Outsourcing to India 2nd Edition By Mark - Final Part

Couple of Days back i completed reading Outsourcing to India 2nd Edition By Mark Kobayashi-Hillary.

Nice book written by Mark Kobayashi-Hillary.

I want to share few quotations i found from this book from the remaining pending chapters.

1) Chapter 11 Checklist

• NASSCOM must be the first port of call for anyone considering offshore work in India. The organisation has an excellent web site with a wealth of research material and specific advice can be obtained through contacting their team in New Delhi.

• The NOA in the UK also provides an excellent service to the outsourcing industry in general. The NOA works with many organisations that have an offshore presence in India and they have published extensive research
on the subject. Nigel Roxburgh and Adrian Quayle lead the NOA research drive and are both very approachable.

• Web Sites are valuable sources of research information, particularly where they act as forums for those already involved in outsourcing.

• Books are now being produced at a faster rate that just a couple of years ago. There is some valuable material being published, but as the number of outsourcing books increases be wary as they can't all be useful!

• Media is an excellent source of latest news. Who is doing what and where are the deals? The media usually provides a good summary of the major consulting reports as they are published.

•Government and Corporate Research is the most useful source of data if you need to establish basic infrastructure or industry detail. The NASSCOM website is a good portal to all the latest corporate research
and government decisions that affect the outsourcing business in India.

2) Chapter 13 Checklist

• Cost is not the only objective when outsourcing. There are many reasons for going down this road, including corporate strategy, quality improvement and flexibility.

• Objectives are not ambitions and should not be treated as such. The management may have hundreds of ambitions for the future outsourcing programme,but you need clear objectives with built-in targets.

• Creating a process to derive objectives is going to be essential. The workshop process helps to ensure all managers contribute to the creation of objectives and refines those that are on the table.

• Think of the negative outcomes that may occur if you achieve some of those initial ambitions. While basking in the glory of achieving the outsourcing programme objectives, you may have changed an unseen part of
the business.

• Be SMART when setting your objectives. Remember the acronym: Specific,Measurable, Achievable, Realistic and Time-Related.

3) Chapter 14 Checklist

• People attractiveness is the measure of how attractive the local people are and includes variables such as English language skills, workforce size and education.

• Location attractiveness is the measure of how attractive the location is and includes variables such as Government support and incentives for investment, telecommunications quality and ease of travel.

• Gartner research highlights India as the premier destination for offshore outsourcing now and several years into the future, based on both people and location attractiveness.

• China and the Philippines are the only major rivals to India; however both nations require several years to resolve language and infrastructure barriers to success.

• In terms of quality and overall outsourcing service without considering cost, Ireland is the strongest rival to India.

• More than 2 million graduates a year enter the labour market in India. In comparison, Ireland produces only 43,000 graduates each year. Nowhere else can match the levels of experience, credibility and intelligence found
in Indian companies because of this steady flow of university-educated talent.

4) Chapter 15 Checklist

• Process Mapping is the essential process of research where you map what you are doing against its criticality and decide on what can and cannot be outsourced.

• Tactical Outsourcing is short-term sourcing with immediate gain, such as employing an offshore team to build a new web site.

• Strategic Outsourcing is the use of outsourcing as a strategic business tool.

• Transformational Outsourcing is the strategic use of outsourcing where it creates a new business or transforms an existing one. Often the opportunity would not be possible without the outsourcing arrangement.

• Business Process Outsourcing is the management of an entire service by a vendor. Examples include call centres, airline ticket processing and research centres. The vendor owns the facilities and manages their own
employees to deliver the specified service. Managing business processes, rather than just technology adds value to the outsourcing relationship -Indian BPO is growing fast.

5) Chapter 16 Checklist

• Get the right people in the right place because you need that business knowledge in India somehow, whether they are your own employees or gurus supplied by the outsourcing company.

• Design your metrics for results because large offshoring projects often get weighed down by the process of managing the transition itself. You don't win any management awards for offshoring if the team can't deliver
what the old team were delivering. Keep focused on results and design the metrics to ensure this is what is being monitored.

• Design KPIs for the future because those performance measurements need to look beyond the transition. Think of what your customers expect, not the person managing the outsourcing programme.

• Build a great relationship with your new partner because they need to become as close to you as the former internal team. They need to be your partner, not just a vendor that is dealt with by the procurement department. Try that 'hands off approach and you can wave goodbye to success.

• Benchmark the service against others because even though your supplier is working with you to achieve mutual success, they are still part of a competitive marketplace. You need to work with the supplier to ensure
their service and price is comparable to other industry players.

6) Chapter 17 Checklist
• Vendor selection is always critical. This is going to be your key partner for this service so you need to ensure the right company is chosen. Remember, every outsourced process is an important process.

• Research and market intelligence is essential prior to the RFI, so you are aware of the players in the market, but also during an outsourcing relationship. It pays to be aware of what your supplier is doing elsewhere.

• The RFI is the initial request for information from prospective suppliers. It contains enough information about the proposed project for them to express an interest, without requiring any level of detail.

• Non-Disclosure Agreements should be signed by client and vendor so the negotiation can be open and transparent.

•A site visit is essential when setting up an offshore outsourcing agreement with an Indian company. Your executives must visit India to see the facilities in person if they are expected to support the project.

•A reference visit is not always used or required, but it can be a useful method of experiencing the relationship you are about to enter. Most suppliers will allow you to meet their existing clients.

•The RFP needs to provide as much information as possible to the potential suppliers, allowing them to provide the best quality proposal.

•Due Diligence is the process of allowing the service provider to review the environment they are about to take responsibility for. The similar process of examining your own systems and processes prior to outsourcing
is called 'discovery'.

• Negotiation is the final hurdle, where you can compare just two vendors who meet all your criteria. Now you can focus on the best price and performance blend.

•Compare like for like when studying vendors. Existing vendors or internal processes may seem worse than they really are.

•Get involved in the evaluation process. Don't let the hired consultants do all the work because once they leave you will be required to manage the relationship.

•Transition and ongoing evaluation must be considered and planned before you sign the contract as they will take far longer to agree once the service is already outsourced.

7) Chapter 18 Checklist

• Contracts can change so ensure you define a protocol for changing the contract during its life.

• Do not seek to punish - look for joint opportunities where gain sharing can be applied to create a win-win contract.

• Pricing is not simple, but look for ways to ensure the pricing model also helps to encourage efficiencies from both parties

• Exit strategies are often overlooked, but all contracts have an end-date and the termination or renewal process must be planned from initiation to avoid dispute.

Get local counsel in India before drafting or signing any contract. The local knowledge will prove extremely valuable.

• Cross-border information transfers can be tricky in some industries, so ensure you are aware of the legal position regarding the outsourcing of your sensitive data.

• Data Protection and the management of Intellectual Property must be carefully analysed as local regulations in India can override 'standard' contracts. Make sure you know who owns your intellectual capital.

• Human Resources are the greatest asset any company has. During the contract creation phase, you must ensure the right people are around to manage the process and future scenarios, such as contract termination,
are planned for.

• Tax can surprise the client as unexpected sales tax and custom fees create a marked increase in the expected service price

8) Chapter 19 Checklist

• ISO is the International Organisation for Standardisation, based in Switzerland. Their ISO9000 series of process guidelines form the basis of quality standards for thousands of organisation across many industries.

• The CMM standard offers a benchmark for the process quality of technology companies and more recently, how those same companies manage their employees. All the major Indian technology firms have achieved the
gold standard of CMM Level 5.

• Six Sigma is a set of tools and philosophy of continuous improvement,based on the Japanese kaizen and Total Quality Management concepts.Wipro is a leader in the use of Six Sigma quality management.

• COPC is an organisation that promotes call centre quality management.The various COPC standards are being used by call centre organisations throughout the world to define service quality. Most of the Indian BPO
players have achieved COPC certification.

• The SLA is the document that defines the expected minimum levels of service availability and quality. It is defined with the legal contract, but is more of a working document that can be referred to frequently and
changed, if needed.

• The KPIs are the indicators that are used to measure service quality for the SLA. The SLA will include a number of key indicators that are regularly measured and reported on. These indicators provide the client and
supplier with information on the current state of the relationship.

9) Chapter 20 Checklist

• Feasibility analysis is an essential process and should clearly determine not only what processes need to be transferred to the offshore destination, but how complex they are and in which order the phases should run.

• Project planning is critical before and during the migration. The project manager will establish key milestones for every process, allowing progress to be tracked using agreed meetings and reports.

• Post Migration Review is a useful process for both the client and outsourcing supplier as it allows the client to understand the entire process from start to finish and the supplier to learn and improve their service for the next client

• Knowledge transfer is particularly important in offshore outsourcing, as it is unlikely that any existing team members will join the new team. There are a number of inter-linked key processes that can make this work.

10) Chapter 21 Checklist

• Training in cultural awareness and communication should be considered for those who need to manage or work with cross-cultural teams. It is an investment in the future stability of a team because communication is
even more vital than usual when a team is offshore.

• Group loyalty is important in India, whether it is to a company, family or particular trade. Individual eccentricity is rare.

• Women exist in a complex duality where they are increasingly well represented by political parties yet they remain subservient to men at home.

• Britain has many cultural connections with India and this can be a comfort to British managers visiting India. However the shared cultural reference points do not automatically lead to perfect communication and understanding.

• Hierarchy is important to Indian managers. The concept of 'face' restricts subordinates from correcting their boss and you may often witness managers 'sending a stinker' to their subordinates, reinforcing their position of authority.

• English is spoken throughout India as the language of education and business. There are more English speakers in India than in England itself. It is worth becoming familiar with some of the terms particular to Indian English through conversation or the Indian press.

• Negotiation is a tricky process than can leave you closer to a miserable solo than a beautiful pas de deux. Indians love business negotiation, but they are offended by arrogance and conceit - especially if conducted in
the condescending manner of an ex-Colonial. If you conduct a gentle bargaining process with patience and avoiding the constant Asian fear of losing face then you will succeed, but always be wary of any promise that
is too good to be true. It is.

• Awareness of political leaders, basic geography and patience with the process will pay off.

• Jokes are best avoided, unless they are at your own expense.

11) Chapter 22 Checklist

• Corporate strategy may have led you to outsourcing, but don't forget the drivers that are important to your company; a focus on core competencies, release resources for value-add, reduce cost, increase quality. Remember the main reasons for entering the outsourcing programme and target these benefits when restructuring.

• Checks and balances will probably be needed in a new structure to prevent a situation where the outsourcing vendor owns all your valuable domain knowledge.

• Fix broken processes before you try to outsource them. Going to a vendor won't help if the processes are already broken and could make the situation far worse.

• Vendor Management is often overlooked. It is a distinct competence that you need to develop or hire in to the new team. If possible create a new team to just focus on maintaining the outsourcing contract and vendor relationship.

• Talent Management is an interesting side-effect of outsourcing lower value work outside the organisation. You need to start thinking more about career paths and training when, by definition, the people in your
organisation are only focused on high-value tasks.

• Remember the stakeholders are not limited to the senior executives of the host firm and outsourcing vendor. IT staff, end users, account managers and executives may all have different agendas for the same outsourcing
process so it pays to think carefully about what different people expect.

• Transition expectations can often be unrealistic, with many users expecting an overnight success. Keep the people informed of progress and plan a transition process they can understand.

12) Chapter 23 Checklist

• Preparation is a critical part of the transition and redundancy process. Even though you are dealing with people, it is possible to predict and map the resistance and acceptance of a major organisational change -
even where redundancy is involved. Communication is the key. Most managers assume that once a message is broadcast, it is also understood, but this type of assumption can be catastrophic for an outsourcing programme.

• Honesty really is the best policy. It maintains the credibility of the management to an external and internal audience as well as helping to start the transition process earlier than it could be if planning was covered up.

• Planning is often overlooked. Don't assume a team manager can deal with a major outsourcing project. Get a programme manager who has been there, done it and is not a personal friend of the team facing redundancy
or transition.

• Ensure your media and PR team is fully briefed. All information must be from the same source and delivered as soon as possible to prevent leaks and rumours.

13) Chapter 24 Checklist

• This entire book is focused on the potential benefit of outsourcing to India,yet such a dramatic change to your business does come with a commensurate level of risk. You can minimise this risk by being aware of the
major areas where companies that go offshore have stumbled in the past.

• Search costs are created by not knowing what to do and not having a clear map of where to go and how to get there. This is the cost of not understanding what you want to achieve from outsourcing.

• Metrics need to be handled carefully. It is critical that you measure offshore services, yet too many companies cannot measure effectively.

• Change in your company is more disruptive than any outsourcing programme. This is just a single step along the road to getting the company that you want.

• Culture must be taken seriously when you utilise an offshore location. It should be possible to determine a measurable gain in efficiency if the teams are more culturally aligned.

• Handle the PR internally and externally with professionalism. It is easy to blunder and the press is always looking for a story.

• Data protection and intellectual property rights are respected in different ways around the world. In some places these values are not respected at all and this is a major consideration for where your important data is going to be processed.

• Infrastructure must be up to the job, including physical infrastructure and packages the government can offer.

14) Chapter 25 Checklist

• There are several forces driving outsourcing to India forward, including the shift to a global business model.

• Many forces are restraining the development of offshore outsourcing and the equilibrium between drivers and restraints can be modelled using a force-field diagram.

• Protectionism is declining in general. Companies and the media are starting to see offshore outsourcing as part of the global business model for the twenty-first century.

• Indian firms are improving their onsite services, so you will see more of their team locally.

• IT and BPO services appear to be converging.

• Cost reduction remains the key reason for offshoring, but value enhancement is becoming more important day by day.

• SMEs are demanding a place at the table. They want vendor services for smaller players.

• Complexity is increasing as more value services are offered from India.

About the Author

Mark is Global Research Director at Commonwealth Business Council Technologies in London. CBC Technologies leverages on the extensive government network of the Commonwealth Business Council, creating a three-way bridge between government, buyers of outsourced IT and ITES services and the vendor community. The development target for CBC Technologies is to promote global trade and investment for shared prosperity. Mark is also a non-executive director of fx Auctions pic and he contributes regularly to the media debate on offshoring,
with recently published articles in journals including the Financial Times, Computing,and The Association of Computing Machinery.

Mark is researching a new book with co-author Mahesh Ramachandran, Chair of the India Business Forum at London Business School. Titled 'Beyond BPO' this research analyses the development of business process outsourcing as a 'business as usual' strategy. Mark contributed a chapter on the future of offshoring to Technology
and Offshore Outsourcing Strategies (Palgrave 2005) and he is editing a collection of essays analysing how offshoring can impact developing nations.

Mark is a founder member of the British Computer Society working party on offshore outsourcing, which published a major study in November 2004. Mark is a Chartered Information Technology Professional (CITP) and Master of Business Administration (MBA), studying at the University of Liverpool. Mark is a visiting lecturer on International Management at London South Bank University.

Mark lives in London with his wife Nobumi and Staffordshire bull terrier,Matilda. He enjoys the theatre, cinema, ballet, the novels of George Orwell, listening to (loud) live music and battling the London traffic on a bicycle.

www.markhillary.com
www.outsourcingtoindia.net
www.bcs.org.uk
www.beyondbpo.com
www.cbctechnologies.com
www.lsbu.ac.uk
www.fxauctions. com
www.springeronline .com

Please take the time to visit these websites and offer your personal help to India:

National Literary Mission India - www.nlm.nic.in
Sankara Eye Hospital - www.giftofvision.org
Child Relief and You - www.cry.org
UN programme on HIV/AIDS - www.unaids.org