Taking Advantage of China’s Multi-
                        lingual Capability:
                           A Case Study
   ...
Topics

                      1 Background and Overview
                      2   Initial Technical Support Structure in A...
Company Overview

                      •   Strength
                           –   Founded i
                            ...
Global Support Structure

                                                                                                ...
Topics

                      1   Background and Overview



                      2 Initial Technical Support Structure i...
The Initial Technical Support Structure in Asia Pacific

            The support structure before support business outsour...
Reason’s to Off-shoring / Outsourcing
                         g             g




                                       ...
Topics

                      1   Background and Overview




                      2   Initial Technical Support Structur...
Global Service Location Index – 2009

  China becomes one of the best outsourcing destination of global service, especiall...
Global Delivery Service Index




For a flatter world
HR Skills & Availability Score




           Availability of resources is the key to long-term cost sustainability

For a...
Cost Saving VS. HR Skill & Availability




For a flatter world
IDC Global Delivery Index
                     y




                               Source: IDC GDI-AP v2.0, May 2008




...
Topics

                      1   Background and Overview




                      2   Initial Technical Support Structur...
China Outsourcing Location Overview
   Central Location:
    Beijing
    Shanghai
    Shenzheng
    S
    Hong Kong

   Sa...
Dalian Overview

   The most recognized location in the                                               Sendai
             ...
World Class Infrastructure
   “Global 500” for Human Habitation
    Global 500




Most Challenging Golf Course




For a ...
Dalian’s Outsourcing Industry Structure




             1980’s             1990’s        Later 1990’s   Since 2000
      ...
HR expenses in Dalian
  Average monthly salary p “IT” related p
       g        y      y per            position
  Positio...
The Reasons Why Choose Dalian

Why Dalian
       – Low Cost Location for APAC Technical Support
         Center
       – M...
Topics

                      1   Background and Overview




                      2   Initial Technical Support Structur...
Captive VS. Outsourcing
                         g
     The comparison of main strategic and operational factors that usua...
The Third Choice
   After careful evaluation, decide to go with the Hybrid Staff augmentation / Outsourcing
   (BOT: Build...
Why YIDATEC
     y

   Following are some of the key reasons for to choose
   a local vendor like YIDATEC:
   •YIDATEC is ...
Topics

                      1   Background and Overview




                      2   Initial Technical Support Structur...
Dalian Support Center
 •     Initial Interest Started Sept 2007
        – Approached Dalian High Tech Industrial Zone Fore...
Achievement of Dalian TSC
        Primary Customer Supported in: Asia Pacific
        Language Supported: Japanese, Korean...
The Restructured Technical Support in Asia Pacific
                                                   Customers/Partners

...
Topics

                      1   Background and Overview




                      2   Initial Technical Support Structur...
Lesson Learned Through The Project
                       g         j

             Identify your goal early and know what...
Thank You




For a flatter world
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John Yang, YiDATEC - Taking Advantage of China's Multilingual Capability

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John Yang, YiDATEC - Taking Advantage of China's Multilingual Capability

  1. 1. Taking Advantage of China’s Multi- lingual Capability: A Case Study John Yang May 2010 For a flatter world
  2. 2. Topics 1 Background and Overview 2 Initial Technical Support Structure in Asia Pacific 3 The Reason of Our Decision of Moving Technical Support to China 4 Why Did We Choose Dalian and YIDATEC 5 Captive VS. Outsourcing 6 Achievement After 1 Year of Operation 7 Lesson Learn Through The Process For a flatter world
  3. 3. Company Overview • Strength – Founded i F d d in 1980 – 10th largest independent software company – 16,000 customers in 124 countries – Fiscal Fi l 2009 revenues of $1.87B f $1 87B – Solid balance sheet • Innovation, vision, and execution – Pioneered concept of BSM – 94 software technology patents – Continued growth through internal innovation and acquisitions i iti – Support for cloud computing, virtual, distributed, and mainframe environments – Proven experience For a flatter world
  4. 4. Global Support Structure Contact Centers Level 2 Support Centers Level 2 Support Centers pp Co-located with R&D Dublin, Ireland Dalian, China Dublin Amsterdam Egham Paris Tel Hai Dalian Lexington Beijing B iji Pleasanton/ Spain Tokyo Austin Seoul Sunnyvale McLean / Herndon Houston Shanghai Pune Singapore g p Houston, TX, USA Sao Paulo Buenos Aires Melbourne For a flatter world
  5. 5. Topics 1 Background and Overview 2 Initial Technical Support Structure in Asia Pacific 3 The Reason of Our Decision of Moving Technical Support to China 4 Why Did We Choose Dalian 5 Captive VS. Outsourcing 6 Achievement After 1 Year of Operation 7 Lesson Learn Through The Process For a flatter world
  6. 6. The Initial Technical Support Structure in Asia Pacific The support structure before support business outsourced: Customers/Partners Japan Korea Great China South Asia Australia & NZ Web / Email / Phone Concerns: AP Customer Contact Center ›CCRs in APCC Provide Pure (Melbourne) Language Translation Services Japanese/English Korean/English Mandarin/English Response CCRs CCRs CCRs in English English is common service language ›Little or No Technical Added-Value If Customer/Partner are Provided by CCRs Translate / Dispatch Accepts English ›Lack of Engineers with Solid Customer Support Technical Background and Fluent (Level 2) Japanese/Korean iin A t li J /K Australia Japan Korea Singapore China Australia US/EMEA TSAs TSAs TSAs TSAs TSAs TSAs Escalate R&D (Level 3) For a flatter world
  7. 7. Reason’s to Off-shoring / Outsourcing g g Source: Deloitte Consulting Additional Considerations: 1. Growing Market in Asia Pacific Region 2. Long-term Cost sustainability Long term For a flatter world
  8. 8. Topics 1 Background and Overview 2 Initial Technical Support Structure in Asia Pacific The Reason of Our Decision of Moving Technical 3 Support to China 4 Why Did We Choose Dalian and YIDATEC 5 Captive VS. Outsourcing 6 Achievement After 1 Year of Operation 7 Lesson Learn Through The Process For a flatter world
  9. 9. Global Service Location Index – 2009 China becomes one of the best outsourcing destination of global service, especially in Asia Pacific region. For a flatter world
  10. 10. Global Delivery Service Index For a flatter world
  11. 11. HR Skills & Availability Score Availability of resources is the key to long-term cost sustainability For a flatter world
  12. 12. Cost Saving VS. HR Skill & Availability For a flatter world
  13. 13. IDC Global Delivery Index y Source: IDC GDI-AP v2.0, May 2008 For a flatter world
  14. 14. Topics 1 Background and Overview 2 Initial Technical Support Structure in Asia Pacific 3 The Reason of Our Decision of Moving Technical Support to China 4 Why Did We Choose Dalian and YIDATEC 5 Captive VS. Outsourcing 6 Achievement After 1 Year of Operation 7 Lesson Learn Through The Process For a flatter world
  15. 15. China Outsourcing Location Overview Central Location: Beijing Shanghai Shenzheng S Hong Kong Satellite Cities: Tianjin Suzhou Beijing Hangzhou Tianjin Dalian Xi an Cost Saving Location: ▲Chengdu Hangzhou ▲Wuhan Shanghai Suzhou ▲Xi an Chengdu Wuhan Multilingual Location: Shenzhen Dalian Hong-Kong Hong Kong For a flatter world
  16. 16. Dalian Overview The most recognized location in the Sendai Toyama y world that has a high availability not Dalian Tokyo only in language capable talents, but Osaka also in technology & language Nagoya Hiroshima combined capable talents to service the Fukuoka APAC region. • Low operation cost as a second-tier city • Gl b l 500 for Human Habitation Global f H H bit ti • Mature IT industry • Rich pool of Japanese/Korean & English capable resources • International city with strong government support • Established cooperation between local Universities and IT companies • Great transportation access to the city ( p y (from Japan & Korea) p ) For a flatter world
  17. 17. World Class Infrastructure “Global 500” for Human Habitation Global 500 Most Challenging Golf Course For a flatter world
  18. 18. Dalian’s Outsourcing Industry Structure 1980’s 1990’s Later 1990’s Since 2000 General software Starting Dramatic Internationalized I t ti li d development outsourcing growth For a flatter world
  19. 19. HR expenses in Dalian Average monthly salary p “IT” related p g y y per position Position RMB AUD (rate: 6.3) University graduates 2,000 – 3,000 317– 476 Software engineer (0.5-3 years exp.) 3,500 – 4,500 556– 714 System engineer (3-5 years exp.) 6,000 – 9,000 952– 1,428 Project manager (5-10 years exp.) 10,000 – 16,000 1,585 – 2,536 Average monthly salary per “BPO” & Management related position Position RMB AUD (rate: 6.3) 6 3) Call center operator (only Chinese, 1-2 yrs exp.) 2,500 – 3,200 397– 507 Call center operator (English, 1-2 yrs exp.) 5,500 – 7,000 873– 1,111 Call center oper. ( p p (Japanese or Korean, 1-2 yrs exp.) , y p) 4,000 – 5,500 , , 634– 873 Senior operator (English, 3+ yrs exp.) 6,500 – 8,500 1,032 – 1,349 Senior operator (Japanese or Korean, 3+ yrs exp.) 6,500 – 8,500 1,032– 1,349 Process Leader 7,000 – 10,000 1,111 – 1,585 Operation Manager (fluent Japanese or Korean) 15,000 – 25,000 2,380 – 3,968 Operation Manager (fluent English) 15,000 – 20,000 2,380 –3,175 Native speaker & employees Position RMB AUD (rate: 6.3) Native English 7,500 – 10,000 1,090 – 1,585 Native Japanese/South Korean 6,500 – 15,000 1,032 – 2,380 For a flatter world
  20. 20. The Reasons Why Choose Dalian Why Dalian – Low Cost Location for APAC Technical Support Center – Mature IT Environment with World-Class Infrastructure – Rich Technical and Language Talent Pool – Established Cooperation between Local Universities and IT Companies Which Can Satisfy Our Long-Term Talent Demand – Local IT Vendors Have Extensive Experience p Working with MNCs – Local Vendor Can Provide Improved Services to Consolidate Our North Asian Customers and Partners – Position for Growth For a flatter world
  21. 21. Topics 1 Background and Overview 2 Initial Technical Support Structure in Asia Pacific 3 The Reason of Our Decision of Moving Technical Support to China 4 Why Did We Choose Dalian and YIDATEC 5 Captive VS. Outsourcing 6 Achievement After 1 Year of Operation 7 Lesson Learn Through The Process For a flatter world
  22. 22. Captive VS. Outsourcing g The comparison of main strategic and operational factors that usually facilitate organization’s decision in favor of third-party outsourcing or captive model. Captive Center 3rd Party Outsourcing Disadvantages Advantages: • Longer build up period if building from scratch • Gain operational flexibility (quickly free up internal • Higher risk due to initial investment and ramp-up or ramp-down external resources) • Administrative management can pose problems in a • No long-term commitment or large initial unfamiliar location and environment investment • It takes time to gain access to the qualified local • Access to specific technology or domain expertise resources (brand name, recruitment channel, name channel and best practices that are not available in-house relations with Universities & College) • Can focus on the core business • Long decision cycles (most of time at global level) VS Disadvantages: Advantages: • Less control and operational transparency • Experience the saving first-handed • Most of time don’t have control over project • Retain key resources & knowledge resource • Control of all processes and operations • Cost saving can be minimal when using large • Gain local experience and develop local market service providers • Easily integrated into internal orgnization • No driver for innovation and cost reduction • Information security can be a issue when resource and location are shared between projects 22 For a flatter world © Copyright 5/17/2010 Software, Inc.
  23. 23. The Third Choice After careful evaluation, decide to go with the Hybrid Staff augmentation / Outsourcing (BOT: Build Operate Transfer) engagement model with YIDATEC. With the BOT model Build-Operate-Transfer) YIDATEC was able to enjoy following key advantages: •Time, because the service provider is presumably more expert at assembling the infrastructure and obtaining local regulatory consents; g g y •Money, because the benefits of the new infrastructure can be enjoyed sooner, and there is no initial investment; •Effort, because the service provider is performing the effort (Setup, Recruitment, and all other administrative tasks) •Flexibility, although has no intension to transfer the operation any time soon, the model does provide the flexibility to choose when needed •Minimal Risk, with the flexibility of the engagement model, can pull out with minimum loss if thing don’t work out f ’ •Partnership, through the project, not only built a service center, but also built long- lasting partnership with a strong local partner to help explore the local relations For a flatter world
  24. 24. Why YIDATEC y Following are some of the key reasons for to choose a local vendor like YIDATEC: •YIDATEC is flexible and willing to p g provide BOT services •With over 1500 staffs, YIDATEC is large enough to “trust” and small enough to “care” •With stable financial backing and strong local governmental relation, YIDATEC can help to be better positioned in China. (The parent company of YIDATEC is one of the largest real estate company in China) •YIDATEC has strong experience serving Japan, and Korean customers, and has presents in Japan, and various locations in China •Mature QA and Training systems •Experience in technical supports rather than general ITO and BPO For a flatter world
  25. 25. Topics 1 Background and Overview 2 Initial Technical Support Structure in Asia Pacific 3 The Reason of Our Decision of Moving Technical Support to China 4 Why Did We Choose Dalian and YIDATEC 5 Captive VS. Outsourcing 6 Achievement After 1 Year of Operation 7 Lesson Learn Through The Process For a flatter world
  26. 26. Dalian Support Center • Initial Interest Started Sept 2007 – Approached Dalian High Tech Industrial Zone Foreign Investment Promotion Bureau – Spoke to Other Software Vendors/Suppliers • RFP and Evaluation Started April 2008 – 7 Suppliers were Invited to Respond – 2 vendors Short- Listed – Contract awarded to YiDATEC on Oct 1, 2008 • Office Fit Out and Staff Recruitment – Successfully Completed in Very Short Time of 1.5 Months • Staff Onboard and New Hire Training - 15th Nov, 2008 • Center Went Live – Jan 1st, 2009 • AP Technical Support Center – 10 L1 Technical Support Analysts – 11 L2 TSAs – 1 Support Managers For a flatter world • Expected to Grow to About 30 Staff by End of 2010
  27. 27. Achievement of Dalian TSC Primary Customer Supported in: Asia Pacific Language Supported: Japanese, Korean, English and Mandarin Operating Hours: TSC is 5X12 operation and weekend supports Functional Teams: About 22 Engineers in Customer Care Rep (L1) Team Technical Support Analyst (L2) Team, QA Team and Team, Team Training Team Others: Dalian TSC is also supporting some cases passed from U.S and EMEA Dalian TSC U.S. EMEA Asia Pacific For a flatter world
  28. 28. The Restructured Technical Support in Asia Pacific Customers/Partners Japan Korea Great China South Asia Australia & NZ Web / Email / Phone technical response p technical technical response p issue issue issue response Dalian TSC Front Line Customer Support Japanese Korean English Backup CCR › 10% Cost saving in the first 12 months of (CCRs) (CCRs) (CCRs) (Japanese +Korean) operation (Considering a new call center Level-1&2 Technical Support hardware & software investment) Japanese Korean English Backup TSA › Improve & Maintain Customer (TSAs) (TSAs) (TSAs) (Japanese +Korean) Satisfaction at 90% Mandarin is common service language, all the above Agents › Reduce Management Overhead and can d l with cases iin M d i Chi deal ith Mandarin, Chinese iis covered with all available agents d ith ll il bl t complexity l it › Flexibility in resource management escalation escalation escalation R&D (Level 3) For a flatter world
  29. 29. Topics 1 Background and Overview 2 Initial Technical Support Structure in Asia Pacific 3 The Reason of Our Decision of Moving Technical Support to China 4 Why Did We Choose Dalian and YIDATEC 5 Captive VS. Outsourcing 6 Achievement After 1 Year of Operation 7 Lesson Learn Through The Process For a flatter world
  30. 30. Lesson Learned Through The Project g j Identify your goal early and know what you want Try to be involved as much as possible during the initial stage of the operation Treat the offshore team as an extension of your own team Be prepare to be involved in recruitment and training Communication and customer service skills can still be a challenge Drive the customer satisfaction and process improvement f Facility and infrastructures are excellent and latest in Dalian A reliable and flexible local partner can be a great help For a flatter world
  31. 31. Thank You For a flatter world
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