Offshore Management Framework: The key to managing outsourced IT projects across time, distance and cultures.

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Big sourcing deals and managing offshoring programs

Last week there was an interesting news release about Tata Consultancy Services (TCS) and the Netherlands-based Nielsen Company inking a large sourcing deal, by some accounts, the largest sourcing/offshoring deal by an Indian services firm. Coming at a time when naysayers were beginning to question the sustainability of the model in light of challenges of rupee/currency fluctuations, questions on India/China etc, this is bound to provide fodder to strategists and deal consultants who are bound to analyze the intricacies for sometime to come.

While observing, pitching and participating in other such large deals, I have also been musing about a few key aspects of managing such large programs and initiatives. During a few meetings with client CxOs that I attended recently, Infosys had been invited to make a pitch on our value proposition. It is interesting to see clients increasingly ask us for our credentials in managing large IT programs.

And here, I am talking about managing large technology initiatives for the client and not just large sourcing initiatives where Infosys or other technology vendors also happen to participate. Obviously, Infosys, like many tier-1 global software services firms has excellent credentials in managing IT projects with clients. This said, there is an opportunity area that seems to be presenting itself in the market as clients ask about capabilities in managing end-to-end initiatives and programs for them. To illustrate, here is an extension of a model I had briefly explored in my book, Offshoring IT Services, while talking about program management functions.

I will not elaborate on these aspects, but it should be apparent that they cover a vast area that Program Managers need to be addressing, especially while managing large, complex programs. A few of you had already brought out similar points when I had blogged about such a thread sometime ago [Ref: What’s the big deal about big sourcing deals?]. For instance, Chetan Bhor said
At a sales/account or program mgt level , larger outsourcing deals could get complex with respect to delivering the desired cost savings , best practices , governance ,security & risk compliance , the growing web of SLA’s , program management etc. And Manik Patil talks about how Large deals imply lesser number of vendors and hence, lesser TTCs or Throats to Choke.

In the traditional model, ‘clients’ - sourcing organization’s leaders, Line of business executives and other stakeholders  - typically expected managers from sourcing organizations to manage their people, budget and tasks .... and in some complex, multi-vendor scenarios, appoint Program Managers to oversee aspects of contract administration, Relationship and Change Management. Clients are expecting some of their key vendors to also manage such niche aspects for them.

I will try and extend on this line of thinking -- and why I see Program Management as an opportunity and challenge -- in the next blog entry, but would love to hear your views too.

Comments

Can you explain offshore programs?

Radhakrishnan,
I will be a bit tied-up with a few issues in my day-job the next few days. However, I will try and eloborate on my views on managing "offshore programs" during the week ... while expanding on the thoughts in this entry.

Mohan, would like to highlight some more points/aspect of managing such complex programs

Organizational teamwork: Under the framework of such large contracts / complex programs, a company is typically required to provide integrated services including consulting, systems integration, application development, maintenance, BPO etc hence organizational teamwork is extremely important. Dedicated efforts of various COE’s within the company are required, e.g. Horizontal and vertical BU’s

Strategic thought process – Program managers need to think long term on their Client relationships and get to the next level of strategic engagements

Crisis management - The fact of the matter is that, in IT projects, mistakes develop into crises much faster than in other areas. Thus, mistakes tend to cost more

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