Designing a globally competitive, cost efficient US IT Services model<br />Presented by:<br />Debashish Sinha<br />Chief M...
Introducing Systems In Motion<br /><ul><li>Launched in 2009 by leaders in global technology services
Backed by Cervin Ventures with ~$17 million in available capital
Leading the way in services focused on business technology transformation programs
Pioneering the ‘Inshore’ service model - an agile, integrated, cost-optimized US service delivery capability
Based on standards and best practices of remote service delivery, with strong focus on workforce training and development
Deep expertise in Media, Telecom, Retail and Manufacturing
Two current service centers
Silicon Valley (Innovation Hub)
Ann Arbor (Delivery Center)
Clients include F-500 (Thomson Reuters, Best Buy) mid-sized enterprises (Leap Frog, Matson) and high-performing growth com...
Leadership team with deep experience in global services industry<br />Page 3<br />Copyright © 2010 Systems In Motion. All ...
New technology trends are forcing business transformation <br />Traditional models	<br />Industry evolution<br /><ul><li>H...
Multi-channel (web, social, mobile, etc.)
Customer engagement management (personalization, participation and control
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Systems In Motion IAOP Presentation

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This presenation discusses Systems In Motion's Domestic Outsourcing business model and describes Systems In Motion' innovative enterprise technology services capability that is more agile and cost-effective than globally distributed (offshore) service delivery.

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Systems In Motion IAOP Presentation

  1. 1. Designing a globally competitive, cost efficient US IT Services model<br />Presented by:<br />Debashish Sinha<br />Chief Marketing Officer<br />Colin Chapman<br />VP and GM, Michigan DC<br />June 24, 2010<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  2. 2. Introducing Systems In Motion<br /><ul><li>Launched in 2009 by leaders in global technology services
  3. 3. Backed by Cervin Ventures with ~$17 million in available capital
  4. 4. Leading the way in services focused on business technology transformation programs
  5. 5. Pioneering the ‘Inshore’ service model - an agile, integrated, cost-optimized US service delivery capability
  6. 6. Based on standards and best practices of remote service delivery, with strong focus on workforce training and development
  7. 7. Deep expertise in Media, Telecom, Retail and Manufacturing
  8. 8. Two current service centers
  9. 9. Silicon Valley (Innovation Hub)
  10. 10. Ann Arbor (Delivery Center)
  11. 11. Clients include F-500 (Thomson Reuters, Best Buy) mid-sized enterprises (Leap Frog, Matson) and high-performing growth companies (Chegg, Zephyr)</li></ul>Page 2<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  12. 12. Leadership team with deep experience in global services industry<br />Page 3<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  13. 13. New technology trends are forcing business transformation <br />Traditional models <br />Industry evolution<br /><ul><li>Highly dynamic business cycles
  14. 14. Multi-channel (web, social, mobile, etc.)
  15. 15. Customer engagement management (personalization, participation and control
  16. 16. Predictable, repeatable business cycle
  17. 17. Brick & mortar + web interface
  18. 18. Customer interaction management</li></ul>Business Environment<br /><ul><li>Buy, install and run yourself
  19. 19. License, maintenance and upgrade extra
  20. 20. On-premise with multiple versions
  21. 21. Rented applications
  22. 22. Pay-go model with automatic upgrades
  23. 23. Platform based architecture (PaaS, SaaS)</li></ul>IT Applications<br /><ul><li>Cloud infrastructure
  24. 24. No capex and low cost of ownership
  25. 25. On-demand scaling with agile deployment
  26. 26. Traditional Datacenters
  27. 27. Capital intensive
  28. 28. Difficult to implement and scale</li></ul>IT Infrastructure<br /><ul><li>Expertise intensive engagement
  29. 29. Flexible, agile service delivery
  30. 30. Outcome and value driven
  31. 31. Labor intensive engagements
  32. 32. Standardized processes
  33. 33. Effort and SLA driven contracts</li></ul>Sourcing<br />Significant potential for disruption in the competitive landscape<br />Excellence in customer experience will be the hallmark of future industry leaders<br />Page 4<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  34. 34. Agile & Integrated<br />Business Aligned<br />New technology transformation<br />Outcomes Driven<br />Solutions Oriented<br />Cost effective operations<br />Driving the need for a different kind of service partnership<br />Le<br />Leadership and experience in understanding business requirements<br />Agile teams tightly integrated with customer <br />Solution frameworks to accelerate technology deployment<br />Focus on outcomes and strategic value of new technology initiatives<br />Page 5<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  35. 35. Global service delivery models fail to drive value in these relationships<br />Global Delivery Challenges<br /><ul><li>Domain and process knowledge
  36. 36. Technical competence
  37. 37. Resource productivity
  38. 38. Communication challenges
  39. 39. Lack of interaction/integration
  40. 40. Flexibility/agility of teams
  41. 41. Program management and governance
  42. 42. Infrastructure cost
  43. 43. Risk management</li></ul>Enterprises make significant investments to bridge the “value gap” in the global delivery model. This is likely to increase in the future.<br />Page 6<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  44. 44. ‘Inshore’ model can provide an alternative to global delivery for a significant part of enterprise services sourcing strategy<br />Inshoring fills a white space between in-house and offshore engagements that is currently sub-optimally filled by supplemental staffing, boutique firms or large onshore staff of offshore vendors<br />Page 7<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  45. 45. Three strategic pillars of the Systems In Motion service model<br />The new service paradigm combines deep domain leadership with an ecosystem of IP assets and an operating model that can create agile and integrated delivery teams <br />Page 8<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  46. 46. Dedicated centers of excellence pyramid structure for service delivery builds scale and efficiency<br />Typical Resource Profile<br /><ul><li>Over 12 years of business-IT experience
  47. 47. Program management, technical, solutions architecture and/or leadership skills
  48. 48. Experience in operating models incl. global delivery
  49. 49. Strong focus on methodology and IT processes
  50. 50. Specialist in business or technology domain</li></ul>Program Leads<br />Optimized Pyramid Model<br /><ul><li>Over 5 years of IT experience
  51. 51. Process, technical, architecture skills
  52. 52. Strong implementation and support experience
  53. 53. Understanding of business or technology domain</li></ul>Technical/Functional Experts<br /><ul><li>Educational background in IT
  54. 54. Process, technical skills
  55. 55. Strong fundamentals in primary area of expertise
  56. 56. Knowledge of IT lifecycle</li></ul>Developers, Test and Support Engineers<br />* Pyramid structure and skills will vary based on stage of project, type of work (dev vs. support), and program duration<br />Page 9<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  57. 57. Tightly integrated service operation through ‘Inshore’ centers of expertise <br />‘Inshore’ center of expertise is a US based domestic service delivery model, combining cost-efficient remote service delivery with strong local workforce development and management <br />Page 10<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  58. 58. US resources have a competitive advantage over India in supporting this transformation in technology services<br />While India produces a larger number of engineers, the US has higher level engineering resources. India produces 84% of their engineers from Tier 3 schools.<br />US engineers get a significantly more intensive education, are more self-directed and can lead/work in teams<br />Research by RafiqDossani, Director, Center for South Asia, Stanford University<br />Page 11<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  59. 59. Strong partnership among business, education and government to create the right environment<br />Universities<br />Government/Economic Dev Agencies<br /><ul><li>Quality and relevant education in engineering, science, math and management
  60. 60. Drive greater business participation in coursework, especially in associate degree apprenticeship programs (EMU)
  61. 61. Provide the hub for business connect (U of M and EMU)
  62. 62. Support business with infrastructure and processes for training and development
  63. 63. Vertical integration of Local and State institutions (MEGA, Michigan Works, SPARK)
  64. 64. Invest in training, talent development and workforce management
  65. 65. Invest in incentive programs (tax incentives and OJT training reimbursements)
  66. 66. Co-invest in marketing and PR initiatives to drive location attractiveness
  67. 67. Business development support with local enterprises
  68. 68. Partner in building SIM University (EMU)</li></ul>Systems In Motion partners with government to provide the right incentive and infrastructure investments <br />Systems In Motion partners with universities to provide talent, training and workforce development support <br />Page 12<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  69. 69. True cost of service delivery Inshore vs. Offshore<br />Significant wage difference equals a negligible cost of service difference<br />5<br />4<br />2<br />3<br />1<br />$55/hr (with transition)<br />$48/hr (in steady state)<br />$52/hr<br />Travel Costs are negligible<br />Travel<br />&1.17<br />4 trips a year<br />Program Management costs are negligible<br />Transition $2.00<br />PMO<br />$2.25<br />5% of $44.88<br />Inshore Center Blended Charge Rates<br />$50.00<br />Transition Costs are 30% due to faster transition process, higher overall productivity<br />Transition* <br />$6.73<br />15% of $44.88 <br />Hourly true cost of services delivered<br />(App Dev/BI Example)<br />Productivity<br />$5.76<br />75% of $17.28<br />Productivity Factor is 25% lower in offshore model<br />Onsite Rate<br />$21.84<br />28%@$78.00<br />Inshore Center charge rate combines offshore, onsite and infrastructure costs<br />Offshore Rate$17.28<br />72%@$24.00<br />Global Delivery Model<br />Inshore Delivery Model<br />* Offshore transition amortized over a 3-year contract<br />Page 13<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  70. 70. Key Takeaways<br />New technology trends are transforming the business environment<br />Enterprises need service partners with deeper domain expertise, and tighter alignment with internal IT and business stakeholders<br />Global delivery models will need higher caliber resources, and even greater program management and governance investments to meet the future needs of US enterprises<br />A well-structured Inshore operations center can be very competitive <br />Requires strong collaboration among business, education and government to develop the appropriate level of expertise and structure of the workforce<br />Investments must continue in developing the foundation for service delivery and innovation, through broadband deployment, tax policy, etc.<br />Page 14<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />
  71. 71. Questions<br />?<br />Debashish Sinha<br />Chief Marketing Officer<br />Systems In Motion<br />Email:dsinha@systemsinmotion.com<br />Direct: (650) 704-8843<br />www.systemsinmotion.com<br />?<br />?<br />Page 15<br />Copyright © 2010 Systems In Motion. All rights reserved.<br />

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