David Guest, CTO, Specsavers spoke at the CIO Event (dot) com

1. David Guest
Do Offshore Managed Services
Really Work?

2. Objectives and Agenda
• Background Experience
• Provide Some Real Examples and Data
• Debate:
– What can we use a Managed Service for?
– What has worked well for other people?
– What should people look for from their suppliers?
– Is there still a place for T&M contracts?

3. Over the past 10 years I have used off-shore extensively:
• 2000 - 2006 T&M
– Offshore (O/S) development and support using very large GE programme
– Largely staff augmentation/body shopping
• 2006 - 20010
– Developed O/S programme (now 500+ FTE and growing)
– Introduced Managed Services for Core Support
• 2010 - 2012
– Developed O/S programme (now 250+ FTE and growing)
– O/S Managed Services for Support and Testing
Managed
– Capacity Service for development
Services

4. Managed Services
‘Managed services is the practice of outsourcing management responsibilities as
a strategic method for improving operations’
We have the following managed services:
• 2/3 Line Application Support (Delhi and Bangalore)
– Accenture – Retail and Supply Chain 100+ FTE
– JKT Central and Group Systems
• Independent Testing – SQS (Pune)
– System Testing – test creation and execution 70 FTE
– Regression test automation creation and execution
• And .... We have Store Break Fix – Fujitsu
– All UK based

5. Managed Services Implementation
• Common Complaints
– ‘Its harder in India than doing it on-shore’
– ‘We will have to transfer the knowledge’
– ‘Its not as productive as doing it in the UK’
– ‘Its expensive during transition’
– ‘We’ll lose the IP’
• But if done properly
– They can be transformational from a service and cost perspective

6. Managed Services Benefits
• Unit Cost Reduction
– Unit cost saving for support and testing of 40%
– Effective rates have dropped by over 33% since we moved to managed services
– Domestic contractor usage has dropped to zero in these areas
– This is a multi-million pound saving and its increasing
• Service Improvements
– Testing coverage has increased by 30%, automation is up to 80% on our retail systems and productivity has increased by
20%
– Incident volumes and active problems have reduced across all application portfolios by 20 - 40%
– Regular release cycles have been introduced for problem fixes and small changes
– System availability has improved dramatically and most systems are within SLAs
• Intangible
– IP is better protected
– Improved documentation and rigour
– Permanent staff have been freed up and have better career prospects
– Best practices & disciplines from our suppliers

7. What Makes the Difference?
• Incentivising our teams to accept Managed Services – financially, professionally and emotionally
• Incentivising our partners to improve service and reduce costs – risk reward contracts
• Accepting that we would manage the contract and they would manage the service – we have good
contracts
• Trusting our partners and stopping our teams from interfering – we choose our partners carefully
• Building relationships at the highest levels and visiting the teams in India regularly – we have no travel
restrictions and everyone flies business
• Commercially we keep our options open – we are multi vendor and they all know it

8. • Discussion topics
– Have other people had similar experiences?
– What has worked well for other people?
– What can we use managed services for?
– What should one expect from suppliers?
– Is there still a place for T&M?