Más contenido relacionado La actualidad más candente (9) Similar a Can Your Offshore Provider Help In Business Transformation? (20) Can Your Offshore Provider Help In Business Transformation?1. Can Your Offshore Provider
Help In Business
Transformation?
Sudin Apte
p
Principal Analyst
Forrester Research
June 9, 2010
www.forrester.com © 2010, Forrester Research, Inc.
2. Sourcing & Vendor Management
Sudin Apte
Principal Analyst
Forrester Research
June 9, 2010
3 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
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Source: Worth1000.com
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3. Theme
Offshore providers fall short of
delivering true end-to-end
business transformation.
However, they can successfully
deliver isolated subprocesses or
IT-focused projects.
5 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
Agenda
• Why are companies looking at offshore for their
transformation projects?
• Types of transformation projects and capability
required
• Review of top offshore providers for transformation
projects
• Q&A
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4. Cost cutting remains a top priority
“How important are each of the following business goals to your
internal IT organization when making software decisions?”
Very important Important
Reduce costs 60% 29%
Regulatory requirements 48% 28%
Improve collaboration 22% 37%
Increase innovation 21% 37%
Sustainability goals 13% 24%
Base: 1,007 North American and European enterprise software decision-makers
Source: Enterprise And SMB Software Survey, North America And Europe, Q4 2009
7 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
To survive budget cuts, companies cut
waste and want to pay as they get value
“How important are the following software initiatives in supporting your firm's current
business goals?”
Very important Important
Consolidate enterprise applications 24% 43%
Modernize key legacy applications 25% 41%
Increase collaboration techs 16% 42%
Upgrade enterprise applications 16% 38%
Expand use of Agile 9% 23%
Increase our use of SaaS or cloud 8% 23%
Outsource app maintenance 9% 20%
Outsource app development 8% 17%
Base: 1,007 North American and European enterprise software decision-makers
Source: Enterprise And SMB Software Survey, North America And Europe, Q4 2009
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5. Cost-saving projects and reducing the
application portfolio are top of mind
“How do you expect the following activities to change over the
next 12 months as a result of the current economic conditions?”
Decrease Increase
Accelerate cost saving projects 2% 70%
Reduce the application portfolio 2% 60%
Increase ROI reviews 3% 55%
Move to subscription models (like SaaS) 4% 20%
Defer software spending 6% 39%
App maintenance outsourcing 15% 24%
App development outsourcing 18% 26%
Speed of software upgrades 29% 19%
Size of internal IT staff 34% 20%
Base: 1,007 North American and European enterprise software decision-makers
Source: Enterprise And SMB Software Survey, North America And Europe, Q4 2009
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Business roles are as important as IT
roles in the buying process
“Who is significantly involved in the decision-making process for
selecting third-party IT service providers at the following stages?”
Business roles IT roles
Base: 942 North American and European enterprise IT services decision-makers
Source: Enterprise IT Services Survey, North America And Europe, Q2 2009
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6. Theme
Offshore providers fall short of
delivering true end-to-end
business transformation.
However, they can successfully
deliver isolated subprocesses or
IT-focused projects.
11 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
Business transformation programs
• Focus on making firms stronger, leaner, and more
adaptable by making their operating models,
supporting business processes, and underlying
processes
technologies flexible, leaner, and more adaptable to
change.
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7. Components of the true end-to-end
business transformation definition
• Executive commitment
• Covers three key components — people process,
people, process
and technology
• Ability to innovate
• Typically long-term
• Aligned with business strategy and g
g gy goals
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Example of a vendor’s enterprise transformation capability:
Accenture’s business transformation
approach
• “High-performance research initiative”: collecting
and structuring information and insights on business
g g
performance across industry verticals and horizontal
processes
– Measuring inputs and outcomes, linking outcomes to
metrics, building business blueprints
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8. Example of a vendor’s enterprise transformation capability:
Accenture’s business transformation
approach (cont.)
• “Process excellence initiative”: building a central
repository of information, data, and benchmarks
p y , ,
– Build process best practices, use metrics to build
process KPIs, already more than 10,000 processes
covered
•“Predictability and insights at scale” (Don Rippert,
CTO, Accenture)
– Build and maintain centers of excellence for defined
key
k processes (i (i.e., t l t management, retail
talent t t il
banking).
15 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
Example of a vendor’s enterprise transformation capability:
Accenture’s business transformation
approach (cont.)
• Common tool set and solution architecture for
building software p
g packages
g
– Central repository for knowledge capturing to drive
reuse
– Focus on key platforms (i.e., .NET, NetWeaver)
– Standard tools for training and development
• Standard methods for engagement planning and
project management
– Select projects based on how well they fit
Accenture’s business and technology ambitions.
– Leverage global delivery backbone rigorously.
16 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
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9. Theme
Offshore providers fall short of
delivering true end-to-end
business transformation.
However, they can successfully
deliver isolated subprocesses or
IT-focused projects.
17 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
Why don’t clients think of offshore
providers for transformation?
• Historic value proposition around cost arbitrage
• Primary capability around technology and delivery
processes
• Limited skills on the business domain side to develop
an industry-leading business process
• No business transformation experience in the past,
limited business consulting capability
• Typical offshore teams include mostly an army of
juniors, and onshore teams are small.
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10. All transformation deals are not the same
• Mega-size corporate/financial transformation
– Focus on business re-engineering
• Business process transformation
– Process optimization and leadership
• IT apps and infrastructure transformation
– Cut waste and make lean.
• IT organization and process rationalization
i ti d ti li ti
– Focus on efficiency and alignment
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Offshore providers build new capability
to deliver parts of transformation
Source: Upcoming, “A Strategic Review Of The Top Five Offshore Vendors” Forrester report
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11. Indians have an appetite to grow
Financials for the 12 months ended March 2010, compared with 2009
Source: Upcoming, “A Strategic Review Of The Top Five Offshore Vendors” Forrester report
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The top offshore providers made more
money during the recession
Financials for the quarter ended March 2010, compared with the same quarter in 2009
Source: Upcoming, “A Strategic Review Of The Top Five Offshore Vendors” Forrester report
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12. How do the top five Indians’ next-gen
capabilities stack up?
Source: Upcoming, “A Strategic Review Of The Top Five Offshore Vendors” Forrester report
23 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
Examples of successful transformation
projects done by top Indians
• Business process transformation
– Case study: Infosys transforms the order-to-cash
order to cash
(OTC) process of a top retailer globally
• IT apps and infrastructure transformation
– Case study: Wipro transforms legacy applications at a
top five insurance provider to eBusiness
• IT org and process transformation
– Case study: HCL builds a next-gen partnership
between IT and the business by building business-
oriented service centricity
24 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
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13. Case 1: Infosys transforms the order-to-
cash (OTC) process of a top retailer
globally
Client A Fortune 500 global retailer
Issue/focus Meet new competitive pressures by collaborating better with customers. The
client also wanted to transform its order-to-cash process.
Challenge The client wanted to grow revenue realization and reduce operating costs. It
also wanted to substantially increase operational benefits and margin to
improve the company's valuation.
Vendor Infosys deployed its IMPACT and VRM frameworks and methodologies.
approach
It leveraged its strong SAP capability and partnership, accelerators, and prebuilt
solutions.
It created a vertical-focused process repository with country-specific legal and
statutory requirements (for 45 countries).
Benefits The incremental approach resulted in higher predictability — Infosys deployed
this SAP-based solution in one region before successfully rolling it out globally.
The client realized $70 million in benefits to its operations after rollout.
25 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
Case 2: Wipro transforms legacy apps at a
top five insurance provider to eBusiness
Client A top five insurance firm that wanted to move legacy apps to eBusiness
Issue/focus The client wanted to provide applications access to trading partners so they
could service customers better and improve satisfaction. It also wanted to
reduce the cost of operations.
Challenge Long cycle times; involvement of multiple teams in a single request/ticket;
multiple and unintegrated apps result in data loss/redundancy, manual error,
and lack of reconciliation.
Vendor Wipro deployed Web service wrappers to stitch functionality across multiple
approach applications that resulted in straight-through processing (STP).
It leveraged its strong tech capability across platforms such as WebSphere,
Jacada HostFuse, and Apache Tomcat.
It used its systems integration and software engineering skills.
Benefits Number of Web-based screens was reduced from 15 to two.
End-to-end process time was cut by 33%; data input by users was reduced
by 45%.
The client achieved real-time data and applications with ease of use.
26 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
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14. Case 3: HCL builds business-oriented
service centricity and business partnership
Client Dr. Pepper Snapple Group (DPS), a leading beverage company
Issue/focus DPS wanted to enable a next-generation business-IT partnership by
transforming its IT org and processes.
Challenge Improve business-value-oriented IT with greater service centricity. Lower costs
and build business alignment.
Vendor DPS signed a multiyear contract with HCL for app development, app
approach maintenance, and infrastructure support on high-end service parameters.
HCL deployed on-site dedicated service delivery managers (SDMs) and
domain experts for better coordination with DPS’s business units.
HCL's used its Enterprise Discovery Framework, Process Watch dashboard,
Prizm design tool and value Portal
tool, Portal.
Benefits Day-to-day problems decreased and on-time delivery improved.
Business got a single point of contact for IT across tech silos.
Centralization and offshoring drove cost savings.
Innovations reduced cycle time and increased internal customer satisfaction.
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Summary
• Offshore providers fall short of delivering true, end-
to-end business transformation.
• But not all transformation falls in this category.
• Top offshore providers can successfully deliver parts
of business- or IT-focused work.
• They can bring age-old offshore benefits blended
with newly honed domain and consulting capability.
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15. The next 90 days
• Explore how can you leverage providers’ new
capability like intellectual property solutions to get
incremental value in your coming projects
• Add quickly new criteria in your Q2 vendor score-card
to capture new offshore value proposition
• If negotiating for transformation work, rope in a
offshore provider to get costs down. Mere presence of
Indian supplier will get on-shore provider’s costs down
quickly.
quickly
29 Entire contents © 2010 Forrester Research, Inc. All rights reserved.
2009
Longer term
• Set the right goals for your transformation
projects delivered from offshore. Focus on a
subset at a time and go up incrementally.
• Invest in vendor education, especially on
business processes
• Invest in internal change management and new
collaboration and workflow tools to manage
complex and globally distributed projects
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2009
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16. Thank you
Sudin Apte
+91 (20) 4014 7728
sapte@forrester.com
www.forrester.com
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