Offshoring devlearn10

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Offshoring devlearn10

  1. 1. Outsourcing and Offshoring Your eLearning Development Bruce Gabor, PMP Manager, Learning Projects and Solutions Global Tax Human Resources, KPMG International Adrian Celentano, PMP Head of Learning and Development, Performance and Technology Global Advisory Group, KPMG International
  2. 2. In this session you will learn: • About the myths and misconceptions of using offshoring • Current industry trends related to offshoring development • What must be taken into account when you are considering an offshore provider • Methodologies and approaches to managing offshore development • How to make the business case for or against offshore development Session Objectives Welcome
  3. 3. Starter Questions Welcome 1. How many people are currently offshoring their learning development? 2. How many people are giving serious consideration to offshoring their learning development? 3. If you are considering offshoring your development... why?
  4. 4. What is Offshoring? Welcome You are here Your work is here... Or here... Or here You and your work may not be on the same continent. Or even in the same hemisphere
  5. 5. Expected outcomes of offshoring your learning development: • It’s cheaper • It’s faster • It’s easier • Quality is better Placeholder Thoughts Welcome
  6. 6. Industry Trends
  7. 7. Top 5 and Next 5 Offshore Nations Industry Trends 6. Canada 7. Russia 8. Mexico 9. Vietnam 10. Poland 1. India 2. The Philippines 3. China 4. Ireland 5. Brazil
  8. 8. Top 8 Global Outsourcing Cities Industry Trends 1.Bangalore, India 2.Delhi, India 3.Mumbai, India 4.Manila, The Philippines 5.Dublin, Ireland 6.Chennai, India 7.Hyderabad, India 8.Pune, India 2009 Global Services-Tholons
  9. 9. Current Trends Industry Trends Where are we now? • Training offshoring and outsourcing is about leveraging skills and capabilities • Training offshoring deals are getting smaller • Administration and content development are the most common processes offshored • Standalone training offshoring deals are the norm
  10. 10. 2010 Facts and Figures Industry Trends Of the companies surveyed, what percentage chose to outsource individual parts of their learning function rather than the entire function? 97% What were the most frequently outsourced learning activities? Training Delivery 41% Content Design 38% Which practitioners were most likely to use outsourcing? Government 69% Financial Services 56% Manufacturing 52% Education 35%2010 Chief Learning Officer report: Focus on Outsourcing
  11. 11. Spending Trends Industry Trends What percentage of budgets do learning organizations spend on outsourcing? 2009 26.4% 2010 23.5% Will outsourcing spend remain the same in 2011? Decrease 20% Remain the same 43% Increase 37% 2010 Chief Learning Officer report: Focus on Outsourcing
  12. 12. Future Trends Industry Trends Where are we going? • Multi-sourcing - using more than one offshore provider • Renegotiation is a standard operating procedure • Death of the mega deals • Offshoring to US? (declining dollar) • Increased offshoring by local and state governments 2010 cio.com: Outsourcing Trends to Watch in 2010 *2010 clomedia.com: When, Why and What to Outsource
  13. 13. Offshoring in India Industry Trends Is there a future in offshoring in India? It depends upon who you’re talking to. • “Wages are on the rise” According to Forbes.com cost advantage used to be 1:6. Today it is estimated at 1:3. Expected to be 0 by 2015 • “Where is the expertise?” General thought, India executes services and does not invent its own products • “Availability of skills” The greater demand for workers will dilute the talent pool • “It’s more difficult than it’s worth” Communication problems and cultural differences will hinder development
  14. 14. Real World Challenges
  15. 15. Overview Real World Challenges Many challenges with offshore development can be broken down into 3 main areas: • Operations • Delivery • Engagement
  16. 16. When thinking operations, consider: • Time zone • Critical response approach • Purchasing/procurement policies • IP ownership • Tax implications • Fluctuating payment currency Considerations Real World Challenges
  17. 17. When thinking delivery, consider: • Project management processes and methodology • Standards definitions • Concept and requirements definitions When thinking engagement, consider: • Privacy of information protection • Your offshoring partner sub contracting to other vendors Considerations Real World Challenges
  18. 18. Consider: • Developing evaluation criteria • Their expertise in development and content creation (resources and experience) • Scalability - the ability to handle required development volume • Business sustainability • Business history • Identifying technology standards • Running a pilot - how do they manage their projects? Picking an Offshore Partner Real World Challenges
  19. 19. Managing Offshore Developments
  20. 20. Project Management Processes Managing Offshore Developments You need good project management processes for: • Setting expectations and clarity • Escalations • Contracts • Managing the project manager • Maintenance and warranty support • Communication of scope
  21. 21. Cultural Diversity Managing Offshore Developments One of the largest challenges with offshore development is cultural differences. • Understand the culture of your offshore team - Acceptable vs offensive actions - Humour • Culture vs work culture • Language barriers
  22. 22. Communications Managing Offshore Developments Clear and effective communication will make or break a project. • Identify communication lines before you begin • Ensure your are working with a strong team leader - Single point of contact - Responsible for all updates and reports - Mitigate the risk of miscommunication • Take nothing for granted - Explain... listen... explain... listen, verify understanding
  23. 23. Building Relationships Managing Offshore Developments How do you build a strong, trusting, relationship that will survive reduced budgets, compressed timelines and scope creep? • Giving respect commands respect • Work as a single team • Know all team members and praise accordingly • Celebrate landmarks together
  24. 24. Building a Business Case
  25. 25. Let’s revisit those initial thoughts. Offshoring your learning development is: • Cheaper • Faster • Easier • Better quality Placeholder Thoughts Building a Business Case Yes, there are potential rate card/project fee advantages. Often it is. Yet there may be a high risk to quality and time zone differences may increase project timelines. Not always. Project managing over a distance requires a higher degree of discipline and organization. Not always. Vendor quality is generally independent of geography.
  26. 26. Typically, cost savings are the biggest factor that drives the business case. But also consider: • Your organization’s project management cost • The risk of delivering a successful project on time/on budget • The risk of delivering a quality product • Maintenance and support • Impact on internal resources Driving Your Business Case Building a Business Case
  27. 27. 5 Key elements of developing an offshore business case: • A scenario analysis must be conducted • Establish a clear link between each benefit “cause” and “effect” • Identify the operational performance indicator (OPI) for each benefit • Risk of no investment • Align the business case with the company’s strategic goals 2008 Glomark-Governan: Five Key Elements to Include in a Compelling Outsourcing Business Case Create a Compelling Business Case Building a Business Case
  28. 28. Q & A Bruce Gabor, PMP Adrian Celentano, PMP http://www.slideshare.net/devlearn10/offshoring-devlearn10

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