Business and Legal Structures for Outsourcing Success February 19, 2006 Chas R. Mullins Managing Director, neoIT
Agenda <ul><ul><li>Fundamentals in Structuring Outsourcing Engagements </li></ul></ul><ul><ul><li>Factors that effect your...
Offshore Strategy Framework/Alignment Company Culture Affinity for outsourcing & globalization including past experiences ...
Strategic Globalization Process Analyze Portfolio Manage Acquire Information Develop Strategy Select Geography, Partners S...
<ul><li>Knowledge > Plan > Source > Manage </li></ul><ul><li>Optimizing Savings, Control, Quality and Risk </li></ul>Lifec...
O4 Methodology Source: neoIT
A Structured Approach  <ul><li>Ensures a long term view of goals and objectives </li></ul><ul><li>Allows for effective ven...
Agenda <ul><ul><li>Fundamentals in Structuring Outsourcing Engagements </li></ul></ul><ul><ul><li>Factors that effect your...
Are You Ready for Globalization? Globalization Risk Tolerance Index Indicates the organization’s ability to prepare for, m...
<ul><li>Misalignment of corporate and globalization strategy </li></ul><ul><li>The internal battles and protection of turf...
Globalization Strategy - Essential to Have a Globalization Roadmap <ul><li>Execution Roadmap </li></ul><ul><li>Geographic ...
Globalization Strategy - Defining the Roadmap <ul><li>Asking the right questions… </li></ul><ul><ul><li>What:   prioritizi...
What: Evaluating the Offshoreability Offshoreable Processes will cut across each layer Migrate
What – Prioritizing the Processes Globalization Matrix Source:  neoIT Assessment Methodoloy 30.0 40.0 50.0 60.0 70.0 80.0 ...
Where – Defining the Location Low  Medium  High  India Philippines China Hungary English Proficiency Cultural Compatibilit...
Where: Global Sourcing Location Strategy Onshore Nearshore Offshore On-site Team Off-site Team Off-site Team Off-site Team...
How – Making the Ownership Decision Transition Time Short Long Upfront Investment Limited High Build Operate Transfer (BOT...
When – Execution: Transition Waves Time Start-up costs decline with maturity and steady state is reached sooner Rate of Re...
Agenda <ul><ul><li>Fundamentals in Structuring Outsourcing Engagements </li></ul></ul><ul><ul><li>Factors that effect your...
Process Flow The difference in Offshoring is the nature of the dynamic variables that severely impact offshore sourcing ou...
Evaluating Vendor Options Carreker, TRW, MasterCard Inautica, Sitel, Aviva, P&O Nedloyd GE, Amex, Standard Chartered, AXA ...
Align Key Supplier Selection Criteria with Overall Strategy Sources:  Gartner ,  neoIT
Best Practices: Supplier Due Diligence Culture of Company  Domain Experience Performance History Human Resources /Labor Po...
Sample Decision Model Source 69.00 100 43 60 29.5 45 45 60 18.5 30 30 45 41 60 Supplier 5 67.33 100 47 60 27.5 45 40.5 60 ...
Implementation Support Knowledge Acquisition Reverse Knowledge Transfer Knowledge Transition Knowledge Acquisition Reverse...
One Organization’s Global Sourcing Story <ul><li>Case Example: A F500 Health & Life Insurance Company </li></ul><ul><ul><l...
<ul><li>Poor Transition/ Governance. </li></ul><ul><li>Failure to achieve outsourcing process maturity </li></ul><ul><li>W...
Assess Operational Efficiency  <ul><li>Key Objectives </li></ul><ul><li>Understand business challenges </li></ul><ul><li>R...
Agenda <ul><ul><li>Fundamentals in Structuring Outsourcing Engagements </li></ul></ul><ul><ul><li>Factors that effect your...
What is Governance? <ul><li>Contract management  </li></ul><ul><li>Relationship management </li></ul><ul><li>Performance m...
Need For Governance <ul><li>Often heard statements from client side: </li></ul><ul><li>Not happy with quality of delivery ...
Need For Governance <ul><ul><li>Often heard statements from the supply side: </li></ul></ul><ul><ul><li>Not honoring small...
Governance Model/Framework Expect to invest 5-8% of total spend in governance <ul><li>Service levels – monitoring, reporti...
Establishing a PMO Contract Management <ul><li>Key personnel Staffing,  </li></ul><ul><li>Attrition </li></ul><ul><li>Back...
Need For Governance <ul><li>Most common reasons for failure to achieve full potential in offshoring </li></ul><ul><ul><li>...
A Framework for Managing Risk  Time Readiness Start-up Ramp-up Steady-state Stage 1   Geo-political Country Socio-economic...
Program Governance Area:  Performance Management - Focus on Day-to-Day Operations Key Issues Addressed:  Proper QA process...
Key Activities Benefits Engagement Model Program Governance Area:  Resource Management – Ensures appropriate staff and ski...
Key Activities Benefits Engagement Model Program Governance Area:  Contract Management – Enforces Terms & Conditions which...
Key Activities Benefits Engagement Model Program Governance Area:  Financial Management provides a proper checks and balan...
Key Activities Benefits Engagement Model Program Governance Area:  Relationship Management - Allows for Alignment of Goals...
Inaction leads to course corrections and reassessments midway through initiatives  <ul><li>Service Providers – “We need to...
Key Governance Activities  <ul><ul><li>Personal interaction/email/phone calls </li></ul></ul><ul><ul><li>Weekly scheduled ...
The Results <ul><ul><li>Improved Quality and Service </li></ul></ul><ul><ul><ul><li>Faster cycle times were achieved and c...
The Challenges Along the Way <ul><ul><li>Organizational Buy-In </li></ul></ul><ul><ul><li>People Issues </li></ul></ul><ul...
Steady State Activities <ul><li>Activities </li></ul>Program Management Areas  Closure review SL trend analysis   SL measu...
Agenda <ul><ul><li>Fundamentals in Structuring Outsourcing Engagements </li></ul></ul><ul><ul><li>Factors that effect your...
Best Practices - Defining the Business Case Company Culture Affinity for outsourcing & globalization including past experi...
Best Practices - Striving for Optimum Balance Risk Cost Savings Quality Control Sourcing Objectives
Best Practices - Envisioning the End State F&A IT Customer Service Marketing Supplier B Supplier A HR IT Customer Service ...
<ul><ul><li>Share a belief that planning and lifecycle management is important to long term success </li></ul></ul><ul><ul...
How to Best Leverage Global Sourcing! <ul><li>Guiding Principles </li></ul><ul><ul><li>Ensure internal alignment and suppo...
Critical Success Factors <ul><ul><li>Internal Buy-in </li></ul></ul><ul><ul><ul><li>Organization needs to undertake a real...
4 Key Take Aways <ul><ul><li>Lack of attention can lead to costly setbacks for globalization initiatives </li></ul></ul><u...
Contact Information Chas R. Mullins Managing Director [email_address] 816.213.1171 neoIT Global Headquarters 2603 Camino R...
Key Assessment Questions - HR <ul><ul><li>Expatriate policy (process checklists/ agreements/service delivery) </li></ul></...
Key Assessment Questions - Support <ul><ul><li>Senior Management? </li></ul></ul><ul><ul><li>Business Units? </li></ul></u...
Key Assessment Questions - History <ul><ul><li>Lack of user buy-in/acceptance </li></ul></ul><ul><ul><li>Lack of executive...
Key Assessment Questions - Offshoring Competency <ul><ul><li>Does your company have an extremely lean staff? </li></ul></u...
Key Assessment Questions <ul><ul><li>Comprehensive HR strategy for offshore outsourcing  </li></ul></ul><ul><ul><li>HR ris...
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2006 OWS Workshop Presentation V3.0

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2006 Outsourcing World Summit Workshop Presentation

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2006 OWS Workshop Presentation V3.0

  1. 1. Business and Legal Structures for Outsourcing Success February 19, 2006 Chas R. Mullins Managing Director, neoIT
  2. 2. Agenda <ul><ul><li>Fundamentals in Structuring Outsourcing Engagements </li></ul></ul><ul><ul><li>Factors that effect your successful Outsourcing Initiative </li></ul></ul><ul><ul><li>Implementing a Successful Outsourcing Initiative </li></ul></ul><ul><ul><li>Governance, what is it and why is it important </li></ul></ul><ul><ul><li>Critical Success Factors and Key Take Aways </li></ul></ul>
  3. 3. Offshore Strategy Framework/Alignment Company Culture Affinity for outsourcing & globalization including past experiences Quality Need for consistent quality and service levels Risk Manage stability, security, privacy, volatility, etc. Control Ownership preference as influenced by risk & culture factors Cost Savings Need for reducing cost or fundamentally altering business model Corporate Strategy Business plan, goals and results expected-acquisition, cost structure, growth, flexibility, risk aversion, profitability, cash etc. Social Responsibility Issues related to job loss, globalization, employee upheaval, etc. Industry Activity Offshore actions of competitors and industry players
  4. 4. Strategic Globalization Process Analyze Portfolio Manage Acquire Information Develop Strategy Select Geography, Partners Source/Build/ Acquire/Partner Contract Transition “ Adopting Process For Globalization Vital For Success”
  5. 5. <ul><li>Knowledge > Plan > Source > Manage </li></ul><ul><li>Optimizing Savings, Control, Quality and Risk </li></ul>Lifecycle Approach: O4 SM Methodology Tasks Goals Source: neoIT O4 Methodology Phase 3: Source & Build Phase 4: Manage Phase 2: Plan Phase 1: Knowledge <ul><li>Create requirements docs </li></ul><ul><li>Conduct scripted walk-through </li></ul><ul><li>Conduct bidder’s conference </li></ul><ul><li>Bid review and scoring </li></ul><ul><li>neoQA-based Due Diligence </li></ul><ul><li>Contract structuring and negotiation </li></ul><ul><li>Alternatively for “ownership” options </li></ul><ul><li>Determine performance impact of transition </li></ul><ul><li>Define and implement processes for issue and risk management </li></ul><ul><li>Effect transition </li></ul><ul><li>Manage: performance, relationship, contract, resource and financial management </li></ul><ul><li>Healthcheck </li></ul><ul><li>Readiness assessment </li></ul><ul><li>Offshoreability assessment of current portfolio </li></ul><ul><li>Base case cost analysis </li></ul><ul><li>Definition of objectives </li></ul><ul><li>Strategic evaluation of offshoring options </li></ul><ul><li>Identification of candidates and locations </li></ul><ul><li>Definition of timelines </li></ul><ul><li>Market research </li></ul><ul><li>Supplier/location visits </li></ul><ul><li>Knowledge workshop </li></ul><ul><li>Understanding of </li></ul><ul><ul><li>Offshore models </li></ul></ul><ul><ul><li>Case Studies </li></ul></ul><ul><ul><li>Peers </li></ul></ul><ul><ul><li>Best Practices </li></ul></ul><ul><li>Ensure senior level sponsorship </li></ul>Understanding the Offshore Opportunity; Knowledge to help you make the right decision and avoid the wrong ones A Strategic Offshore Blueprint; Answer the Questions of What, Why, When and Where Selection of vendor and negotiated contract specifying rules of engagement Ongoing contract governance and program management to ensure performance and the realization of the projected benefits
  6. 6. O4 Methodology Source: neoIT
  7. 7. A Structured Approach <ul><li>Ensures a long term view of goals and objectives </li></ul><ul><li>Allows for effective vendor rationalization and spend allocation </li></ul><ul><li>Ensures effective mapping of requirements to market/supplier capabilities </li></ul><ul><li>Allows for orderly transition and migration from staff aug to project outsourcing </li></ul>Portfolio Assessment MSA Review Vendor Strategy Sourcing Strategy Governance Framework <ul><li>Links performance to pricing </li></ul><ul><li>Incorporates productivity improvement </li></ul><ul><li>Incorporates multi-geographic, multi-tier pricing </li></ul><ul><li>Mitigates rate increases by negotiating long-term pricing </li></ul><ul><li>Identifies domestic vendors by geography </li></ul><ul><li>Identifies Tier 2 vendors by geography to ensure healthy competition with Tier 1 </li></ul><ul><li>Determines ability of Tier 1 offshore vendors to deliver from varying geographies </li></ul><ul><li>Determines vendors that perform work across the company, for individual SBUs </li></ul><ul><li>Defines consistent sourcing process for SBUs, reducing sourcing cycle </li></ul><ul><li>Defines target supplier mix (Tier 1, Tier 2, MNC) for each sourcing process to generate leverage </li></ul><ul><li>Allows vendor visibility required to provide optimal solutions </li></ul><ul><li>Ensures consistent performance and quality tracking across the organization </li></ul><ul><li>Allows for effective knowledge and best practices transfer among SBUs </li></ul><ul><li>Ensures effective measurement of program’s efficacy </li></ul>Components of a Structured Approach
  8. 8. Agenda <ul><ul><li>Fundamentals in Structuring Outsourcing Engagements </li></ul></ul><ul><ul><li>Factors that effect your successful Outsourcing Initiative </li></ul></ul><ul><ul><li>Implementing a Successful Outsourcing Initiative </li></ul></ul><ul><ul><li>Governance, what is it and why is it important </li></ul></ul><ul><ul><li>Critical Success Factors and Key Take Aways </li></ul></ul>
  9. 9. Are You Ready for Globalization? Globalization Risk Tolerance Index Indicates the organization’s ability to prepare for, mitigate and possibly withstand potential risk factors Globalization Objectives Index Indicates clarity around the benefits of offshoring and the factors that influence globalization decisions Globalization Alignment Index Indicates the company’s ability to implement globalization best practices IT FINANCE OPERATIONS HR LEGAL / COMPLIANCE CUSTOMER SERVICE Corporate Strategy Company Culture Industry Activity Quality Control Cost Savings Risk Profile Social Responsibility Source: neoIT’s Globalization Readiness Index
  10. 10. <ul><li>Misalignment of corporate and globalization strategy </li></ul><ul><li>The internal battles and protection of turf </li></ul><ul><li>No internal expertise in outsourcing or global sourcing </li></ul><ul><li>Underestimating the hidden costs of globalization </li></ul><ul><li>Inadequate evaluation of how to manage the potential risks involved </li></ul>Why its Important to be Prepared And these are only a few examples…
  11. 11. Globalization Strategy - Essential to Have a Globalization Roadmap <ul><li>Execution Roadmap </li></ul><ul><li>Geographic placement </li></ul><ul><li>Ownership model </li></ul><ul><li>Third party supplier relationships </li></ul><ul><li>Transition timing </li></ul><ul><li>Financial return </li></ul><ul><li>Governance organization </li></ul>neoIT GSR Framework Application, Process Portfolio Assessments Financial Assessments Goals, Objectives, Risk, Transformation needs Supplier Landscape, Market Capabilities <ul><li>Globalization Strategy </li></ul><ul><li>Future proofing </li></ul><ul><li>Risk management </li></ul><ul><li>IP Protection </li></ul><ul><li>Transformation </li></ul><ul><li>Service Extension </li></ul><ul><li>Resource redeployment </li></ul><ul><li>Managing Innovation </li></ul>
  12. 12. Globalization Strategy - Defining the Roadmap <ul><li>Asking the right questions… </li></ul><ul><ul><li>What: prioritizing the processes </li></ul></ul><ul><ul><li>Where: understanding and choosing a global location (onshore, offshore, nearshore) </li></ul></ul><ul><ul><li>How: deciding on an ownership model </li></ul></ul><ul><ul><li>When: building a migration plan </li></ul></ul>Globalization Strategy
  13. 13. What: Evaluating the Offshoreability Offshoreable Processes will cut across each layer Migrate
  14. 14. What – Prioritizing the Processes Globalization Matrix Source: neoIT Assessment Methodoloy 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 Qualitative Scores Quantitative Scores Process 2 Process 1 Process 3 Process 4 Cluster N HIGH [Identify Quick-Hits] LOW [Not Targeted] DISAGGREGATE [Long-Term Planned Transformation] AGGREGATE [Selective Sourcing]
  15. 15. Where – Defining the Location Low Medium High India Philippines China Hungary English Proficiency Cultural Compatibility Quality Cost Advantage Educational System Infrastructure Labor Pool Government Support Poland Czech Republic Ireland Canada Russia BPO
  16. 16. Where: Global Sourcing Location Strategy Onshore Nearshore Offshore On-site Team Off-site Team Off-site Team Off-site Team PMO
  17. 17. How – Making the Ownership Decision Transition Time Short Long Upfront Investment Limited High Build Operate Transfer (BOT) Third-Party Dedicated Center Joint Venture Captive Requirements Control Limited Full Value Capture Limited High Build Operate Transfer (BOT) Third-Party Dedicated Center Joint Venture Captive Benefits
  18. 18. When – Execution: Transition Waves Time Start-up costs decline with maturity and steady state is reached sooner Rate of Return Complexity of Process Wave 1 Wave 2 Wave 3
  19. 19. Agenda <ul><ul><li>Fundamentals in Structuring Outsourcing Engagements </li></ul></ul><ul><ul><li>Factors that effect your successful Outsourcing Initiative </li></ul></ul><ul><ul><li>Implementing a Successful Outsourcing Initiative </li></ul></ul><ul><ul><li>Governance, what is it and why is it important </li></ul></ul><ul><ul><li>Critical Success Factors and Key Take Aways </li></ul></ul>
  20. 20. Process Flow The difference in Offshoring is the nature of the dynamic variables that severely impact offshore sourcing outcome Launch Project Finalize Requirements Develop and Issue RFP Contract and Implement Conduct Due Diligence Select and Notify Suppliers Evaluate RFP Responses Select Finalists and Conduct Negotiations Manage Stakeholders (Internal and External) Sourcing Process Source
  21. 21. Evaluating Vendor Options Carreker, TRW, MasterCard Inautica, Sitel, Aviva, P&O Nedloyd GE, Amex, Standard Chartered, AXA Pure Play Offshore BPO “Transaction” Joint Venture Captive Center ACS, Accenture, IBM, Convergys Convergys, Hewitt Infosys, Satyam, Patni, HCL, Wipro EXL,WNS Spectramind, Daksh, ICICI One Source, HTMT Competitive Landscape Pure Play Offshore BPO “Contact” Global Pure Play “ Process” Global IT services Vendors Offshore IT Services Vendors BOT/BTO
  22. 22. Align Key Supplier Selection Criteria with Overall Strategy Sources: Gartner , neoIT
  23. 23. Best Practices: Supplier Due Diligence Culture of Company Domain Experience Performance History Human Resources /Labor Pool Project Management Productivity History Company Culture Fit Market Reputation Infrastructure Transition Process Onsite-Offshore Mix Risk Control Approach Knowledge Management Tools Quality of personnel Commitment of Company Overall Ability Deal Terms Service Levels Geographic Profile Transition Success Strategic Economic Impact Process Improvement Minimum Client Impact Risk Mitigation IP Retention Reduce Cost Increase Capacity Maintain Quality Improve Process Strategic Objectives Tactical Objectives Evaluation Criteria Client Team fully engaged
  24. 24. Sample Decision Model Source 69.00 100 43 60 29.5 45 45 60 18.5 30 30 45 41 60 Supplier 5 67.33 100 47 60 27.5 45 40.5 60 17 30 26 45 44 60 Supplier 4 66.67 100 38 60 31 45 38.5 60 22.5 30 33 45 37 60 Supplier 3 72.33 100 33 60 29 45 43.5 60 26.5 30 37 45 48 60 Supplier 2 0.00 100 0 60 0 45 0 60 0 30 0 45 0 60 Supplier 1 Actual Scored Total Weight Actual Wt Total Wt Actual Wt Total Wt Actual Wt Total Wt Actual Wt Total Wt Actual Wt Total Wt Actual Wt Total Wt Total Components Experience in Similar Projects Resource Capability Organizational & Business Qualifications Performance & Risk Mitigation IT & Physical Infrastructure Solution Proposed Parameters Scores
  25. 25. Implementation Support Knowledge Acquisition Reverse Knowledge Transfer Knowledge Transition Knowledge Acquisition Reverse Knowledge Transfer Knowledge Transition Knowledge Acquisition Reverse Knowledge Transfer Knowledge Transition Management Checkpoint Management Checkpoint Management Checkpoint Strategy People Operations Technology Compliance Complete Portfolio Planning Time Achieve Steady State Stakeholders Involvement Steering Committee Involvement Wave 1 : Accounting Wave 2 : Marketing Wave 2 : Procurement <ul><li>Strategic Goals alignment </li></ul><ul><li>Cultural fit </li></ul><ul><li>Executive Sponsorship support </li></ul><ul><li>Shared vision for objectives </li></ul><ul><li>Team staff and skill allocation </li></ul><ul><li>Onsite / offshore relationships </li></ul><ul><li>Knowledge transfer and documentation </li></ul><ul><li>Governance processes effectiveness </li></ul><ul><li>Work process flow documentation and effectiveness </li></ul><ul><li>Retained organization processes effectiveness </li></ul><ul><li>Network and bandwidth needs </li></ul><ul><li>Redundancy and Latency requirements </li></ul><ul><li>Access Controls </li></ul><ul><li>DR and BCP </li></ul><ul><li>Data Security Policy </li></ul><ul><li>Regulatory Requirements compliance </li></ul><ul><li>Existence of Controls, Checks and Balances </li></ul>
  26. 26. One Organization’s Global Sourcing Story <ul><li>Case Example: A F500 Health & Life Insurance Company </li></ul><ul><ul><li>Very fragmented and inefficient life claims process. No existing manuals or desktop procedures. Each examiner had their version of the process and how the claim amount should be calculated </li></ul></ul><ul><ul><li>Organization bogged down in paper-based calculations full of errors, and no audit trail </li></ul></ul><ul><ul><li>Process output/productivity, accuracy and efficiency were not tracked </li></ul></ul><ul><ul><li>Unable to leverage systems and knowledge to compete in the market against new players </li></ul></ul>Guaranteed Cost Reduction Guaranteed Service Levels & Proven Technology Flexibility & Productivity & Strategic Role Futurize the Business CFO Value Bottom Line Impact 45% Reduction Increased Performance 17.3% on SLA’s Strategic Focus Manage Future Costs CIO CEO
  27. 27. <ul><li>Poor Transition/ Governance. </li></ul><ul><li>Failure to achieve outsourcing process maturity </li></ul><ul><li>Weak process/process mismatch between supplier & client. </li></ul><ul><li>Organization/internal customers-resistance to outsourcing. </li></ul><ul><li>Low employee morale –low productivity </li></ul><ul><li>Employee Attrition </li></ul><ul><li>Internal staff project sabotage </li></ul><ul><li>Unrealistic expectations </li></ul><ul><li>Lack of supplier understanding of client business environment </li></ul><ul><li>Inadequate performance management </li></ul><ul><li>Incorrect/ no job profiling </li></ul><ul><li>Poor control </li></ul>Security Time zone differences Country infrastructure Management challenges Cultural differences Distance to vendor Vendor stability Geo-political concerns Internal Risks –most overlooked External Risks Internal Risks External Risks Challenge is Recognizing & Managing the Various Globalization Risks
  28. 28. Assess Operational Efficiency <ul><li>Key Objectives </li></ul><ul><li>Understand business challenges </li></ul><ul><li>Review and analyze operations </li></ul><ul><li>Improve critical communications </li></ul><ul><li>Compare current state with best practices </li></ul><ul><li>Develop process improvements </li></ul><ul><li>Align executives and corporate strategy </li></ul><ul><li>Determine ROI and cost improvements </li></ul><ul><li>Define a roadmap for the future </li></ul>Healthcheck Framework Assessment of the key objectives will map current and future performance levels, and to current and future risks STRATEGY PEOPLE OPERATIONS TECHNOLOGY RISK & COMPLIANCE … and ensures you will avoid the common pitfalls in globalization
  29. 29. Agenda <ul><ul><li>Fundamentals in Structuring Outsourcing Engagements </li></ul></ul><ul><ul><li>Factors that effect your successful Outsourcing Initiative </li></ul></ul><ul><ul><li>Implementing a Successful Outsourcing Initiative </li></ul></ul><ul><ul><li>Governance, what is it and why is it important </li></ul></ul><ul><ul><li>Critical Success Factors and Key Take Aways </li></ul></ul>
  30. 30. What is Governance? <ul><li>Contract management </li></ul><ul><li>Relationship management </li></ul><ul><li>Performance management </li></ul><ul><li>Resource management </li></ul><ul><li>Financial management </li></ul><ul><li>Includes active involvement of functional managers and managers from allied services like legal, finance, HR, Infrastructure etc . </li></ul>Governance is not mere contract management but is a business process and structure to continuously ensure that the organizational objectives are realized
  31. 31. Need For Governance <ul><li>Often heard statements from client side: </li></ul><ul><li>Not happy with quality of delivery </li></ul><ul><li>Why is there so much turnover? </li></ul><ul><li>Lack of visibility into resource availability </li></ul><ul><li>Not convinced of productivity and performance levels </li></ul><ul><li>What is the delivery process? </li></ul><ul><li>Whom can I escalate to? </li></ul><ul><li>Miscommunications due to differences in culture </li></ul><ul><li>Soft skills mismatch </li></ul><ul><li>Not sure of value of outsourcing </li></ul>
  32. 32. Need For Governance <ul><ul><li>Often heard statements from the supply side: </li></ul></ul><ul><ul><li>Not honoring small commitments which lead to failure in larger ones as well e.g Monday deliverable slips to Tuesday etc. </li></ul></ul><ul><ul><li>Buffer resources not maintained according to contract </li></ul></ul><ul><ul><li>High attrition rate in the vendor team </li></ul></ul><ul><ul><li>Contract Service levels are no longer relevant in current operating model </li></ul></ul><ul><ul><li>Holiday in India and onsite is unaware! </li></ul></ul><ul><ul><li>Applications footprint not updated over time </li></ul></ul>
  33. 33. Governance Model/Framework Expect to invest 5-8% of total spend in governance <ul><li>Service levels – monitoring, reporting </li></ul><ul><li>Schedule management </li></ul><ul><li>Issues in quality </li></ul><ul><li>Offshore workload management </li></ul><ul><li>Process flow for onsite/offshore delivery </li></ul>Performance Management <ul><li>Invoice review </li></ul><ul><li>Budget to actuals </li></ul><ul><li>Expense allocation </li></ul><ul><li>Invoicing procedure </li></ul><ul><li>Change management to base model </li></ul>Financial Management Contract Management <ul><li>Key personnel </li></ul><ul><li>Staffing, attrition </li></ul><ul><li>Background checks, </li></ul><ul><li>Insurance </li></ul><ul><li>DR/BCP plans, readiness </li></ul><ul><li>Reformulate service levels for relevancy </li></ul>Resource Management <ul><li>Retention </li></ul><ul><li>Buffer </li></ul><ul><li>Training </li></ul><ul><li>Vacation, holidays </li></ul><ul><li>Onboarding </li></ul><ul><li>Resource transitions </li></ul><ul><li>Conserve knowledge transfer </li></ul><ul><li>Skills update </li></ul>Relationship Management <ul><li>Client of choice initiatives </li></ul><ul><li>One team </li></ul><ul><li>Track issues to closure </li></ul><ul><li>Bridge culture gaps </li></ul>
  34. 34. Establishing a PMO Contract Management <ul><li>Key personnel Staffing, </li></ul><ul><li>Attrition </li></ul><ul><li>Background checks, </li></ul><ul><li>Insurance </li></ul><ul><li>DR/BCP plans, readiness </li></ul><ul><li>Reformulate service levels for relevancy </li></ul>Financial Management <ul><li>Invoice review </li></ul><ul><li>Budget to actuals </li></ul><ul><li>Expense allocation </li></ul><ul><li>Invoicing procedure </li></ul><ul><li>Change management to base model </li></ul>Performance Management <ul><li>Service levels – monitoring, reporting </li></ul><ul><li>Schedule management </li></ul><ul><li>Issues in quality </li></ul><ul><li>Offshore workload management </li></ul><ul><li>Process flow for onsite/offshore delivery </li></ul>Relationship Management <ul><li>Client of choice initiatives </li></ul><ul><li>One team </li></ul><ul><li>Track issues to closure </li></ul><ul><li>Bridge culture gaps </li></ul>Program Management Office (PMO) <ul><li>Key Objectives: </li></ul><ul><li>Ensure Offshoring Program Success </li></ul><ul><li>Set Strategic Direction for the Program </li></ul><ul><li>Manage Vendor Relationships </li></ul>Resource Management <ul><li>Retention </li></ul><ul><li>Buffer </li></ul><ul><li>Training </li></ul><ul><li>Vacation </li></ul><ul><li>Holidays </li></ul><ul><li>Onboarding </li></ul><ul><li>resource transitions </li></ul><ul><li>Conserve knowledge transfer </li></ul><ul><li>Skills update </li></ul>
  35. 35. Need For Governance <ul><li>Most common reasons for failure to achieve full potential in offshoring </li></ul><ul><ul><li>Lack of executive focus after contract signing </li></ul></ul><ul><ul><ul><li>Change of guard at client executive team </li></ul></ul></ul><ul><ul><ul><li>Change of client business drivers </li></ul></ul></ul><ul><ul><li>Lack of monitoring of performance and deliverables </li></ul></ul><ul><ul><ul><li>Other performance criteria besides service levels </li></ul></ul></ul><ul><ul><ul><li>Quality of service may suffer </li></ul></ul></ul><ul><ul><li>Contract amnesia </li></ul></ul><ul><ul><ul><li>Lack of enforcement leads to complaisance </li></ul></ul></ul><ul><ul><ul><li>Contract loses relevance </li></ul></ul></ul><ul><ul><li>Objectives morph i.e, lose track of original objectives for offshoring </li></ul></ul><ul><ul><ul><li>Objectives drift </li></ul></ul></ul><ul><ul><ul><li>Other than financial – quality improvements, process reengineering </li></ul></ul></ul>
  36. 36. A Framework for Managing Risk Time Readiness Start-up Ramp-up Steady-state Stage 1 Geo-political Country Socio-economic Internal Due diligence Stage 2 Cultural Language Communications Human Capital Legal/Contractual Stage 3 Infrastructure Knowledge Xfer Change Management Portfolio Mgmt Scope Change Project/Process Risk Stage 4 BCP/DRP Security Privacy Pricing Treasury Stage 5 Exit Plan Resources Exit* * may be by design or on contingency 0% 100% T T-6 T+6 T+12 T+18
  37. 37. Program Governance Area: Performance Management - Focus on Day-to-Day Operations Key Issues Addressed: Proper QA process, Workload scheduling, Compliance to terms, Process improvements Key Activities Benefits <ul><li>Analyze trends in Service Levels </li></ul><ul><li>Reorganize work process flow for offshore delivery </li></ul><ul><li>Monitor QA process improvements </li></ul><ul><li>Review workload distribution across resources </li></ul><ul><li>Recommend productivity enhancements </li></ul><ul><li>Perform monthly operations review </li></ul><ul><li>Early indications of problems </li></ul><ul><li>Forecast of shift scheduling </li></ul><ul><li>Maintain focus on quality improvements </li></ul><ul><li>Consistent level of performance levels </li></ul><ul><li>Optimal utilization of resources </li></ul><ul><li>Implementation of global delivery model </li></ul>Engagement Model <ul><li>Frequency: Weekly status calls and monthly operations review </li></ul><ul><li>Roles: </li></ul><ul><ul><li>Supplier: Provide reports covering service levels and analysis of key trends / improvement areas </li></ul></ul><ul><ul><li>neoIT: Review progress, analyze results and suggest areas of improvement </li></ul></ul><ul><ul><li>Client: Ensure Supplier has proper support to plan for necessary process improvements </li></ul></ul>Governance: Performance Management
  38. 38. Key Activities Benefits Engagement Model Program Governance Area: Resource Management – Ensures appropriate staff and skill-sets are utilized properly Key Issues Addressed: Workload scheduling, Compliance to terms <ul><li>Review resource profiles for recruitment </li></ul><ul><li>Monitor on-boarding process </li></ul><ul><li>Ensure smooth transition of key resources </li></ul><ul><li>Review attrition figures and retention strategies </li></ul><ul><li>Monitor skills/new process training </li></ul><ul><li>Assist in employee recognition programs </li></ul><ul><li>Right resource for the right job </li></ul><ul><li>Early on the job productivity </li></ul><ul><li>Attrition management </li></ul><ul><li>Project continuity </li></ul><ul><li>Process specific delivery not people specific </li></ul><ul><li>Knowledge management built for future transitions, if any </li></ul><ul><li>Prepare offshore for growth and moving up the value chain </li></ul><ul><li>Increase individual productivity </li></ul><ul><li>Loyalty to the engagement </li></ul><ul><li>Frequency: Monthly review </li></ul><ul><li>Roles: </li></ul><ul><ul><li>Supplier: Provide reports on resources including profiles, attrition and future staffing plans </li></ul></ul><ul><ul><li>neoIT: Review staffing plans and ensure it meets objectives </li></ul></ul><ul><ul><li>Client: Identify skill-set changes due to process re-design or enhancements </li></ul></ul>Governance: Resource Management
  39. 39. Key Activities Benefits Engagement Model Program Governance Area: Contract Management – Enforces Terms & Conditions which agreed to by all parties and suggests updates contract when necessary Key Issues Addressed: Proper QA process, Compliance to terms, Business Continuity Assessment <ul><li>Track adherence to Service Levels </li></ul><ul><li>Redefine Service Levels for relevance </li></ul><ul><li>Review Disaster Recovery/Business Continuity planning / testing </li></ul><ul><li>Review compliance to insurance requirements </li></ul><ul><li>Ensure HIPAA compliance/data security </li></ul><ul><li>Track volume levels for pricing model triggers </li></ul><ul><li>Monitor sufficiency of connectivity/infrastructure </li></ul><ul><li>Contract compliance </li></ul><ul><li>Ensuring Service Levels are a true reflection of vendor performance </li></ul><ul><li>Recommend new Service Levels for raising the bar </li></ul><ul><li>Ensure planning for 24/7 365 days operations </li></ul><ul><li>Mitigate regulatory risk </li></ul><ul><li>Achieve next level of economy of scale of outsourcing </li></ul><ul><li>Ensure offshore center availability </li></ul><ul><li>Frequency: Monthly review as needed; Quarterly on most occasions </li></ul><ul><li>Roles: </li></ul><ul><ul><li>Supplier: Ensure contractual commitments are met </li></ul></ul><ul><ul><li>neoIT: Provide oversight and periodically review operations to ensure contract compliance </li></ul></ul><ul><ul><li>Client: Redefine Service Levels in case of system or process changes, if needed </li></ul></ul>Governance: Contract Management
  40. 40. Key Activities Benefits Engagement Model Program Governance Area: Financial Management provides a proper checks and balance system as well as assurance that financial goals are being met Key Issues Addressed: Compliance to terms, Growth planning <ul><li>Facilitate renegotiation of pricing model when triggered by volumes </li></ul><ul><li>Validate one-time expense allocations </li></ul><ul><li>Help modify pricing model for moving up the value chain </li></ul><ul><li>Track financial results to base case </li></ul><ul><li>Value for money, quality, flexibility </li></ul><ul><li>Industry benchmarking of market rates </li></ul><ul><li>Proper utilization of allotted one-time costs </li></ul><ul><li>Improved global sourcing </li></ul><ul><li>Understand if financial goals are being realized </li></ul><ul><li>Frequency: Monthly review, Quarterly for financial results </li></ul><ul><li>Roles: </li></ul><ul><ul><li>Supplier: Ensure proper invoicing based on rate table </li></ul></ul><ul><ul><li>neoIT: Ensure pricing structure is adhered to based on agreement, quarterly financial results benchmarked to base case </li></ul></ul><ul><ul><li>Client: Provide timely delivery of payments; provide quarterly financial reports </li></ul></ul>Governance: Financial Management
  41. 41. Key Activities Benefits Engagement Model Program Governance Area: Relationship Management - Allows for Alignment of Goals and Objectives for All Stakeholders Key Issues Addressed: Issue resolution, Process improvements, Growth planning <ul><li>Maintain vendor’s focus on client as ‘Client of Choice’ </li></ul><ul><li>Ensure continuity of clear organization escalation path on both sides </li></ul><ul><li>Track issue logs and days to closure </li></ul><ul><li>Clear up any cultural miscommunications </li></ul><ul><li>Facilitate offshore-onsite interactions </li></ul><ul><li>Executive level of vendor remains involved on engagement </li></ul><ul><li>Avoid issue accumulation due to executive level changes </li></ul><ul><li>Early issue resolution </li></ul><ul><li>Seamless integration of client and supplier </li></ul><ul><li>‘ One Team’ atmosphere </li></ul><ul><li>Frequency: Ongoing </li></ul><ul><li>Roles: </li></ul><ul><ul><li>Supplier: Ensure continuous delivery of value to Client </li></ul></ul><ul><ul><li>neoIT: Promote one team culture across all stakeholders </li></ul></ul><ul><ul><li>Client: Include all parties in key decisions impacting operations (where applicable and necessary) </li></ul></ul>Governance: Relationship Management
  42. 42. Inaction leads to course corrections and reassessments midway through initiatives <ul><li>Service Providers – “We need to reduce time on managing Service Providers” </li></ul><ul><li>Ensuring Best Practices are applied </li></ul><ul><li>Providing similar internal relationship management structure </li></ul><ul><li>Slippage in Project Deadlines </li></ul><ul><li>High amount of re-work – arising from quality issues or from output alignment </li></ul><ul><li>Lack of proper work estimation – “How can we minimize the iterations on our work estimates?” </li></ul><ul><li>Poor Quality Assurance & Control </li></ul><ul><li>Communication styles – “There always seems to be misinterpretation on what the output looks like” </li></ul><ul><li>Work styles – “They never question us on things” </li></ul><ul><li>Holidays </li></ul><ul><li>Lack of visibility – “I don’t know if the resources I have can do more work within the contracted time” </li></ul><ul><li>Limited reporting capability </li></ul><ul><li>Minimal oversight at the service provider location </li></ul>“ We need to improve our credibility to deliver” Potential Challenges Process Sharing and Efficiency Delivery Issues Cultural Differences Resource Utilization
  43. 43. Key Governance Activities <ul><ul><li>Personal interaction/email/phone calls </li></ul></ul><ul><ul><li>Weekly scheduled conference calls with vendor </li></ul></ul><ul><ul><li>Regular conference calls with client management </li></ul></ul><ul><ul><li>Monthly Operational reviews at vendor delivery location </li></ul></ul><ul><ul><li>Monthly report to client </li></ul></ul><ul><ul><li>Facilitate quarterly client audits </li></ul></ul><ul><ul><li>Client visits to vendor delivery location </li></ul></ul><ul><ul><li>  Annual performance and contract reviews </li></ul></ul><ul><ul><li>  Issue resolution – ongoing basis </li></ul></ul>
  44. 44. The Results <ul><ul><li>Improved Quality and Service </li></ul></ul><ul><ul><ul><li>Faster cycle times were achieved and claims are now resolved more quickly via a &quot;follow-the-sun&quot; time-zone approach to work shifts </li></ul></ul></ul><ul><ul><ul><li>Improved quality of internal processes and service levels </li></ul></ul></ul><ul><ul><li>Reduced Risk </li></ul></ul><ul><ul><ul><li>Improved business continuity by desegregating the work across global physical centers </li></ul></ul></ul><ul><ul><li>Maximized Cost Savings </li></ul></ul><ul><ul><ul><li>Dramatic cost savings, breakeven by 7 months and 37 % by month 15. </li></ul></ul></ul><ul><ul><li>Access to Global Resources </li></ul></ul><ul><ul><ul><li>Access to the best talent in the world </li></ul></ul></ul><ul><ul><ul><li>Additional flexibility to scale up and down based on market demands </li></ul></ul></ul><ul><ul><li>Global Expansion </li></ul></ul><ul><ul><ul><li>Access to global markets: many clients are multinational in nature and an “in-country” presence is often required to sell products and services </li></ul></ul></ul>
  45. 45. The Challenges Along the Way <ul><ul><li>Organizational Buy-In </li></ul></ul><ul><ul><li>People Issues </li></ul></ul><ul><ul><ul><li>Change management </li></ul></ul></ul><ul><ul><ul><li>Integrating onshore and offshore teams </li></ul></ul></ul><ul><ul><ul><li>High levels of end user contact required </li></ul></ul></ul><ul><ul><ul><li>Cultural integration </li></ul></ul></ul><ul><ul><li>Supplier Concerns </li></ul></ul><ul><ul><ul><li>Data Privacy and Security </li></ul></ul></ul><ul><ul><ul><li>Business Continuity </li></ul></ul></ul><ul><ul><ul><li>Ownership of Information </li></ul></ul></ul><ul><ul><ul><li>Reporting </li></ul></ul></ul><ul><ul><li>Location Challenges </li></ul></ul><ul><ul><ul><li>Regulatory environment </li></ul></ul></ul><ul><ul><ul><li>Location infrastructure immaturity </li></ul></ul></ul>
  46. 46. Steady State Activities <ul><li>Activities </li></ul>Program Management Areas Closure review SL trend analysis SL measurement Quality issues Workload distribution Timekeeping/ reporting Performance Management Benchmarking reviews Annual performance reviews Issue resolution – as needed Quarterly contract reviews Monthly operation reviews Weekly calls Emails/phone calls Teaming between client and vendor Bridge the communication gap Educate both on missed nonverbal cues Review invoices Changes to base case Budget vs actual spend Productivity improvements Contractual impact Key personnel Updating application footprint Physical and data security DR/BCP testing, site review Productivity On-boarding process Buffer, retention rates Training and experience level Skills forecast and update Personal interaction Relationship Management Financial Management Contract Management Resource Management
  47. 47. Agenda <ul><ul><li>Fundamentals in Structuring Outsourcing Engagements </li></ul></ul><ul><ul><li>Factors that effect your successful Outsourcing Initiative </li></ul></ul><ul><ul><li>Implementing a Successful Outsourcing Initiative </li></ul></ul><ul><ul><li>Governance, what is it and why is it important </li></ul></ul><ul><ul><li>Critical Success Factors and Key Take Aways </li></ul></ul>
  48. 48. Best Practices - Defining the Business Case Company Culture Affinity for outsourcing & globalization including past experiences Quality Need for consistent quality and service levels Risk Manage stability, security, privacy, volatility, etc. Control Ownership preference as influenced by risk & culture factors Cost Savings Need for reducing cost or fundamentally altering business model Corporate Strategy Business plan, goals and results expected-acquisition, cost structure, growth, flexibility, risk aversion, profitability, cash etc. Social Responsibility Issues related to job loss, globalization, employee upheaval, etc. Industry Activity Offshore actions of competitors and industry players Globalization Strategy & Readiness Framework Source: neoIT <ul><ul><li>Ensure that business strategy drives services globalization </li></ul></ul><ul><ul><li>Why are you looking at globalization? </li></ul></ul><ul><ul><li>What part of your business strategy does it help you execute? </li></ul></ul><ul><ul><li>Is the organization ready for this? </li></ul></ul>
  49. 49. Best Practices - Striving for Optimum Balance Risk Cost Savings Quality Control Sourcing Objectives
  50. 50. Best Practices - Envisioning the End State F&A IT Customer Service Marketing Supplier B Supplier A HR IT Customer Service Supplier C Customer Service China? Marketing Supplier D Supplier E Captive 3 rd Party <ul><li>Key Outputs: </li></ul><ul><li>Geographic blend </li></ul><ul><li>Captive/3 rd Party blend </li></ul><ul><li>Process/sub process allocation </li></ul><ul><li>Transition plan </li></ul><ul><li>Skill set definition </li></ul><ul><li>Change management plan </li></ul><ul><li>Governance model </li></ul><ul><li>Risk mitigation approach </li></ul><ul><li>Key Inputs: </li></ul><ul><li>Financial objectives </li></ul><ul><li>Service objectives </li></ul><ul><li>Skill set inventory </li></ul><ul><li>Risk profiling </li></ul><ul><li>Market/Supplier expertise </li></ul><ul><li>Market conditions </li></ul><ul><li>Organizational readiness </li></ul>Internal
  51. 51. <ul><ul><li>Share a belief that planning and lifecycle management is important to long term success </li></ul></ul><ul><ul><li>Believe that a rigorous process, models and data should drive decision-making </li></ul></ul><ul><ul><li>Develop a long term road-map and governance ensures adherence to plan </li></ul></ul>Best Practices - Adopting a Rigorous Lifecycle Approach
  52. 52. How to Best Leverage Global Sourcing! <ul><li>Guiding Principles </li></ul><ul><ul><li>Ensure internal alignment and support at the executive management layer is obtained to seriously evaluate offshoring </li></ul></ul><ul><ul><li>Develop a strong project team made up of “A” players </li></ul></ul><ul><ul><li>Get organized up-front and “begin with the end in mind” </li></ul></ul><ul><ul><li>Focus on the real business objectives and how sourcing (outsourcing and offshoring) can help address them </li></ul></ul><ul><ul><li>Develop the approach and process to survey the market and execute </li></ul></ul><ul><ul><li>Build a “Business Case” through an assessment </li></ul></ul><ul><ul><li>Don’t approach the marketplace until you are prepared </li></ul></ul><ul><ul><li>Manage risks and culture on ALL sides of the ocean </li></ul></ul>
  53. 53. Critical Success Factors <ul><ul><li>Internal Buy-in </li></ul></ul><ul><ul><ul><li>Organization needs to undertake a realistic internal assessment of their ability and readiness to pursue and scale-up complex initiatives </li></ul></ul></ul><ul><ul><li>Accountability </li></ul></ul><ul><ul><ul><li>PMO Owner is ultimately accountable for success of offshore initiative </li></ul></ul></ul><ul><ul><ul><ul><li>Ensures accountable resources are identified for project management and execution </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Ensures execution synchronization of schedules and plans for all project constituents </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Ensures synchronization and linkage with the Client Business and Operations groups </li></ul></ul></ul></ul><ul><ul><li>Responsibility </li></ul></ul><ul><ul><ul><li>Program Leadership has responsibility for communicating aggregate project reporting, risk and issue escalation </li></ul></ul></ul><ul><ul><ul><ul><li>LOB IT must determine what technology related measures must be tracked, measured and communicated regarding progress on off shoring </li></ul></ul></ul></ul><ul><ul><li>Leverage Role of Influencers </li></ul></ul><ul><ul><ul><li>While nominating manager/individuals to staff appropriate </li></ul></ul></ul><ul><ul><ul><ul><li>Partnership developed through clear definition of roles and responsibilities at project level </li></ul></ul></ul></ul><ul><ul><li>Life Cycle Commitment </li></ul></ul><ul><ul><ul><li>Senior level involvement and attention dwindles over time, typically in the 2 nd year (known as the “the steady state”) </li></ul></ul></ul><ul><ul><ul><li>Despite comprehensive plans, contractual clauses for service provider to enhance productivity and to provide additional value, such obligations are neither proactively monitored for positive results nor are they pursued </li></ul></ul></ul><ul><ul><li>Definition of Roles & Staffing of Governance Team </li></ul></ul><ul><ul><ul><li>Role definition needs to permeate beyond the three layers of governance (Organizational, Functional, Operational) </li></ul></ul></ul><ul><ul><ul><ul><li>Each team member has a defined role and set of responsibilities that outlines their contribution to ensure effective relationship controls and performance </li></ul></ul></ul></ul><ul><ul><li>Investment in time and effort </li></ul></ul><ul><ul><ul><li>Operating staff and management should allocate approximately 15% to 28% of time and effort </li></ul></ul></ul><ul><ul><ul><li>Management Level (CXO) should allocate approximately 5% of time and effort </li></ul></ul></ul><ul><ul><li>Adequate Governance Budget </li></ul></ul><ul><ul><ul><li>In addition to time and budget, organizations should budget approximately 5% to 8% of their overall initiative expenditure on governance </li></ul></ul></ul>
  54. 54. 4 Key Take Aways <ul><ul><li>Lack of attention can lead to costly setbacks for globalization initiatives </li></ul></ul><ul><ul><li>The globalization industry is constantly changing </li></ul></ul><ul><ul><li>Adopt a rigorous Globalization Lifecycle </li></ul></ul><ul><ul><li>A healthy globalization initiative requires a strategic check that accounts for strategy, people, operational, technology and compliance components </li></ul></ul>1 1 1 2 1 3 1 4
  55. 55. Contact Information Chas R. Mullins Managing Director [email_address] 816.213.1171 neoIT Global Headquarters 2603 Camino Ramon, 2nd Floor San Ramon, CA  94583 USA neoIT Asia Headquarters 210, Bellary Road Upper Palace Orchards Bangalore - 560 080 India neoIT Philippines 8/F Pacific Star Building Senator Gil Puyat Ave. cor Makati Ave. Makati City, Metro Manila, 1200, Philippines
  56. 56. Key Assessment Questions - HR <ul><ul><li>Expatriate policy (process checklists/ agreements/service delivery) </li></ul></ul><ul><ul><li>Expatriate pay (compensation, benefits, allowances, contracts ? </li></ul></ul><ul><ul><li>Expatriate tax </li></ul></ul><ul><ul><li>Visa </li></ul></ul><ul><ul><li>Inter-cultural Training </li></ul></ul><ul><ul><li>Relocation </li></ul></ul><ul><ul><li>Foreign national staffing/ search </li></ul></ul><ul><ul><li>Foreign national compensation & benefits </li></ul></ul><ul><ul><li>Foreign national orientation, training, communication </li></ul></ul><ul><ul><li>Foreign national performance management </li></ul></ul><ul><ul><li>Foreign national succession/human resource planning </li></ul></ul><ul><ul><li>International Travel Policy & Security </li></ul></ul>Does the company have international HR capabilities or vendors to manage the following areas? Source: Foote Partners Q Q
  57. 57. Key Assessment Questions - Support <ul><ul><li>Senior Management? </li></ul></ul><ul><ul><li>Business Units? </li></ul></ul><ul><ul><li>IT Department(s)? </li></ul></ul>What is the level of support for offshore outsourcing from the following? (none <-------> very high) Is this plan to offshore outsource sponsored by top management in conjunction with middle management? Source: Foote Partners Q Q Q Q
  58. 58. Key Assessment Questions - History <ul><ul><li>Lack of user buy-in/acceptance </li></ul></ul><ul><ul><li>Lack of executive sponsorship </li></ul></ul><ul><ul><li>Lack of SMEs </li></ul></ul><ul><ul><li>Vendor issues: insufficient resources, inexperienced planning </li></ul></ul><ul><ul><li>Miscommunication </li></ul></ul><ul><ul><li>Cultural gaps </li></ul></ul><ul><ul><li>Poor planning / change management </li></ul></ul><ul><ul><li>Deficiencies in coordination between team organization and task(s) execution </li></ul></ul><ul><ul><li>Role confusion or ambiguity on project teams </li></ul></ul><ul><ul><li>Unclear definition of client / supplier roles </li></ul></ul><ul><ul><li>Transition too fast </li></ul></ul><ul><ul><li>Resources pitched in a contract are not same working in deal </li></ul></ul><ul><ul><li>Buffer staff not hired </li></ul></ul><ul><ul><li>Training program mismanagement </li></ul></ul><ul><ul><li>Transition resources not hired </li></ul></ul><ul><ul><li>High turnover </li></ul></ul>Is there evidence of any of the following in the history of significant projects, transitions, or change efforts in your company? Source: Foote Partners Q Q
  59. 59. Key Assessment Questions - Offshoring Competency <ul><ul><li>Does your company have an extremely lean staff? </li></ul></ul><ul><ul><li>Has your company successfully managed an offshore project? </li></ul></ul><ul><ul><li>Has your company successfully managed an outsourcing project? </li></ul></ul><ul><ul><li>Has your company successfully launched an international subsidiary? </li></ul></ul><ul><ul><li>Does your company have existing operations in offshore target countries? </li></ul></ul><ul><ul><li>Does your company have access to an experienced and competent: </li></ul></ul><ul><ul><ul><li>Internal organizational development staff? </li></ul></ul></ul><ul><ul><ul><li>International HR staff? </li></ul></ul></ul><ul><ul><ul><li>Employee communications staff? </li></ul></ul></ul><ul><ul><li>Does your company have global management experience in: </li></ul></ul><ul><ul><ul><li>Intercultural training and teambuilding? </li></ul></ul></ul><ul><ul><ul><li>Managing distance/distributed functions? </li></ul></ul></ul>Have any of the following occurred in your company? Do any of the following represent accurate depictions? Source: Foote Partners Q Q
  60. 60. Key Assessment Questions <ul><ul><li>Comprehensive HR strategy for offshore outsourcing </li></ul></ul><ul><ul><li>HR risk assessment for offshore outsourcing </li></ul></ul><ul><ul><li>International Human Resources assessment for offshore outsourcing </li></ul></ul><ul><ul><li>Change readiness assessment for offshore outsourcing </li></ul></ul><ul><ul><li>Organizational change management assessment for offshore outsourcing </li></ul></ul><ul><ul><li>Organizational risk assessment for offshore outsourcing </li></ul></ul><ul><ul><li>Comprehensive organization strategy for offshore outsourcing </li></ul></ul><ul><ul><li>Communication strategy and management for offshore outsourcing </li></ul></ul><ul><ul><li>Communication risk assessment for offshore outsourcing </li></ul></ul>Has your company accomplished the following? Source: Foote Partners Q Q

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