Managing Offshore IT

Though entire books have been written on aspects of software services and offshoring, the business model is rather prosaic involving two main dimensions: selling the services and ensuring that the projects and programs are delivered as agreed on. Though it is a highly oversimplified way of looking at our ‘business’ most of what we do could certainly fall into either of the two buckets. And selling the services essentially means that clients value the services enough to be willing to fork out agreed amounts, which in turn has to be accounted in our books and reported as quarterly, annual and periodic reports to stakeholders.

What does all this mean: If you see your account manager from the offshore vendor walk-in with a harried look and an ‘urgent’ request to approve the SoW or Purchase Order that is sitting in your workflow, you know what to do.

Back to where I started, it’s that time of the quarter: I better logoff and enter my financials in our system, trigger the process to raise invoices etc etc. 

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I was listening to an interesting program on NPR on the drive to work that featured “Technology for Unmanned Planes Shown at Paris Air Show” The program was about the technology from Athena Technologies, which makes flight-control and guidance systems for unmanned aircraft, and about how we could someday be flying on aircraft without human pilots. After analyzing a few aspects of technology, the reporter brought out an interesting aspect that could be a potential bottleneck in adopting the technology: Pilot’s ego’s. 

This made me reflect on an aspect of offshoring that I did not delve deeper into in my book [Offshoring IT Services] is the dynamics of multisourcing. Infosys teams increasingly get involved in programs and projects for clients that also work with other vendors. Of course there are several dimensions to such interactions. Facilitating review of artifacts, say architecture and design outputs is an example. And here, similar to the Pilot, the ‘Architect’s Ego’ comes to play. 

Case in point: I was making a presentation to a client in response to a proposal for an SOA solution recently when the aspect of architecture governance came up. The IT director indicated that they were evolving an SOA - Center of Excellence (CoE) for the enterprise and were looking to leverage our team in addition to another SI vendor they were working with.
A similar query was posed by my colleague in our discussion forum around the need to evolve a common governance framework by utilizing our practices along with that of the other SI vendor team:

In this instance, the client is looking for best practices in reviewing Technical Architecture & Design outputs by Infosys (and other service providers). The key objective is to train their internal IT workforce in validating the technical outputs. The best practices could be in form of guidelines, checklists or tools in place on client side. The key areas of interest are technical architecture, design and non-functional characteristics (stress / load / regression testing).

Such multivendor scenarios where architects and senior technologists from different organization work together are getting increasingly common. In these scenarios, some of the key aspects to focus on include:

• Standardized and robust governance processes
• Standardized and robust templates for artifacts to be reviewed
• Up to date and well documented IT Strategies and Architectures

Now, we at Infosys have credentials in these areas. Similarly, many large clients also have their own processes in place, just as other SI vendors who also work with the same clients.  Though there is no cookie-cutter approach for utilizing frameworks or building consensus, such situations provide an opportunity for a consultative development leveraging the best practices and working together. Back to the Airshow story, this may also be an opportunity to keep a check on the Pilot (Architect) Ego: we may have a really good process but if the client and the other vendor also have a fairly robust and workable model, why not leverage that instead; right?

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A quick follow-up on my blog on “Offshoring Study trip.” An aspect missed out is the InStep, which is Infosys’ global internship program. The program gives students an opportunity to experience the workings of offshoring first hand.

A recent press release quotes  Josh Bornstein, alumnus of Claremont McKenna College “While applying for full time jobs, my internship experience in India differentiated my resume from other candidates. Infosys gave me an unmatched opportunity to grow and gain expertise in an international business climate. Acquiring experience with a world-class company like Infosys has helped me to adapt to the changing global environment and has given me an edge over my peers. This has held me in good stead in my career at Footprint Ventures, an early-stage venture capital fund in India.”

A parallel to this is the “Campus Connect” program. I had a pleasure of anchoring academicians for this during my stint in Bangalore a few years ago. A professor volunteered to helped my group design and validate a reference architecture framework that we were developing at the SETLabs. In case you are wondering, the internal checks and balances ensure that the interns or external participants work primarily on internal initiatives and not for paid projects for clients. This helps in a two-way knowledge sharing as our practitioners get grounded in the latest thinking from the academia and the academicians get insight to globalization at work.

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With offshoring of IT and Business Services gaining widespread attention among business leaders and technologists alike, can smart, ambitious students be far behind? Surely not. Students of Business and IT are getting into the swing of globalization by planning ‘study trip’ to India … which is almost a must-do; and among the agenda is a visit to the Infosys campus

On a similar thread, I also came across an increasing number of courses on ‘managing offshoring’ offered by universities [A sampling online]. Though I continue to interact with academics and peers on the topic, I have not participated in these ‘study trips’ as my knowledge of offshoring is  primarly empirical, and based on studying industry reports and analysis from academics. So, I sometimes wonder: what do the students do on a 'Study trip' to India?

I am presuming that planning for these trips begins with a study of guides like “The IT Manager's Essential Guide to India”
A quick googling of the topic brought the following interesting blog, reflective of similar trips by other students. “India Study Trip” (summary of Stanford GSB's visit)
"Not surprisingly, our visits focused on the growing IT sector with stops at the impressive and established Infosys"
"Today’s meetings were last but definitely not least. We were given a tour of the magnificent Infosys campus in the morning. . . . We then met with Mr Narayana Murthy and his wife Mrs Sudha Murthy. They spoke for about half and hour each about the tremendous growth of Infosys, and about the philanthropic work of the Infosys Foundation. The Q&A session was covered by about half a dozen eager paparazzi with their cameras, which added some extra excitement."

What I find interesting about these blogs and other similar trip reports is that they seem to echo a ‘shock and awe’ factor: essentially depicting how the students experienced a different culture and were in awed by the meeting with CEOs. While this is certainly a dimension that students of globalization should be experiencing: what about the nuts-and-bolts? Executing and delivering on sourcing strategies project after project is what affirms the confidence of global clients in the workings of the model, right? So, where is the discussion around observations on sourcing?

An example of this questioning could be:

“The array of business operations that Infosys provides is truly astounding. They provide assistance with finance, life sciences, retail distribution and engineering so that companies can concentrate on their core competencies.

Our last meeting for today was with Infosys, the BPO giant of India….During the presentation by Infosys, there were some items with which we disagreed. They stated that American companies were not all that concerned with cost savings when outsourcing to India, but rather it was the quality of work that attracted companies from around the world. While it is true that Infosys attracts some of the best talent in the world to work on their projects, it is highly unlikely that many US companies would have outsourced their operations halfway around the world if there had not been cost savings involved.” Blogged by International Entrepreneurship Study Abroad Trip Focusing on India

Now, I am not going to be answering this specific query … or even blogging on a ‘guide to successful outsourcing site visit’  However, I must admit that I am fascinated by the sheer energy of students from universities in the west who plan trips to visit and experience flattening of the world halfway across the globe.

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A few weeks ago I was speaking with an IT director at a firm that has been sourcing software application development to us for a few years. The discussion was in the context of a security audit they had undergone. Though the discussion was primarily around the impact of the audit recommendations and how we could work to ‘harden’ the application the Director was also interested in knowing more about the security practices we brought to the table as a part of our services.

Queries like these are increasingly common as clients engage with service providers who in turn leverage globally distributed teams to ensure successful architecture, design, development and delivery of software systems.

IT executives and business stakeholders are increasingly getting paranoid about security, and rightly so. Though there are several dimensions to the issue, my colleagues in the application development space focus on the aspects as they pertain to the “Secure by design” paradigm.
 What it essentially means in our context is simple: it does not matter if the design and construction is done onsite or offshore, industry best practices will override personal preferences when it comes to security. This is also a topic I dealt with in my book (Offshoring IT Services) where I ideated on pertinent topics on offshoring security with inputs from Prof. Nancy Mead of Carnegie Mellon university.

Designing and developing secure code should be inherent in any application development process, so why should offshoring be any different? Mark Hillary, in his recent blog touches on some of these aspects
 

I think there are three quite separate areas you need to audit and examine if you have an existing commitment with an offshore supplier that involves the processing of sensitive data, or if you are considering which supplier to use:
Legal: In the legislative environment you have chosen, what kind of deterrent is there from the law to help prevent information theft? If there are measures in law to protect you then what actual case precedents exist – it may be that the law exists, but the process of going to court takes many years or is just too painful for other reasons so try to determine how well the law really protects you.
Process frameworks: You want the supplier to guarantee it will use process frameworks such as BS7799 to ensure that the business processes are secure, according to internationally agreed guidelines.
Additional measures: On a company-by-company basis you will observe that some suppliers go much further and are more secure than the process frameworks require. Make sure you determine how secure you need to be and work with a supplier who understands that data will not be secure, just because they passed a security audit.

Similarly Mark Willoughby  highlights some aspects in his Computerworld article “Offshore security: Considering the risks” He summarizes a few steps to Minimize Risk and Secure Offshore Operations

1. Know your security and privacy requirements before you start.
2. Do a thorough security evaluation before signing any agreements that include regulatory compliance.
3. Include stringent security measures in the SLA, including periodic assessments, audits and tests.

I couldn't have summarized it better.  Footnote: Further references on the topic:
Enterprise Security Solutions
Extracting value of Information Security through IT service management

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In some quarters, India has almost become synonymous with outsourcing. For instance, a recent article in Forbes magazine interviews Raman Roy, who says how
 “In the days leading up to India's '90s outsourcing boom, one of its pioneers remembers starting presentations to prospective American clients by telling them, "You probably think I travel to the office on a bullock cart." ….At a time when India is firmly established on the global map, that line seems outdated, slightly offensive even."

With articles like these appearing in the mainstream media, it essentially means that “Offshoring to India” is not a title that can draw readers’ eyeballs anymore; so what’s the next hot title that analysts, bloggers and business media are fixated over? It is “China vs. India”!

The debate in the blogsphere is also fueled by a recent Forrester Research report [China's Diminishing Offshore Role] that downplays Chinese offshoring and GDM (Global Delivery Model) executed from China.  For instance Computerworld blogs quoting “Dalian not so hot, says Forrester.” Apu, in his CIO forum blogs about the report “India vs. China: Forrester right on facts, wrong on conclusions?”

Even the business media is eagerly doing a compare and contrast of the two BRIC leaders. On a similar thread, Wall Street Journal editors stir a debate in their  blog on “Doing Business in China and India” by asking  What sort of approach would you recommend for doing business in China and India? If companies are considering expanding to those countries, should they go there with a short-term or long-term outlook? And how much of a company's resources do you think it should devote to China-India expansions?"

On Infosysblogs, Aditya asks “How Important is China to Your Business?” which prompted quite a few interesting comments. On a similar thread, I had also blogged about executing projects and programs out of multiple geographies, leveraging Infosys’ GDM

The current debate over “India vs. China” makes me wonder if it is just a storm in a (Chinese) Teacup? Well, The authors of ChinaLawBlog responded to my query on the topic: “I agree with you that it is a bit much to paint this as an India v. China issue as though only one country will be left standing. But, hey, it's the headline that draws the readers. I should have put in the word "smackdown," like I did the last time I compared China versus Vietnam.”

Bottomline: The title of this (as well as other blogs and articles) should not be “Versus” but should probably read “And”

What does it mean? For this discussion, assume that Infosys is your sourcing partner: well, we have global teams in several locations in India and in China, and can deliver out of either, or both locations…but does it matter to you?  This means that I will continue to advice my clients to leverage global skills, whenever, wherever they can, and not worry about whether China or India will lead in offshoring. In an increasingly flattening world, the debate over location should be moot; right?

To many western clients, the debate over location is already less significant: to them, China is as offshore as India is. What matters more to them is: can my sourcing partner execute my programs under budget, on time and deliver efficiently?

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