Managing Offshore IT

Dan Tynan's recent Infoworld article "Strategic IT talent: Offshoring is not the answer" makes for interesting reading. I don't say interesting only because of the "O" word in the title. The author begins by saying "As technology workers rail against the exporting of IT jobs to India, China, the Philippines, and beyond, their would-be bosses bemoan an ever-shrinking IT talent pool" and he is right on target.

However, I don’t agree with the assertion that "IT jobs that has been exported is relatively low.... Those jobs are mostly commodities: help desk, database administration, and some application development."

There is a lot more offshoring of higher-end services being sourced, a win-win strategy for both parties. In my book, I examined  typical IT work offshored that include:

• Re-engineering and maintenance
• Custom application development
• Validation Services
• Enterprise Architecture Definition
• System Integration
• Research & Development and innovation 

The last three are illustrative of how one can leverage talents of offshore teams to work towards strategic organizational/ IT goals. I have personally been involved in offshoring EA definition and sourcing R&D and innovation, and will be blogging more about this topic.

There are two sides of the coin: just as Offshore service providers are working hard to move up the value-chain, organizations that are sourcing work are also working to re-skill their employees to take on challenges of managing globalized teams. [I know the “value chain” term is highly misused but use it for lack of a better term...].  

Bottomline: I agree to disagree with some of Dan's points.

Posted by Mohan Babu K. at 12:56 PM | Permalink | Comments (0) | TrackBacks (0)

Here are my eclectic thoughts from the Smart Sourcing conference I attended this week.  I had an opportunity to network with the presenters and researchers and exchanged some really interesting “outsourcing jokes” with a few professors during the Friday afternoon’s lunch session. 

Of course it was not just jokes that were exchanged during the conference. Researchers brought some interesting perspectives…to write about all of them would perhaps involve writing a book.

It was a great experience interacting with academics who are studying the intricacies of sourcing and an assortment of practitioners from both the vendor and supplier side. As is to be expected in an academic conference, the presenters and audience switched roles during the few-dozen sessions over three days.  

The three keynote talks were interesting.

• Cyrill Eltschinger talked about his experiences in china which were interesting. Cyrill was gung-ho about the potential of Chinese IT, downplaying the communication challenges, language and cultural barriers. Well, he is the CEO of a company with the business model centering around leveraging Chinese talent, so it is to be expected, right? Though, I would have loved to hear more about his personal observations (and challenges) in moving to China.  
• Brad Listermann’s keynote address on his experiences working with offshore film team (in Bollywood) was skewed towards international business management than “offshoring” [Yes, some of these challenges also come into play in an offshoring context, especially when organizations work towards establishing joint venture and subsidiaries…but is less of a challenge while sourcing to vendors] . The promo clips Brad played during the session added sound and color to the presentation. 
• Suman Taneja succinctly summarized some of the “key” success factors driving outsourcing during his keynote address.

It was interesting to hear the viewpoints of entrepreneurial presenters (addressing the SME outsourcing market segment) Uditya (Omnispan), Prasad (Winsoft) and the representative from KMG

I attempted keep my presentation – the first one on Saturday morning – open-ended and interactive. I was introduced by Prof Hindupur Ramakrishna (who has also reviewed my book for the forthcoming issue of JITCAR Journal). I had abstracted the core theme of presentation from my book though the lively Q&A covered a wide spectrum of issues and challenges. Though I wasn’t speaking for Infosys at the conference (views were intended to be personal) my affiliation with the sourcing juggernaut probably weighted in. Some of the interesting questions included:

• The significance of Project Managers with a global overview in the success of offshoring projects. Based on my observations in the field and interactions with peers, one just cannot undermine this aspect. The right management layer, with managers skilled in the intricacies of sourcing is perhaps “THE” key success factor in ensuring that offshored projects and programs succeed. I have devoted two chapters on this very topic in my book. 
• Can the Offshoring Management Framework [OMF] be applied to smaller offshoring initiatives? Sure it can. However, the framework will have to be customized to the requirements of the specific relationship. Aspects such as Governance, and Communication Management are significant but can be performed by an individual or small team rather than a larger, formal group.
• If global travel is expensive and cumbersome -- visa and other issues factored – why are organizations not leveraging technologies to facilitate communication as much? Sure technologies are helping minimize the need for global travel but aren’t at a point where they can substitute for closer interactions, especially during the initiation and handover of  larger engagements. I have dealt extensively with aspects of leveraging tools and technologies in my book too.

[a few more that I will be adding to the list since I need to log-off now]

Ps: The team of professors won the outsourcing quiz bowl between industry practitioners and academics [to be expected, right?!]

Posted by Mohan Babu K. at 03:00 PM | Permalink | Comments (0) | TrackBacks (1)

Couple of interesting articles/blogs I was reading this weekend.

"How to Be an Outsourcing Virtuoso" written by Vinay Couto and Ashok Divakaran in Booz Allen Hamilton's strategy+business  magazine makes for interesting reading. The authors quote Ralph Szygenda, of GM stating “Most companies that are outsourcing for the first time don’t know how to approach it.”  This lack of widely accepted standards for outsourcing is an aspect that few are focusing on.

On a similar theme, S. Sadagopan makes some good points in his Sandhill Opinion column which are worth pondering over. He points out how “Lack of widely accepted standards for outsourcing may complicate the matters”

Typical dilemma in multi-vendor scenarios include whose Offshoring model to adopt [your model or mine?]. This can be especially nebulous when the sourcing organization does not have an offshoring framework of their own, and wishes to treat all vendors on equal footing [assuming the software service organizations have mature “Global Delivery Models” (GDM)

The bigger problem for the industry is that while it may be hard to formulate and enforce widely acceptable standards, sourcing organizations (and executives, managers and others) are beginning look beyond a vendor’s “GDM”

This is a sweet spot I have attempted to address in my recently published book “Offshoring IT Services,” where I have attempted to articulate a vendor-neutral “Offshoring Management Framework”

Posted by Mohan Babu K. at 04:00 PM | Permalink | Comments (0) | TrackBacks (0)

For practitioners of offshoring, external perspectives are important, and help thinking outside the box. While researching for my book, I took a conscious decision to reach out to people in the industry and academia, instead of focusing on ideation by internal Infosys “gurus” and thought leaders. Not that there was a dearth of them but just to help me get a broader perspective.

There are over a dozen people who agreed to be quoted, and gave me inputs and abstracts for inclusion in the book. The list includes Mark Kobayashi-Hillary, a British offshoring expert and author of  “Outsourcing to India: The Offshore Advantage” generously agreed to an interview which I adapted and included in the first section of my book that introduces the strategic perspective and “trends in offshore IT outsourcing.”

Interestingly, Mark who is also active in British Computer Society and a vocal proponent of offshoring – is editing a book “Building a Future with BRICs” that includes perspectives from industry leaders.

Closer home at Infosys, Jyoti, Mayank and Santhosh have authored an interesting paper “Overcoming Requirements Engineering Challenges: Lessons from Offshore” published in the recent IEEE Software Journal [September/October 2006]. The case studies used in the write-up add to the perspectives that appear in the special issue on Global Software Development.

Posted by Mohan Babu K. at 02:06 PM | Permalink | Comments (1) | TrackBacks (0)

In my pervious blog, I briefly talked about Enterprise 2.0 and offshoring. While analyzing this trend and implecations, we should perhaps take a step back and analyze some of the definitions of Enterprise 2.0
 
Professor Andrew McAfee, credited with coining the term Enterprise 2.0 in March 2006 [in an article in the spring 2006 issue of Sloan Management Review (SMR)]. In his blog, Prof. McAfee points to three broad and converging trends concerning the changing relationship between those who offer technologies and those who use them:

• Simple, Free Platforms for Self-Expression 
• Emergent Structures, Rather than Imposed Ones
• Order from Chaos

M.R. Rangaswami, from Sand Hill Group has a similar, but more inclusive definition that I particularly like (no points on guessing why!) .

MRR says….It (E2.0..) will be created using an infinite combination of the latest - and possibly, some old-fashioned - ingredients, including the following:

• Technologies - Open source, SOA/Web services (AJAX, RSS, blogs, wikis, tagging, social networking, and so on) Web 2.0, legacy and proprietary - or some combination
• Development Models - Relying on in-house, outsourced or offshore resources - or any combination; pursuing a global development strategy; and/or pursuing co-creation with users, partners or both
• Delivery Methods -Downloading individually; paying for a license; and/or, using on-demand/SaaS or via a service provider

Though I have my viewpoint on what Enterprise 2.0 should /could evolve into – more later -- I have been observing the debate between Sandhill consultants MRR, Vinni Mirchandani and Professor McAfee.

Leveraging technologies and trends – including tools of Web 2.0 --  to facilitate globally distributed teams of people to work towards common business goals is perhaps the key.  Now, one could get into a debate on whether the “business goal” is just about maximizing shareholder wealth?!

Posted by Mohan Babu K. at 02:20 PM | Permalink | Comments (0) | TrackBacks (1)

As technologist working with a large offshore services company, I get to consult with some of the most dynamic organizations, and ideate with some very smart folks. In the section on External Landscape and Offshoring Management of my book I had talked about the need to constantly scan the technology landscape. And the buzz right now is on "Enterprise 2.0" [a.k.a Web 2.0 ?].

I have blogged my Eclectic thoughts on the Enterprise 2.0 debate. Though the book was published about six months ago, before the buzz on moniker Enterprise 2.0 took hold, I elaborated on technologies including wikis, Knoweledge Management tools, blogs and how they facilitate collaboration between global teams.
 

If one were to study the definition of Enterprise 2.0 -- relying on outsourced or offshore resources and leveraging tools and technologies to bring Order from Chaos --  my colleagues at Infosys already live and practice Enterprise 2.0. And it is not just us; extending the argument, colleagues at many “tier 1” software services companies and offshoring vendors [IBM, Accenture, TCS, Wipro et al] extensively use many of the technologies behind E 2.0. Eat one’s cooking as the expression goes.

So, what’s new?!

Posted by Mohan Babu K. at 06:18 PM | Permalink | Comments (0) | TrackBacks (0)

I wrote about the challenges of managing logistics of global travel in my blog on Global Environment, Visas and Travel

Infosys , like many other Tier-1 software services companies have well-oiled machinery to handle logistics of visas, tickets and travel. Neither the employees, nor the managers have sufficient insight into intricacies of visas, travel advisories, restrictions and other nuances. The travel department / division play a very significant role in advising managers on getting the right travel documents, visas and in ensuring that the business critical requirements are fulfilled.

An aspect of such cross continental travel I did not touch upon was the travel costs. Don’t ask me who bears the cost of such travel. Certainly “business has to pay for it, right? [Which business, how much are all subjectivities we will not get into]

 Vinni, a deal consultant and blogger with whom I have interacted in the past points to interesting statistics of travel expenses and consulting and adds "Consultant travel continues to be a major add-on to fees." In the blog, he also points to statistics gathered by Brian Sommer which makes for interesting reading. The data quoted is that of a few American consulting companies and I wonder if the statistics would be any different if the survey were global.

Even a cursory straw poll of frequent air travelers would indicate how widespread travel by techies is. And a good percentage of the international travel would be by “foot soldiers” of software services companies traveling to client locations around the globe. This is a topic I have dealt with extensively in my book, including the case study on “Techies and Travel”  

With all the advancements in communication -- High-Speed networks, cheap VOIP, teleconferencing and video conferencing – face-time is still highly valued in business. Travel to client locations continues to be a “business necessarily.”

Posted by Mohan Babu K. at 12:59 PM | Permalink | Comments (0) | TrackBacks (0)

I regularly check the online landscape for news and views (nothing new, most of us do it right?). During a recent scan, I came across an interesting ZD Net article titled “Offshoring -- just another business tool?” that resonated with views on attempting to find the sweet spot where the interests of business and technology converge.

I couldn’t agree more with the author’s assertion that offshoring isn’t just about cost cutting “Certainly not the businesses which took the plunge into offshoring focused purely on cost-cutting. ....A July 2006 report from industry analyst Gartner, ‘Factors that influence the effectiveness and levels of offshore service’ revealed that such a narrow cost focus didn’t deliver the benefits that companies predicted.”

This is a topic I also explored in my book in the section `“Trends in Offshore IT Outsourcing.” The fact is that offshoring that began as a “low cost” tactic for staff supplementation by IT managers is morphing into a strategic option available to business planners and technologists. Most large software service companies and consultants have published “top 5” and “top 10” reasons for outsourcing but the key drivers include:
1. Limited Talent Pool
2. Cost Pressures
3. Innovate vs. Sustain

Of the three drivers, the innovate-versus-sustain dilemma [Figure] stands out because it is the least discussed. This a challenge managers face when reacting to innovations in the technical and business landscape; while they need to ensure that the limited resources and talent pool at their disposal manage and support the various Line of Business [LOB] applications, managers also need to ensure that innovations are leveraged to the extent possible. Offshoring is a key option available to take on the Innovate-versus-Sustain dilemma. By sourcing the non-core work to specialist vendors, IT managers and their teams can focus on innovations in their space and work towards capitalizing them. The cost benefit from sourcing accentuates this argument.

In a way, advantages of offshoring also drive towards cost-benefit argument.. Business activities are about making money. Cutting costs are definitely a driver in ensuring better ROI (Return on Investment) for the stakeholders (owners).

Posted by Mohan Babu K. at 12:31 PM | Permalink | Comments (1) | TrackBacks (0)