1. The Fear Factor in Remote Based Development
Eastern Foreign Cultures Satisfying Western Initiatives
Presenter:
Benaud Jacob
Feb 23, 2005
2. Geo Initiatives
IN THE NEWS
“The fear of failure can be debilitating
but the aroma of success can be tantalising
when the West meets the East.”
3. Geo Initiatives
IN THE NEWS
End of the Affair: Bringing Outsourced Operations Back In-house
(Computerworld – May, 2004)
“Many IT organizations decide for a variety of reasons that an outsourcing
arrangement just isn't working, and they pull those functions back inside.
There are a host of challenges, not the least of which is the likelihood that your
organization's knowledge base has probably eroded during the time the
function has been outsourced.”
4. Geo Initiatives
IN THE NEWS
Offshore Dilemma: What Stays?
(ComputerWorld – December 2003)
“Support for data center hardware, servers and mainframes will remain in the
U.S. for the following reasons: Hardware and software licensing costs aren’t
any cheaper overseas; real estate and data center construction costs can be
just as expensive overseas; loss of control of data is possible; it can be difficult
to switch from one offshore vendor to another.”
5. Geo Initiatives
IN THE NEWS
Barclays shows cost wins override outsource fears
(ComputerWeekly.com – Nick Huber, Tuesday 19, August 2003)
“The news that Barclays is considering outsourcing its application development
division illustrates how companies are now prepared to risk farming out even
the most vital areas of their IT departments in the push to cut costs.”
6. Geo Initiatives
IN THE NEWS
Outsourcing fears rattle U.K. government, businesses
(IDG News Service, January 26th 2004)
“Fear of China's and India's growing strengths as outsourcing and
development centers permeated the U.K. government's enterprise conference
in London, Monday, where top technology executives and government leaders
met to discuss strategies for developing more business at home”
7. Geo Initiatives
GEOINITIATIVES
The terminology “GeoInitiatives” has been introduced
throughout this presentation, to refer to all remote based
initiatives such as offshore, nearshore and inshore
business activities.
“GeoInitiatives” is defined as business initiatives in
strategic geographical locations that maximise
shareholder values.
“GeoInitiatives” use resources in strategic geographical
locations to develop a product or provide services that
results in cost effectiveness, operational efficiency and
profitability to the GeoInitiators
8. Geo Initiatives
FACTORS DRIVING GLOBAL CULTURES
TO WORK TOGETHER
TRUST & ETHICS
•Profitability
•Economies of scale
FINANCIAL REWARDS •Cross regional selling
•Domain Knowledge
•Domain Expertise
HUMAN INTELLECT •Innovation & Creativity
•Cross Regional Selling
•Global Standards
GLOBAL MARKETS •Global Presence
•Technology Media
•Enhanced Data and
TECHNOLOGY Information Security
•Common Language and
Terminologies
COMMUNICATION •Channels & Processes
•Aggressiveness
•Passiveness
PERSONALITY •Interpersonal Skills
•Professional
•Cultural
TOLERENCE / FLEXIBILITY •Personal
J&B Diagram – Factors Driving Global Cultures
9. Geo Initiatives
AN OFFSHORE DELIVERY PARADIGM
PLANNING PHASE TRANSITION MANAGEMENT
• Planning Risks • Adjust Team Roles
• Form Project Team • Define Transition Plans
• Train Project Team • Address Transition Issues / HR, Communications etc.
• Set Objectives and Goals • Meet with Employees, Organization and Vendors
• Align Offshore initiatives • Physical Move
• Evaluate Vendors
GOVERNANCE
COST/PERFORMANCE ANALYSIS • Adjust Management Styles
• Measure Activity Costs • Create Governance Council
• Evaluate Project Future Costs • Communicate, Communicate, Communicate
• Measure Current Performance • Define/Design Reporting, Meeting Agendas, Meeting
• Benchmark Cost/Performance Schedules, Performance Reports etc.
• Determine Specific Risks, Asset Values, Pricing • Measure Performance
Models and Goals • Confront Poor Performance Issues / Improvements
• Relationship Management
NEGOTIATING CONTRACTS
• Plan Negotiations
• Address High Level Issues and Deal Breakers
• Service Level Agreements
• Internal Communication Plans
• Contract Announcements
HOW DOES IT APPLY IN REAL LIFE?
J&B Diagram – Factors Driving Global Cultures
10. Geo Initiatives
CONCERNS REGARDING GEOINITIATIVES
DOES OFFSHORE OUTSOURCING REALLY REDUCE COSTS?
• INCEPTION COSTS
• FIXED COSTS – INFRASTRUCTURE
• LEARNING CURVE
COST • COSTS OF DELIVERABLES
• FLUCTUATING CURRENCY EXCHANGE RATES
• INCREASING OFFSHORE RESOURCE COSTS
DOES GOING OFFSHORE IMPACT YOUR PROJECT TIMELINESS?
•I NCEPTION PERIOD
• AVAILABILITY OF RIGHT CONSULTANTS AT THE RIGHT TIME?
TIME • ELAPSED TIME v.s ACTUAL TIME BILLING
• LEARNING CURVE
• RESPONSE TIME
• KNOWLEDGE TRANSFER
• INBOUND/OUTBOUND LOGISTICS
QUALITY, RELIABILITY AND EFFICIENCY?
QUALITY • QUALITY MEASURES TO ENSURE A RELIABLE PRODUCT
• OFFSHORE OUTSOURCING – STRATEGIC PARTNERSHIP?
• BUSINESS DELIVERY MODELS – DOES THAT WORK FOR ALL
BUSINESS TYPES? HOW ABOUT YOUR BUSINESS STRATEGIES?
• HUMAN CAPITAL – CAN THEY BE RETAINED LOCALLY AS WELL
AS OFFSHORE? HOW ARE THEY MOTIVATED?
• INTEGRITY / HONESTY – CAN OFFSHORE ENSURE YOU
TOTAL PEACE OF MIND WITH SENSITIVE BUSINESS INFO
J&B Diagram – Concerns Regarding GeoInitiatives
11. Geo Initiatives
PITFALLS TO BE AWARE OF
Financial setbacks
ILL Defined Processes
Inadequate Quality Standards
Operational Inefficiency
Incorrect caliber of workforce
Unethical standards
Global complexities
Technology breakdowns
Inadequate communication model
Passiveness and aggressiveness
J&B Diagram – Pitfalls to be aware of
Intolerance and lack of flexibility
Inadequate conflict management
12. Geo Initiatives
FEAR FACTORS
• Losing jobs to Foreign Countries
• Retaining Human Capital in the East
• Fear of the Unknown
• Fear of Failure
• Uncontrollable and Spiraling Project Costs
• Information Security
13. Geo Initiatives
FEAR OF ALL FEARS : The Dominant Fear
The fear of losing strategic control over the core teams, operations,
products, in-house talent and intellectual property
Losing jobs to Foreign Countries
Retaining Human Capital in the East
Fear of the Unknown
Fear of Failure
Uncontrollable and Spiraling Project Costs
Information Security
14. Geo Initiatives
HANDLING THE “FEAR FACTOR”
Create social awareness of “Job Facts”
Arrive at effective employee retaining strategies
Create awareness of offshore business models
Adequate planning and decision making
Realistic cost estimation
Create awareness of Information Security
15. Geo Initiatives
HANDLING THE “DOMINANT FEAR”
Understand
RESPECT Analyse
THE FEAR Address
Tolerance
BRIDGE Sustained Relationships
ALIGN
CULTURAL Ethical Standards
OBJECTIVES
GAP
Human Element
Geographical/Time Zone Constraints
TRUST Lifestyle / Personality
RELATIONSHIP
Political / Legal
THE KEY TO SUCCESSFUL Client Control
GEOINIATIVES IS Predictable Vendor Sustenance
RESPONDING TO THE DOMINANT FEAR Cost / Quality / Time / Objectives
