Thursday, July 06, 2006

Lessons Learned from Diamond Cluster Global Outsourcing Study:

In the qualitative portion of the research, DC asked Buyers and Providers to share their insights and experience with their peers. The following is a representative sample of their first-hand observations from the front lines of outsourcing.

• Outsourcing is always harder than you originally thought.
• Cost savings alone is not a good reason to outsource.
• Leverage resources with experience and skills in outsourcing to help you develop your own sourcing strategies and execution roadmaps.
• Clearly define your goals, measurement metrics and exit strategies up front.
• Well-defined governance structures and proactive management and communication are the keys to success.
• Structure your vendor relationships as win/win propositions.
• Outsourcing your problems won’t solve them. You should fix potential problems first before you hand over the process to someone else.
• Establishing very specific and measurable SLAs is crucial for evaluating performance.
• Give providers a chance to be successful. Transitions take time.
• Due diligence on providers is essential if you want to avoid surprises.
• Internal resistance to outsourcing can be managed but you have to foster proactive and candid communications to succeed.

• Successful outsourcing requires strong buyer commitment.
• Be prepared to talk to buyers in terms of business value.
• Buyers and providers need to be long-term partners.
• Buyers should recognize that providers need time to be effective. Bringing on an outsourcer can’t happen over night.
• Buyer expectations and objectives are always evolving. Make sure you understand them at the outset and are nimble enough to satisfy them when they change.
• Resistance to outsourcing and uncertainty about its value are still issues in many organizations.
• Contracts and negotiations need to be customized for each situation.
• It’s still difficult for outsourcing firms to differentiate themselves and cost is still very important to buyers.
• You’ve got to be able to work closely and communicate clearly with buyer management to be successful.
• Cultural differences need to be acknowledged and managed.
• Establishing a mutual understanding about governance structures, SLAs and performance expectations is critical.

Profile of the Participants:

DiamondCluster’s Global Outsourcing Study includes the insights of 210 buyers and 242 providers of outsourcing services.

All of the participants are either directly involved or highly aware of their company’s outsourcing-related decisions.

The number of total employees in the participating companies ranged from 100 to more than 50,000. The number of IT employees on staff ranged from less than 100 to more than 50,000. IT budgets of participating companies ranged from less than $5 million to more than $500 million. Buyers participating in the survey conduct business in the financial services, professional services, insurance, consumer products, retail, telecommunications and public sectors.

The providers participating in the study range in size from less than 100 to more than 10,000 employees. Many of the outsourcing providers had operations in multiple locations, including Brazil, Canada, China, Egypt, France, Germany, Hungary, India, Malaysia, the Netherlands,Romania, Russia, Spain, Ukraine, the United Kingdom, the United States, and Vietnam.

Source: DiamondCluster Research

Wednesday, July 05, 2006

Now, It is CEOs' Attrition in India

Several top-level executives in the frontline offshoring companies have quit in the last one year drawing attention to the attrition in this segment. The good news, however, is that the movements are within the industry, in almost all cases, proving that it is just some readjustment and not a cause for concern...

Raman Roy who had started Spectramind in 1999, that soon became the No 1 BPO company in India and was sold off by Roy to Wipro.
Now Mr.Roy's planning his new venture QuatrroBPO.

Rizwan Koita and Jagdish Moorjani, who started Transworks, which was later acquired by Indian business group, AV Birla. The two have already started a company focusing on the healthcare space.
(Called ‘1shore’, the new company will offer end-to-end healthcare services and also provide financial services. They are currently in talks with a couple of US firms to provide end-to-end healthcare BPO. Read the story here)

Prashant Sahni quit as CEO Tecnovate-eBooker to start something fresh.

The Other CEOs/country heads who have quit in the last few months include...

Rakesh Chopra, as head of Amex offshore operations to EXL services
Romi Malhotra, as head of StanChart's offshore operations to Dell offshore Ops
RK Rangan, as head of Prudential offshore operations to Lehman's offshore

Convergys has lost two country heads in the past 12 months with Jaswinder Ghumman and Rakesh Chopra leaving, for some BPO heads movement has become par for the course.
Mr Chopra has travelled from Genpact to American Express, EXL, Convergys and back to Genpact.(Meanwhile Dr. Bawa Singh is the interim Vice President and Country Manager of Convergys India Press release)

Sunil Mehta, vice-president, Nasscom, told EconomicTimes India:

The industry is growing at 38-40% annually. Considering the growth, senior level
movement is not surprising.

Need more?

Aparup Sengupta GTL-Mumbai
K R Viswanath - CEO Epicenter (Mumbai based Collections co.)
R Mohan - CEO of Hinduja TMTR Venkatesh Iyer - President, NIIT SmartServe

The following fellows have remained in this industry...

Sujit Baksi - President vCustomer India - joined Lehmen Brothers - quit- joined Tech Mahindra
Ravi Chandaran quit HP to head ANZ Grindlay’s back office
Kiran Shah - moved from Bank of America to join Goldman Sachs BPO
Ravi Bhatia quit World Bank BPO to join Genpact
Rakesh Kumar - President Global VantEdge ( joined IntelliRisk )
Anshuman Kankan - Head India Ops ePhinay (F&A BPO) (joined COLT Telecom India Offshore Center)
Shailaja Puranik - COO/Head India ops. Sitel ( Now COO Vertex India )

There are instances of top honchos in BPOs leaving to explore options in private equity. Sanjeev Agarwal leaving IBM Daksh for Helion Venture Partners and Akshay Bhargav leaving Progeon to join 3i are cases in point.

The good news, however, is that the movements are within the industry, in almost all cases, proving that it is just some readjustment and not a cause for concern.

I like the comment of Shyamanuja about this trend ...

... we blame the 20-somethings for changing jobs because they prefer the canteen
of XYZ to that of ABC... They are at least are clear about why they are doing

Source: Global Services, Convergys Corp, EconomicTimes, The Time Magazine, GoldmanSachs, McKinsey & Co Alumi, Managing Offshore