Critical success factors in the off shoring business dr. wong say ho, asocio

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  • @ea-inc. We deliver technology solutions that measurably improve the efficiency of our customers’ business operation. We help our customers keeping their focus on what matters most – profitability. We offer a wide range of IT Outsourcing services, ranges from implementing ERP applications, providing AMS to managing clients’ entire IT infrastructure and information system.
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  • Critical success factors in the off shoring business dr. wong say ho, asocio

    1. 1. * Critical success factors in the offshoring business: the practioners’ view * Track: Driving Economy & Bangladesh Outsourcing Conference Speaker : Dr. Wong Say Ho Secretary General, ASOCIO The human side of T E C H N O L O G Y TM www.e-asia.org
    2. 2. ASOCIO -Introduction <ul><li>Brief Introduction of ASOCIO :- </li></ul><ul><li>- established in 1984 by 4 founding countries, ie : Japan, S. Korea, Taiwan and Australia </li></ul><ul><li>- we represent 22 member countries in this Asian Oceanian region with more than 10,000 ICT companies with a total ICT trade of about USD200 billion. </li></ul>
    3. 3. <ul><li>Offshoring – </li></ul><ul><li>- is a type of outsourcing. </li></ul><ul><li>- Offshoring means having outsourced biz functions done in another </li></ul><ul><li>country; </li></ul><ul><li>- it’s the relocation by a company of a business process from one </li></ul><ul><li>country to another - typically an operational process, such as </li></ul><ul><li>manufacturing or supporting processes. </li></ul><ul><li>- more recently, offshoring has been associated primarily with the </li></ul><ul><li>sourcing of technical and administrative services supporting </li></ul><ul><li>domestic and global operations from outside the home country. </li></ul>What is Offshoring ?
    4. 4. Offshoring potentials….. <ul><li>Offshoring can be seen in the context of either production offshoring or services offshoring. </li></ul><ul><li>After its accession to the World Trade Organization (WTO) in 2001, the People’s Republic of China emerged as a prominent destination for production offshoring. </li></ul><ul><li>After technical progress in telecommunications improved the possibilities of trade in services, India became a country leading in this ICT domain though many parts of the world are now emerging as offshore destinations. </li></ul><ul><li>Russia, Ireland, Czechoslovakia and Poland have also surfaced as popular offshoring destinations for specific types of software expertise and so do the Philippines for their call center and customer support work. </li></ul>
    5. 5. Offshoring potentials …… <ul><li>Offshoring …….. </li></ul><ul><li>- the dominant location for much of the manufacturing </li></ul><ul><li>outsourcing (in the form of offshoring) by US companies </li></ul><ul><li>is China, which has made a push in recent years to also </li></ul><ul><li>become a provider of services. The Chinese central </li></ul><ul><li>government has made the “third industry”-services-a </li></ul><ul><li>priority for its national development plan in the coming </li></ul><ul><li>decades. English is taught in all levels of education </li></ul><ul><li>institutions. </li></ul>
    6. 6. <ul><ul><li>Offshoring </li></ul></ul><ul><ul><ul><li>Relocation of business processes to other countries in order to reduce labor expenses. Other times, the reasons for offshoring are seemed as strategic – to enter new markets, to tap talent currently unavailable domestically or to overcome regulations that prevent specific activities domestically. </li></ul></ul></ul><ul><ul><ul><li>Advantages of offshoring: </li></ul></ul></ul><ul><ul><ul><ul><ul><li>Lower cost of operations in foreign location </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Have proper Quality & Assurance </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Ensure quality of work </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Meet service level agreement within timeline </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Have dedicated project team </li></ul></ul></ul></ul></ul>Offshore Development
    7. 7. Key Success Factors for Offshoring servcies …. People Preparation Process Performance Profits “ 5 P ”
    8. 8. <ul><ul><li>People: </li></ul></ul><ul><ul><li>It all starts with the people in your offshore team. No matter how well you define your requirements, how solid the process of your supplier look: you need to have the right person doing the right things in your projects. In order to build a strong dedicated team that will produce results on the long term for you , it is crucial to have an influence on the selection of your team members . Ideally, you co-develop a recruitment process together with your supplier, where you can hold interviews, tests or any other screening method. </li></ul></ul>Key Success Factor for Off shoring
    9. 9. <ul><ul><li>Process: </li></ul></ul><ul><ul><li>There needs to be a common understanding of ‘ how we work ’. As an outsourcer, you need to have a basic structure on which all people involved can rely. In the beginning of the cooperation, the process might be written down on one page, but over time it should evolve into a well documented, proven offshore process document. A few crucial aspects that need to be described in the process are: how do we make requirements and who is responsible for which part; What online project management tool do we use and how do we use it (instruction guide); if your team is a team of programmers: what is our coding standard; how do we communicate (meetings, methods, systems); what are the steps involved from project inception until implementation. </li></ul></ul>Key Success Factor for Off shoring
    10. 10. <ul><ul><li>Preparation: </li></ul></ul><ul><li>Take the time to prepare for the offshore cooperation. Invest time in meeting the key people on your vendor’s side, to define processes, to select the right people in your team, to prepare contracts, to define projects, to get your existing organisation ready for the new situation . Before ‘doing the work’, a solid foundation has to be created by thinking about the ‘how we work’ . Your existing people have to get used to the change and they need to get the big picture. </li></ul>Key Success Factor of Off Shoring
    11. 11. <ul><ul><li>Profit: </li></ul></ul><ul><ul><li>Before and during the cooperation, the bottom line should be that off shoring brings your company profit . This should not be limited to the cost-savings, the maths should take into consideration: increased flexibility, possibility to take on more projects and grow in revenues, to realize faster time to market. </li></ul></ul>Key Success Factor of Off Shoring
    12. 12. <ul><ul><li>Performance: </li></ul></ul><ul><ul><li> All the people working in the cooperation should create productive output and this needs to be measured. Regular evaluations of the team members on aspects like productivity, quality, personal skills, team skills, billed hours, can increase the insight you have about each persons output. </li></ul></ul>Key Success Factor of Off Shoring
    13. 13. Strategy Development Sustained Management Relationship Building Selection Process Phase 1 Phase 2 Phase 3 Phase 4 Think Plan Negotiate Execute & Manage <ul><li>Strategy / Goals </li></ul><ul><li>Alignment </li></ul><ul><li>In-House or Out of House </li></ul><ul><li>Organizational Readiness </li></ul><ul><ul><li>Strategic-workforce </li></ul></ul><ul><ul><li>plan </li></ul></ul><ul><ul><li>Operational- </li></ul></ul><ul><ul><li>Decision making </li></ul></ul><ul><ul><li>governance </li></ul></ul><ul><li>Business Case </li></ul><ul><li>Develop Selection </li></ul><ul><li>Criteria </li></ul><ul><li>Selection Process </li></ul><ul><li>RFP </li></ul><ul><li>Site Selection </li></ul><ul><li>Transition Strategy </li></ul><ul><li>Performance Tracking </li></ul><ul><li>Internal Governance </li></ul><ul><ul><li>Strategic </li></ul></ul><ul><ul><li>Operational </li></ul></ul><ul><ul><li>Just-in-Time </li></ul></ul><ul><li>Pilot Project </li></ul><ul><li>Security Framework </li></ul><ul><li>Revise Business </li></ul><ul><li>Case </li></ul><ul><li>Contracting </li></ul><ul><li>Relationship Model </li></ul><ul><li>Exit Strategy </li></ul>Offshore Engaging Model
    14. 14. Customer specification Project Management R & D in Country B Customer (Country A) End result outsource output Off shoring Process Flow Company in Country B
    15. 15. What Global IT Off shoring Offer in the World??? <ul><li>Dhaka </li></ul>Client Resources Application Infrastructure Vendors Consulting Resources <ul><li>Operations of Applications & Infrastructure </li></ul><ul><li>Application Production Support </li></ul><ul><li>Server Support </li></ul><ul><li>Production Monitoring </li></ul><ul><li>Network Administration </li></ul><ul><li>Secured Hosting Environment </li></ul><ul><li>User Support </li></ul><ul><li>Maintenance </li></ul><ul><li>Controlled Enhancements </li></ul><ul><li>Bolt-on Development </li></ul><ul><li>Application Administration </li></ul><ul><li>Database Administration </li></ul><ul><li>Malaysia </li></ul><ul><li>Phoenix </li></ul><ul><li>Sacramento </li></ul><ul><li>Denver </li></ul><ul><li>Chicago </li></ul><ul><li>Houston </li></ul><ul><li>Dallas </li></ul>
    16. 16. <ul><li>Examples of the Off Shoring Services available in the market </li></ul>
    17. 17. IT Upgrades & Enhancements Workflow (Example) Onsite Activities Offshore Activities Project Charter Project Plan 1. Project Preparation Acceptance Test Onsite Testing & Training Business Requirements Collection Requirements Definition Functional/Technical Review Functional & Technical Designs Offshore Work Register Development Coding & Unit Testing Project Deliverables 2. Business Blueprint Data Conversion & Training 5. Go Live & Support 4. Final Preparation 3. Realization Data Conversion & Training Feedback/Communication ea Onshore & Offshore Team ea Onshore/Offshore Team ea Offshore Team
    18. 18. <ul><li>Some concerns …. </li></ul><ul><li>- about data security and privacy have </li></ul><ul><li>prevented some companies from taking </li></ul><ul><li>work offshore. </li></ul>
    19. 19. <ul><li>Other dimensions of Offshoring – </li></ul><ul><li>Nearshoring is taking the outsourced work to a nearby country ( such as Canada, in the case of USA). This is a popular model for companies that don’t want to deal with the cultural, language or time zone differences that involved in offshoring. </li></ul><ul><li>Captive Centers are offshore companies set up by organizations to provide internal services and in some cases to sell those same services to clients. Often US and European organizations setup cative centers for their outsourced work. </li></ul><ul><li>MNC are service providers with offices in many countries, which enable them to serve a global market of clients and tap the labor arbitrage available by offshoring certain types of work. </li></ul>
    20. 20. Offshoring - future….. ? <ul><li>The current global services landscape is marked by countervailing trends. On one hand, firms are responding to intensifying cost-saving imperatives by moving operations offshore, but on the other, some politicians are using global services offshoring as an easy scapegoat for the current economics woes and high unemployment rates in the countries. </li></ul><ul><li>Although there is sign of slowdown in the global growth services but in fact, this industry is still full of potential and ready to be tapped ………. </li></ul>
    21. 21. Offshoring in Bangladesh… <ul><li>Bangladesh certainly has the potential :- </li></ul><ul><li>- with more than 160 million population </li></ul><ul><li>- low costs and hard working people </li></ul><ul><li>- English language is widely speak and use </li></ul><ul><li>- with the Government support to develop a </li></ul><ul><li>digital nation. </li></ul><ul><li>- with the technological advancement, ICT </li></ul><ul><li>training & education development </li></ul><ul><li>- with good strategic & marketing planning </li></ul>
    22. 22. Thank you The human side of T E C H N O L O G Y TM Dr. Wong Say Ho Email: dwong@asocio.org www.e-asia.org

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