The 2009 European Outsourcing Summit                        The 2009 European Outsourcing Summit         15-16 October, 20...
The 2009 European Outsourcing Summit                                    The 2009 European Outsourcing Summit              ...
The 2009 European Outsourcing Summit                                    The 2009 European Outsourcing Summit              ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                       The 2009 European Outsourcing Summit           ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                    The 2009 European Outsourcing Summit              ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                The 2009 European Outsourcing Summit                 1...
The 2009 European Outsourcing Summit                                 The 2009 European Outsourcing Summit                 ...
The 2009 European Outsourcing Summit                                   The 2009 European Outsourcing Summit               ...
The 2009 European Outsourcing Summit                                   The 2009 European Outsourcing Summit               ...
The 2009 European Outsourcing Summit                                 The 2009 European Outsourcing Summit                 ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                 The 2009 European Outsourcing Summit                 ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                    The 2009 European Outsourcing Summit              ...
The 2009 European Outsourcing Summit                                 The 2009 European Outsourcing Summit                 ...
The 2009 European Outsourcing Summit                                 The 2009 European Outsourcing Summit                 ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                    The 2009 European Outsourcing Summit              ...
The 2009 European Outsourcing Summit                                     The 2009 European Outsourcing Summit             ...
The 2009 European Outsourcing Summit                                    The 2009 European Outsourcing Summit              ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                    The 2009 European Outsourcing Summit              ...
The 2009 European Outsourcing Summit                                    The 2009 European Outsourcing Summit              ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                  The 2009 European Outsourcing Summit                ...
The 2009 European Outsourcing Summit                                 The 2009 European Outsourcing Summit                 ...
The 2009 European Outsourcing Summit                                 The 2009 European Outsourcing Summit                 ...
The 2009 European Outsourcing Summit               The 2009 European Outsourcing Summit15-16 October, 2009  Copenhagen Ma...
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SimCorp sourcing "From Local to Global"

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Presentation give on The 2009 European Outsourcing Summit in Copenhagen by Jens Brinksten

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SimCorp sourcing "From Local to Global"

  1. 1. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, Denmark The Challenge fromLocal to Global Development By Jens Brinksten, CEO SimCorp Ukraine LLC © 2009 IAOP® All Rights Reserved
  2. 2. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkAgenda Setting the scene The phases  First investigation and milestone  Second investigation and milestone  Pilot project phase and third milestone  Partner phase and fourth milestone  SimCorp Ukraine LLC Overall lesson learned and conclusions Q&A © 2009 IAOP® All Rights Reserved
  3. 3. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSetting the scene…My name is Jens Brinksten,  I hold an MBA and HD-R from CBS  I am currently CEO of SimCorp Ukraine LLC  I have been CEO of Ernst & Young in Uzbekistan, Director of KPMS’s Consultancy & Financial Advisory Service in Central Asia and Director of EBRD’s Post- privatisation Fund in Uzbekistan.  I founded the outsourcing firm TechOutSys and have worked for a number of big Danish companies in outsourcing questions, such as SimCorp A/S  During the past 19 years I have worked in more than 20 countries and started up operational companies and operations in 15 countries  I have worked with privatisation and globalisation since year 1990  I have lived outside Denmark more that 10 years, mainly in East Europe and Central Asia  I sit on Advisory Board for Centre for Strategic Management and Globalisation at CBS © 2009 IAOP® All Rights Reserved
  4. 4. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSetting the scene…Who are we in SimCorp? SimCorp develops and globally markets the investment management system, SimCorp Dimension. Our product helps customers perform the many tasks needed to stay ahead in todays international financial markets. The SimCorp product, SimCorp Dimension, meets the markets need for an advanced system, which can exploit new technology and handle complex transactions on a global scale. Since the customers, driven by the need for continual efficiency gains, increasingly demand integrated and flexible solutions, SimCorps product is positioned to exploit the growing market potential. We are currently present in 16 countries and have around 1.100 employees Worldwide, of which 120 are in Kiev. © 2009 IAOP® All Rights Reserved
  5. 5. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSetting the scene…History Founded in 1971 SimCorp has almost 40 years of experience developing solutions for the financial industry. Headquartered in Denmark with several international subsidiaries, SimCorp is listed on NASDAQ OMX Copenhagen A/S and continues to create value for its customers, shareholders and employees alike.Customers Our customers include financial institutions, asset managers, insurance companies, pension funds, mutual funds, banks and mortgage lenders and they all rely on our ability to constantly be on the cutting edge of the financial industry. © 2009 IAOP® All Rights Reserved
  6. 6. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSetting the scene…The timeline which we will go through today... 2001/02 2004/05 2001/02 First investigation Second First milestone phase investigation phase 2005 2005 2005 Third milestone Pilot project phase Second milestone 2007/08 2005/07 2007 SimCorp Ukraine Partner phase Fourth milestone LLC and ongoing… © 2009 IAOP® All Rights Reserved
  7. 7. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkFirst investigation phase – 2001/02Motive The major motive was to investigate the possibilities in outsourcing, both external (potential partners) and internal (was SimCorp ready to outsource), because the market in Denmark for qualified software engineers became tighter, and SimCorp needed people for realizing the company’s growth strategy.Aim Set up demands and try to investigate if there were potential partners, who lived up to the expectations of SimCorp. To test if SimCorp internally would be able to handle and cooperate with a foreign partner in regard to product development. © 2009 IAOP® All Rights Reserved
  8. 8. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkFirst investigation phase – 2001/02Preparation Preparation of requirements to a partner profile and other external conditions  Profile (solid firm, references, price level, experience with firms similar to SimCorp)  Staff (English proficiency, communication skills in general, educational level, etc.)  Managerial competencies (both top management and middle management)  Security (person, access, data and data connection)  Logistic and infrastructure  Stability (country and politics)  If possible, knowledge of the programming language APL (very specialized development language for financial application) © 2009 IAOP® All Rights Reserved
  9. 9. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkFirst milestone - 2002Execution SimCorp’s visit to St. Petersburg, Russia – the biggest IT cluster in a 2-3 hours flight distance from Denmark – together with a governmentally supported project, MindMatch (near-shore was a pre-request) There were discussions with the Russian IT industry organizations and representatives from a number of companies Additionally, there were arranged 5 “face to face” meetings and visits to different potential partners in St. Petersburg during the visits. © 2009 IAOP® All Rights Reserved
  10. 10. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkFirst milestone - 2002Conclusion After visiting St. Petersburg it was concluded that despite several of companies lived up to a number of set criteria, no one was obviously ready to a cooperation with a company like SimCorp. Internally in SimCorp, it also gave a lot of resistance. People were very skeptical regarding outsourcing and the possibilities for using outsourcing in SimCorp, because of “their” highly specialized product. So at that time, SimCorp neither could find any suitable partners nor was internally ready for an outsourcing “adventure”… The outsourcing idea was put back on the shelf… © 2009 IAOP® All Rights Reserved
  11. 11. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkFirst milestone - 2002Lesson learned First “sell” the idea internally, before going out and investigating, because if employees are not involved, then they react negatively and against the idea… Get the top management to support the idea strategically, so people understand it will become a vital part of the company’s strategy… Have a clear vision of the long-term strategy for outsourcing, so that you can set up an overall plan and guideline for the project, including exit strategy, etc. Be ready to say NO… and turn down the project © 2009 IAOP® All Rights Reserved
  12. 12. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSecond investigation phase – 2004/05Motive After a couple of years, it became obvious for SimCorp, that the company needed external resources, because it became very difficult to find and hire qualified people in Denmark.Aim SimCorp hired a small consultancy firm, specializing in IT offshore outsourcing, to perform a qualified investigation, and through these findings establish a knowledge basis for making final decision of, whether SimCorp should try out outsourcing as a business model for expanding development capacity. © 2009 IAOP® All Rights Reserved
  13. 13. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSecond investigation phase – 2004/05Preparation Similar to the first investigation, but this time Near-shore also with focus on long term availability of region resources (universities, etc.) Investigation of more countries (geopolitical Countries investigation, cultural evaluation, etc.), so a more comprehensive evaluation could be done for overall conclusions Cities/ Focus on infrastructure and security clusters Internal readiness in SimCorp was ensured through information meetings and establishment Firms of focus groups © 2009 IAOP® All Rights Reserved
  14. 14. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSecond investigation phase – 2004/05Execution Country investigation Russia/Bulgaria  Visit to and investigation of 4 countries, Ukraine/Lithuania which were selected based on a set of criteria, put forward by a steering committee  An overall “ideal” country profile was prepared for evaluation Lithuania/  2 countries were selected for closer Ukraine assessment (Lithuania and Ukraine).  Ukraine got priority, because of better long- term conditions i.e. availability of technical universities and national mentality (pro- West) UKRAINE © 2009 IAOP® All Rights Reserved
  15. 15. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSecond investigation phase – 2004/05Execution Potential partner investigation  Visit to Ukraine, and selection of 8 potential 8 firms vendors  Preparing an overall partner profile  Special requirements regarding knowledge and willingness to special education (APL and financial 3 firms understanding, incl. high level of English)  Selection of 3 vendors for Due Diligence. Two were selected and presented for a MoU. One vendor withdrew, and one vendor accepted 1+1 starting up a pilot-project firm  One more firm was selected as a second test firm for a pilot and accepted the MoU © 2009 IAOP® All Rights Reserved
  16. 16. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSecond milestone - 2005Conclusion It is very important to evaluate the potential country with the long term prospective in mind In regard to potential partners, you should NOT go on compromises with your demands (have a good gut feeling…) One should set up very clear terms to the potential partners and the cooperation agreement, including expected future contractual terms for the entire intended cooperation process, in first hand develop a MoU for the pilot period SimCorp spoke with managers, but also interviewed team leaders and business analysts from the potential partner firms, so SimCorp got an better idea of the competence level during the Due Diligence process © 2009 IAOP® All Rights Reserved
  17. 17. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSecond milestone - 2005Conclusion Focus areas (all parts of a MoU)  Pre-conditions to the partner and the employees involved in the start up phase, including cost- and risk-sharing, which gives motivation…  How do we end this fast and easy for both parties, if the pilot does not work out as expected  Conditions in connection to running the operation, incl. staff specification, staff turn-over, educational level, special expected training, costs sharing for training, roles and responsibilities, etc.  Exit conditions and future growth opportunities  SimCorp was here looking for JV possibilities, both as a potential umbrella for a bigger setup, but also as a “carrot” for the partners Internally, SimCorp management considered the possibility to establish an own setup in the longer perspective… © 2009 IAOP® All Rights Reserved
  18. 18. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkPilot project phase – 2005Start-up of pilot project There are hired staff to the project and they are checked by SimCorp and several are replaced (if more then 20% are rejected or replaced, then the partner should cover the costs for replacements) The first training takes place in SimCorp’s premises in Copenhagen Secure Citrix connection is established and SimCorp gets own secure rooms at the partners’ premises Overall communication is tested and started up, so management in SimCorp can follow the pilot project Pilot plan is set up together with key milestones and objectives © 2009 IAOP® All Rights Reserved
  19. 19. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkPilot project phase – 2005Lesson learned You need to be very clear in your wishes and demands in the MoU Get everything in a written form (MoU) Think through the whole process from start to end, so the contract between you and your partner foresees all potential scenarios (contingencies) in the cooperation process Be ready to close the project (milestones), if it does not work out! Keep your internal organization informed about every step in the process, so they understand the expected steps Establish a steering group with participants from all internally involved parties. Appoint a Project Manager for being overall responsible for the project… Have a clear mind about the next steps… © 2009 IAOP® All Rights Reserved
  20. 20. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkThird milestone - 2005 The pilot projects are finished with satisfactory results, and it is decided to continue full-scale cooperation with both pilot companies The resources in the project will be incorporated in the overall development strategy of SimCorp, which requires much more training and knowledge transfer about SimCorp and SimCorp Dimension. A contract (Cooperation Agreement) is signed, with focus on a long term relationship (based on the MoU), but covers areas such as:  Selection of all staff  Training, staff development, special APL and financial training, etc.  Organizational setup, so it fit into the SimCorp organization  Security of premises  Equipment, etc.  Bonus, salaries, benefits, promotions, etc. © 2009 IAOP® All Rights Reserved
  21. 21. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkPartner phase – 2005 SimCorp expatriates a full-time Project Manager to Kiev SimCorp starts up an educational program for the outsourcing staff (SimCorp Academy), which covers deep financial knowledge and technical knowledge used in SimCorp Dimension Measurement of productivity is started, so the resources can be compared to all other SimCorp staff Two more full-time employees are expatriated to Kiev, as trainers and coaches The offshoring development capacity is gradually increased to around 45 to 50 people (both developers and testers) English training is intensified, for better communication Involvement of as much Danish staff as possible on all levels, for getting more acceptance in the organization © 2009 IAOP® All Rights Reserved
  22. 22. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkPartner phase – 2005/07Conclusion The training and development of the staff goes well and the knowledge and skills level increases The productivity increases But Ukrainian staff are very young and inexperienced, both professionally and personally, so the maturity sometimes does not follow the norms in SimCorp SimCorp invests app. € 20.000 in each employee during the first 18 months in training, development competences and knowledge sharing (travels, courses, training, etc.), which all is needed for being a part of the development organization in SimCorp The project can be evaluated as a “success story” for SimCorp, even that there is still some resistance in the home organization © 2009 IAOP® All Rights Reserved
  23. 23. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkPartner phase – 2005/07Lesson learned Project Management needs involvement of senior employees, because by sending inexperienced staff with such a mission neither will earn respect of partners nor that of home employees… Offshore outsourcing is not cheap, requires a lot of resources, both in terms of investments and hours from internal staff… A lot of training and effective knowledge-sharing is a key to success with a complex product as SimCorp’s Again contracts (Cooperation Agreement) are the key to success! Communication on all levels is a crucial element of the overall success, because this is the only way everybody learns to accept each other as persons and professionals © 2009 IAOP® All Rights Reserved
  24. 24. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkFourth milestone - 2007 The setup in Kiev reaches a critical mass level, where it becomes strong enough to be integrated in the full development cycle in SimCorp, but there are some constraints:  If developers should work with client data, they need to be fulltime employees of SimCorp according to client contracts.  It is the aim to give all people who work for SimCorp the same basic working conditions and benefits…  With other words… How to secure SimCorp’s investment in people and knowledge and still promote and develop the setup in Kiev? According to the existing contracts SimCorp consider the opportunity to establish JV with the existing partners  Would it be possible to retain existing staff?  Would it be possible to move around on Kiev staff, if it is not a 100% owned company?  Contractual obligations to clients, etc. © 2009 IAOP® All Rights Reserved
  25. 25. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkFourth milestone - 2007 With all the question marks in mind, and the wish to “run” the operations on 100%, it is decided to establish a wholly owned subsidiary in Kiev  Because it is not considered to be sufficient enough to cover security clauses regarding client data in SimCorp client contracts, if it is not a 100% owned subsidiary  It will be easier to make decisions and form the offshoring development capacity as an integrated SimCorp company  It will be easier to implement all normal SimCorp staff benefits in a 100% owned subsidiary  Retention of staff would hopefully become easier, and the acceptance of Ukraine staff in the total organization should be improved Finally, this is a decision, which is made because of positive results and experiences! © 2009 IAOP® All Rights Reserved
  26. 26. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSimCorp Ukraine LLC – 2007/08Transfer of staff SimCorp starts up the negotiations regarding moving existing partner employees into a SimCorp owned company…  SimCorp divided the employees into two groups, A) Senior important people with key knowledge and skills, B) Other qualified people  The negotiations are, of course, focused on the lost revenue for the partners, and here it is agreed to have a transition period of 18 months, which means the employees will stay as consultants in 18 months, where SimCorp would pay for them as for partner employees  The above mentioned 18 months period is also considered as a trial period for all B-employees. A-employees are “taken over” already from the establishment of the new company.  There is also set a final take-over price for the employees, which is only paid, if the employees pass the 18 months trial period with satisfactory results  There are made a number of different agreements regarding HR support, etc.  Today all Ukrainian resources are SimCorp employees © 2009 IAOP® All Rights Reserved
  27. 27. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSimCorp Ukraine LLC – 2007/08 SimCorp starts the establishment of a subsidiary in Kiev (LLC) SimCorp hires a professional management to the company The long establishment process starts in October 2007 and by February 2008 the new company is more or less established with the office space (planned to 150 people), furniture, internet connections, IT equipment, etc. Next step is to establish all administrative functions in the company, including HR, Finance and Administration, internal IT support, etc. In March 2008, the major establishment is finished and the company starts working as an integrated daughter company of SimCorp. © 2009 IAOP® All Rights Reserved
  28. 28. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSimCorp Ukraine LLC – Today We have of course experienced a number of challenges since the establishment of SimCorp Ukraine LLC, such as:  Discipline problems with employees, which came from the original outsourcing project (here we have had to say goodbye to several people)  Infrastructure problems (bandwidth)  Communication challenges (we have now installed 2 video conference rooms) and we have increased English training  Acceptance problems between “old” SimCorp employees and Kiev-based employees  Level of local management and management skills (here we have enforced special management training for Kiev-based managers)  Team building of employees “taken-over” from the two partners, and those hired directly to the new company is not always easy  All administrative areas in relation to employees, authorities, technical setup, building, etc., etc. © 2009 IAOP® All Rights Reserved
  29. 29. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkSimCorp Ukraine LLC – Today SimCorp Ukraine LLC today  Since establishment in February 2008 we hired more than 70 people and performed 3 SimCorp Academies, and we are still growing  Have increased productivity with around 50% (have around 35% of the total production of code in SimCorp)  Have lowered the cost per employee in Kiev with around 3.600 EURO per year, which on a yearly basis gives a cost saving of 432.000 EURO since the own subsidiary start up and compared with the costs in the past  The turnover of people has fallen drastically, and it is not just because of the financial and economical crisis… © 2009 IAOP® All Rights Reserved
  30. 30. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkOverall lesson learned and conclusionsOverall lesson learned  Key elements in a successful outsourcing and insourcing: Management and decision wise:  Thorough investigation and preparation  Clear goals regarding demands, profile of partners and external conditions  Clear milestones and evaluation points  Ability and courage to say STOP and NO  The project should be approved and supported from the top management, and it should be clearly communicated that it is a company’s goal to succeed  Clear long term overall company strategy  Constant communication to all involved parties (internal and external) © 2009 IAOP® All Rights Reserved
  31. 31. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkOverall lesson learned and conclusionsOverall lesson learned Contractual wise:  Prepare always either a LoI (letter of intention) or MoU in the preliminary phase, when you start up a corporation, so all involved parties no the conditions for the corporation  Think through the whole expected scenario from the first contact to the exit (both in case of unsuccessful and successful exit)  Focus on all potential ways of continuing the project both with or without the selected partner/partners  Setup terms and conditions for staff in case of changes in the cooperation (remember the staff carry the investment element, because of training and knowledge transfer, etc.), how can we get them to stay with the project or company, etc. © 2009 IAOP® All Rights Reserved
  32. 32. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkOverall lesson learned and conclusionsOverall lesson learned Other learning points:  Outsourcing vendors’ commitment then to fall during the cooperation period, because they get new clients and new focus areas, make sure you keep their focus on YOU!  Use experienced project managers, with extensive knowledge and understanding of culture and local management skills  It is “easy to be popular, but difficult to be respected” in many countries as a foreign manager…  Keep regular follow up meetings and have clear measurement points and milestones (steering committee, reporting, evaluations, etc.)  When all involved parties operate in 2nd languages, then there are huge possibilities for misunderstanding and mistakes © 2009 IAOP® All Rights Reserved
  33. 33. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit 15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, DenmarkOverall lesson learned and conclusionsConclusion  Planning and a clear view of the total expected operation on both short and long term is a key to success  Good preparations and preparatory work pays off  The contractual framework should be thought well through, with all possible scenarios  You can not use standard contracts in a full-scale and long-term outsourcing/insourcing operation, as there are no standards, which cover all potential scenarios…  Involve experienced people from day one and do not “just” select the one who wants or a “rookie”, because in the long run it is very expensive and will give extra “challenges” and problems..  Remember the 3 T’s – “Things Take Time” – it is a key point to remember, if you want to operate in outsourcing... © 2009 IAOP® All Rights Reserved
  34. 34. The 2009 European Outsourcing Summit The 2009 European Outsourcing Summit15-16 October, 2009  Copenhagen Marriott Chicago Downtown | September 22, 2009 Business School  Copenhagen, Denmark © 2009 IAOP® All Rights Reserved

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