Transnationalisation of IT services

1. SterWen’s viewpoint:
transnationalization of IT services
September 2008
Transnationalization…an old concept that is today
Contents
being applied to information system divisions
1 An old concept
Globalization, internationalization, multinationalization and transnationalization
2 How to transnationalize
represent concepts that seem to be in vogue. And yet, contrary to what the
3 The case of our client abundant literature covering it today may lead you to believe, globalization is not
a new phenomenon. Without going back further in history, the 19th century had
4 SterWen’s approach
already seen a period of opening up characterized by rising levels of flows for
5 To conclude... goods and capital.
One of the characteristics of the globalization of companies is their
“transnationalization”, or how to exchange goods and services across borders
while keeping separate entities in each one of the countries concerned. Indeed,
transnationalization has a multi-territorial deployment logic that leads businesses
to set up subsidiaries and sites in other countries.
...a transnational
A transnational business strives for efficiency, not for its benefits in themselves,
business strives for
but as a means of achieving competitiveness on a global scale. It recognizes the
efficiency...
importance of the ability to meet local needs, but as a tool for ensuring the
flexibility of global operations.
We can see two main characteristics within a transnational organization:
It always learns locally in order to take exemplary practices on board,
-
and then globalize them (when all exemplary practices come from the
head office, the business is global and not transnational).
It strives for excellence, no matter the diversity of its management
-
team.
Today, this concept of a transnational organization or transnationalization fully
applies to IT services and information system divisions: a global firm’s various IT
subsidiaries or business units must work together in order to respond to the
business issues of their clients operating in several countries: achieving
operational efficiency by providing a better level of service for a lower cost.
... work together in order
to respond to the
business issues of their
clients...

2. PAGE 2
How to transnationalize IT services...
The case of our client
Our client is an in-house company managing the IT infrastructure of a major
group present in around 20 countries. With a budget of nearly 1 billion euros, the
company employs several thousand people around the world.
The organization is built around client services and service providers. Following
“getting everyone on the creation of this organization, a strategy to regionalize the operational teams
was rapidly rolled out in order to accelerate in-house growth and improve the
board […] to ensure that
efficiency and effectiveness of its sites within the regions. The
executive management
transnationalization of the organization then becomes not only a requirement,
is not out of sync with
but also and above all an anticipation of the near future: how can an IT service
operational expectations”
company with subsidiaries in around 20 countries, faced not only with managing
transnational clients but also increasingly transnational platforms, manage this
multi-border aspect with these processes?
According to one of the program's executive sponsors, the main challenge is
“getting everyone on board, both regional managers and operational staff, in
order to ensure that executive management is not out of sync with operational
expectations”.
SterWen Consulting’s approach
The main objective for one of our interventions has been to put suitable
processes in place in order to help the client relations departments and the
service providers to manage their transnational platforms and clients, to support
the services from both a project and operational perspective, to tackle the
transnational issues and to prepare for the transnational challenges of tomorrow.
An approach with results that can be seen over the short term (“quick wins”) is
required by the executive committee. Indeed, certain business units have already
been faced with cases of transnational issues with their clients for some time
now; “acting quickly was essential in order to manage what was already in place
and seek to standardize the processes that were being used by each player, in
…an approach with
their own way”. As a result, the approach adopted involved rapidly sharing a
results that can be seen
common frame of reference for processes before implementing a longer term
over the short term…
solution with various tools.
The first step involved defining a transnational operating model, defined and
validated with real-life cases submitted by stakeholders. This model has been
used as a foundation not only for the quick wins section, but also and above all
for the long-term solution, even if this covers more processes.

3. PAGE 3
Eight main transnational flows have been identified for the quick win section of
the program:
Five for the service providers (incident management, change
-
management, service design and control management, standard
request management, resource allocation management for projects)
…the governance Three for client services (project portfolio and request management,
-
process is streamlined financial processes, governance principles).
and therefore becomes A Global Process Owner (GPO) is responsible for a flow at global level, supported
very effective… by Process Owners (PO) in each one of the countries using the flow. For each one
of the processes to be deployed, the GPO and the POs take part in defining these
flows, overseen by Black Belts. All the countries and all the regions are
represented by the Process Owners, who guarantee the global process used
locally.
An identical approach is then rolled out for each one of these flows:
1. A workshop with the stakeholders, the GPOs, POs and Black Belts, to
identify the process to be put in place, making it possible to cover the
transnational flow within a very short turnaround time. The objective
was clear: “we needed to come out of this working session with
principles that were adapted to a transnational way of working and
validated at the end of the workshop by an executive sponsor” explains
F. Thomas, a partner in SterWen Consulting and head of the program on
the upstream phase. The governance process is streamlined and
therefore becomes very effective. Just one two-day working session is
sufficient for each one of these flows and for all the companies involved
… Three months later, all around the world to define and validate the target to be implemented.
Each workshop must finish not only with a validation of the process, but
the elements required to
also a list of the procedures to be developed and a list of the deliverables
start up… in the Group's
required to put the process in place.
13 business units are
ready simultaneously. 2. For each one of the flows, an action plan is rolled out. It is led at global
level by the SterWen program director, with the help of an in-house
project leader from the client. The information is escalated locally by the
POs, consolidated at GPO level and set to music by the project
management team. Three months later, all the elements required to
start up (procedures, guidelines, shared spaces, exchange files) in the
Group's 13 business units are ready simultaneously.
3. A launch meeting makes it possible to position the startup date for each
one of the flows and carry out the “Go Live”.
4. Then, for a short period following the startup, adjustment meetings are
regularly held in order to further enhance the process, drawing on
feedback from experience from the countries and regions.

4. PAGE 4
To conclude...
The transnationalization program was launched at our client at the beginning of
Addressing local issues
2008 and the transnational processes identified have gone live in 13 countries
with a central
simultaneously as of June 2008.
management structure
The company's common heritage, looking beyond material investments, is its
information and knowledge. The transnationalization of IT services involves a
sharing of this information in one same language, most often English. This first
change not only impacts the management teams, but also and above all the
operational teams who are going to have to communicate with their counterparts
in a language that is not their own. But this change is neither the most critical
nor the one that sees most resistance.
The fundamental change with the transnationalization of IT services is primarily
from a working method standpoint. The coordination process is complex within
an environment in which decision-making is shared. Managers must overcome
the organizational biases resulting from their respective heritages. It is necessary
to manage the complexity and develop a flexible approach for coordination in
order to keep control over a complex organization. The sense of accountability
for processes among GPOs and POs represents one of the program’s key success
factors, since we are operating within a non-hierarchical context, thinking local
on a global dimension.
To act together, it is vital
Setting up a transnational organization involves creating transnational centers of
to have a vision that is
excellence that are independent from the various national subsidiaries.
shared, a strategy that is
understood Capitalizing on experience and identifying common and specific
-
practices,
Addressing local issues with a central management structure,
-
Coordinating, harmonizing, developing joint initiatives.
-
To act together, it is vital to have a vision that is shared, a strategy that is
understood, programs for action that are tailored to the needs, and information
system commitments that are legitimized. The major risk primarily concerns the
gap between the vision of managers and agents. This gap is behind waste,
malfunctions, communication errors, a loss of energy and a lack of collective
efficiency and effectiveness. For management, coherency therefore means
rallying people around a transnationalization project whose governance is based
on an accepted strategy.
Olivier Erhard
SterWen Consulting Manager
Information Systems Management and Strategy