in India.  Most of the delivery based expat assignments were with large multi national firms which were setting up service delivery or operations in India and needed the ’inside person’ , ’subject matter expert’ to build the delivery capabilities. Most of the delivery expats were to captive operations with a few for third party vendors.

Fast forward 3 to 5 years and the marketplace is much different now. The number of expat requirement in India has slowed down. Part of the reason is the maturity and availability of the management talent in India and the reduction in premium someone is now willing to pay for an expat to move to India. That coupled with the fact that Indians who are in the US and other parts of the world are now more willing to move back to India either voluntarily  or involuntarily. There has also been growth over the last number of years in some key cities around India   to build an ecosystem to support global employees, although the challenges far outweigh the progress.

(EXPATS WHO GUIDE THE INDIAN FIRMS) 

Moving to a new location however temporary is always disrupting and moving to a location 8,000 miles away (6,356 straight line nautical miles to be exact – NY-Delhi) with cultural changes, new environment is highly disruptive. Specially if your move is part of an aggressive time frame for a tranformation project which by its very nature is chaotic, stressful and disruptive. Considering the people, time and cost impact of sending key resources to India for business development or setting up operations is never easy and has to be factored into part of any global operations.

Is a temporary assignment to India or any new location a reason enough to pay hardship allowance ? It depends but the answer is never black or white. The world is moving at a very fast pace and as the dynamics and mix of of workforce, clients  get distributed globally,expectation within organization that people will work at multiple locations within the organization is going to be more of a norm then an exception. Now the difference is that the locations a

Source: ChilliBreeze

re global vs limited to a country. Justifying hardship allowance may get tougher although the actual job of delivery from a global location does not going to get easier.

We would love to hear your experiences about your global journey, if you have been challenged ( Or had the opportunity) to be an expat. email us at info@corrystone.com to share your stories which we can share with our readers.

Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is a specialized globalization  firm providing advisory, training and staffing services to firms in  US and India. We work with  firms in the US  which are exploring low cost options for IT, Business Process work and  looking at ways to further optimize cost, manage operational risk and setup presence in India. Contact us at info@corrystone.com  to learn more about how we could make your journey more productive by leveraging our experience.

SOURCE: CIO
DATE: March 22nd, 2010

An interesting article in CIO magazine talks about challenges faced when firms are trying to ‘backshore’ or get the work back from offshore locations ,  in case of a failed offshoring relationship. The failure in offshoring partnership could be from a multitude of reasons but lack of readiness and planning on part of the client side is a big part of many of the failures , the article says.  Getting back work from offshoring locations back onshore is also not an easy task and in many cases the cost of doing that is far higher than what the firm might have envisioned on saving when they started with the initiatives. Proper planning, creation of right roadmap, expectations, client-vendor responsibilities and a realistic complete business benefit case are critical before you start out on the journey to offshoring. You should be clear about why you are doing it, what are your benefits, how long will it take and what are senior leadership expectations. A number of times where we have seen the initiative fail is a lack of proper set of expectations which are set at the onset of such initiatives. Also a number of times the true cost of what it will take is not all accounted for and the change management discipline required is alos undermined. 

If the numbers are to be believed in the article , close to 40% of the offshoring relationship don’t deliver ( which  means that 60% of them do and if that is true that is still a very high number) and mending such relationships by band aids just delays the inevitable.

So how do you plan for getting work back from offshore in case it does not work out ? There is no simple answer to that and the reasons for doing that also vary. Some do it because of lack of quality of service, others do it to mitigate the location risk ( would you want 70% of your staff to be in one location) and still others do it for political reasons.

What ever your reason, if you have not put plans during your initial project initiation stages, you have to sit back and have a roadmap with cost and timing on how you are going to do it and involve your vendor at the right stage in the process. Identify what risks are most critical to you, getting costs approved  ( aka higher budget) and another set of change management and disruption planning in place.

Here is the link to the article. What to look for when bringing offshore work back home

If you are having issues with your offshore vendors and are looking at your option, we can help you plan your roadmap and exit strategies if that is the best option for you.

Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is a specialized globalization  firm providing advisory, training and staffing services to firms in  US and India. We work with  firms in the US  which are exploring low cost options for IT, Business Process work and  looking at ways to further optimize cost and manage operational risk. For firms based in India  we help with marketing presence , M&A & client management services in the US. Contact us at info@corrystone.com  to learn more about how we could help you.

DATE: March 15th, 2010

Came across an article on Cognizant looking to go ‘three in a box’. Adding consulting services to their suite of offerings. Their currently trademarked (hmm..) ‘two in a box’ model talks about two areas of focus – customer and delivery.  Cognizant which has been solely focused on offering IT Services has benefited from their focus and grown at a higher pace relative to their peers. They have in the past tried to add BPO business line but never really succeeded.  Past year Cognizant did make a serious foray into BPO services and IT infrastructure services by acquiring UBS Captive in India. The CEO of Cognizant has reiterated in their earnings call that they are looking at BPO and IT infrastructure as a growth engine and will be focused on these services. Their sales team are realizing that getting deeper within existing clients is easier with newer offerings than acquiring new clients and these additional services give them those tools. Their 2009 performance was better than their peers and they are looking at ways to leverage the improving market conditions to offer additional services.

As part of their growth strategy, Cognizant is also looking to get into a service offering which has so far alluded Indian vendors who continue to build  strong delivery capabilities. Infosys was the first one to get into it and it is almost there for the last so many years, Other likes Satyam bought expertise by acquisiitons  while still other like TCS and Wipro have been shuffling management to build it organically. Yes, you got it right , it is the CONSULTING business. A seat at the table in the C-Suite besides the CIO. Onshore higher billing rate where customers get business transformation advice and not just low cost , commoditized offshoring option.  A number of BPO firms such as Genpact, WNS, pure play BPO players and who have access to  the CFO organizations more than the CIO organization have been trying the transformation, six sigma, process improvement consulting route.

Last 18 months, with the market crisis though  number of vendors retreating back into their core base of cost saving offerings  and building consulting businesses was on the backburner. The industry consultant like Accenture, Deloitte, IBM suffered a loss in consulting businesses as their outsourcing businesses were steady.

The reality with consulting services for India based vendors is that overall it still gets a poor grade when compared to the other offshore delivery based businesses they have been able to build over the past years.

On the other hand a number of the consulting organizations have been able to build delivery capabilities in par or better than the Indian vendors and have been able to extend their model from consulting to global delivery.

Why have Indian vendors failed to building consulting businesses ?

Here are some possible reasons why:

-  Building customer centric relationship, branding and winning mind share is harder to do relative to building delivery capabilities. Not to undermine the effort required to build a solid delivery capability organization. That is essential part of the execution. A number of the Indian vendors have been very focused on building delivery organizations.  

- Indian firms want it but not willing to let go. Indian firms are still very centralized organization operating from India. Vendors have  been un easy to let  go of the centralized control within India to a more decentralized model and change their customer interaction model to be truely effective.

- Once a low cost vendor  always a low cost  vendor. Initial perceptions are hard to change within organization. If a vendor has sold themselves as the best low cost provider, hard to sell the same up the chain now as a business transformation expert. Firms which have hired outside help to do so find that integrating that is a harder task than buying expertise.  If you walk like a duck, sound like a duck you are duck. You can wear a suit but now you are still a duck in a suit!

-  Limited influence of  Technology as business transformation leader. Despite all the progress in ‘CIO bill of rights’ within organization to move up the value chain,  there is still a  lack of influence technology organizations have in the overall company business decisioning process. So a CIO who may love his vendor and their delivery and ready to recommend it to the board has a tough time convincing the senior leadership that the vendor or their own organization can provide business transformation expertise (Is the CIO still considered running a cost center ?  Capgemini has an interesting take on this in one of their recent CIO studies).

Will Cognizant be more successful in doing so ? It will be interesting to see how that works out.  What Cognizant has been able to do better than their peers is building a more solid customer focused organization along with building their delivery capabilities. The go to model for Cognizant on how they balance their client partners which are owners of relationship with their customers and introducing Consulting Services which are primarily client facing and primarily onsite delivery teams have to be balanced to meet the customer needs. Given that Cognizant has typically worked with the CIO organizations, moving into other services such as BPO, consulting will require access and close interaction with CFO, COOs across the organization.

Picture Source: The Hindu

Cognizant has hired Mark Livingstone an ex-AT Kearney consultant, to take the initiative forward and reading what he is saying about how to make this work , looks like Cognizant is committed to make this work and ready to provide sponsorship.   Their timing might not be bad too with the recovery slowly taking shape.  If they can they deliver and continue their higher level of customer experience they have been able to provide with their existing model and keep that experience going they have a good shot at being the last to enter but first to make it work.

Question
If you are a company doing offshoring today would you consider using your offshore vendor to provide you business consulting services ? Reply to msharma@corrystone.com

Mohit Sharma is the CEO of Corrystone Global Partners. Corrystone is a specialized globalization  firm providing advisory, education and staffing services to firms in  US and India. We work with  firms in the US  which are exploring low cost options for IT, Business Process work and  looking at ways to further optimize cost and manage operational risk. For firms based in India  we help with marketing presence , M&A & client management services in the US. Contact us at info@corrystone.com  to learn more about how we could help you.

SOURCE: EconomicTimes
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