“IT Offshoring with Intention”

Neeraj Wadhera, Fidelity Investments

Kate Pugh, AlignConsulting, Sloan SM/MBA „96

Professor Jeanne Ross,

Center for Information Systems Research

April 6, 2010

1IT Offshoring with Intention

Agenda

• Introductions

• What does IT Offshoring Take, in Your View?

• “IT Offshoring with Intention” Practices

• Discussion

2IT Offshoring with Intention

(See IT Offshoring with Intention details in the Appendix)

Introductions and ContextKate Pugh (SM/MBA „96)

• Former VP, KM for

Fidelity PWI

• Consulted in 1999 to

Mahindra British Telecom

• Offshored Finance Portal

to Mumbai with JPMC

• Neeraj‟s IT client

• Neeraj‟s KM / Change

Mgt. provider

• Consult in Strategy, KM,

Change Mgt

Neeraj Wadhera

• Fidelity Technology

• Founding member of

FMR India IT (Fidelity‟s

captive org. in India)

• Built and led IT delivery

teams (400 people)

• Built and led 2nd site

(Chennai)

• Intro‟d Change mgt

practices with

consolidation of sites.

3IT Offshoring with Intention

Outsourcing is here to stay!• Outsourcing/offshoring is here to stay.

2006 – 246B

2007 – 297B

2008 – 326B

2009 – 373B (14.4% increase)

2010 (projected) - 412 (all figures in USD billion)

• Out of total $1.6T 2009 Worldwide IT spend, 23% is outsourcing/

offshoring.

• Outsourcing/offshoring to India alone forecast 2010 is $48B.

• Of this, offshoring in India will b $7-$10B (Captive, as opposed to 3rd

party)

• Organizations have learned to move work

offshore and save costs…

4IT Offshoring with Intention

*Source XMG Global, a leading ICT research and advisory firm

This is one of the few global

IT industry categories seeing

growth in 2009, while the

rest fell.

The Challenge is to “Maximize the value”

“Traditional”

• Task-based

• Round-the-clock

• Cost-Effective

• “Flexible Capacity”

“Value-Maximizing”

• Greater control /

reduced risk

• Innovation

• More complex

functions

connected to

customer/product

5IT Offshoring with Intention

How do you achieve it?

“IT Offshoring with Intention” Practices

1.Effective Leadership

2.Effective management

3.Capability building

6IT Offshoring with Intention

Effective Leadership

• Sharing the Big

Picture

• Leading as “Farming”– Tomato vs. Corn

7IT Offshoring with Intention

Effective management

• Adopting a

“Program” Lens

• Infusing Meetings

with “Conversation”

• Leveraging

Workforce Diversity– Cognitive vs. Motivational

8IT Offshoring with Intention

Capability building

• Intentional

• Teaching SMEs to

Teach

• Publishing and

transferring

knowledge

9IT Offshoring with Intention

We weren‟t in the McKinsey‟s study, but…

Category

“Offshoring with Intention“

Practices

McKinsey Global Offshoring and Outsourcing

Dimensions

Integration,

including visits

Fulfilling work for

Offshore Team

Build Expertise

Explicitly

Effective

Leadership

1. Sharing the Big Picture X X

2. Leading as Farming X

Effective

Management

3. Adopting a “Program” Lens X X

4. Infusing Meetings with

“Conversation”

X

5. Leveraging Workforce Diversity X X

Capacity

Building

6. Teaching SMEs to Teach X X

7. Publishing and transferring

knowledge

X

10IT Offshoring with Intention

Virtual teaming practices improve:

• Attrition

• Offshore effective rates

• Onshore customer satisfaction

Source: 2008-9 McKinsey Survey of Global Offshoring and Outsourcing Industry

Discussion

11IT Offshoring with Intention

Appendix

IT Offshoring with Intention 12

1. Sharing the Big Picture• Sets direction

– Share the broad vision of the program (“clarity of vision”), including

challenges and opportunities

– Ensures that the global team has a clear understanding of team objectives

(Near term and long term)

• Shares the strategy for working with offshore team(s), including outsourcers

– Intended value proposition

• Demonstrates the significance of the specific work being done offshore

– How is this work valuable to company‟s objectives

• Big Picture as “professional context”

– Performance compared to outsourcers (common metrics)

• Result:

– Shared sense of urgency

– Accelerates professional development, proactivity, innovation

– Enhances employee engagement

13IT Offshoring with Intention

2. Leading as Farming

• Tomato Farmers

– Hands on managing

– Mentoring cum

managing

– Manager models,

acculturates

– Task mastery

– Team-member

development

• Corn farmers

– Hands off managing

– Mentoring separate from

managing

– Engagement in strategy

– Improvisation

14IT Offshoring with Intention

Should correspond to topic, not geography (for both US and India managers

“Leaving the comfort zones”)

3. Adopting a “Program” Lens

• Visual image of related projects

– interdependencies within, across operations, other functions,

customer buying processes

– Identify and mitigate shared risks

• Broad understanding of the program / product / function

– Customer objective (criticality, usage, priorites)

– System objective (capacity, feature impacts, queue prioritization,

standards)

– Workstream shared milestones & interdependencies

• Daily interactions about deliverables and cross-impacts

– Example: DAT Reviews

• Result:

– Know impact of actions on other workstreams

– Proactivity, creativity

15IT Offshoring with Intention

4. Infusing Meetings with “Conversation” • Leveraging conversation/ facilitation skills

– Sense-Making; Joint interpretations

• Regular “pause”

– Scheduled part of meetings

– In person/virtual (travel needed)

– Synchronous/Asynchronous

– Climate for risk-taking, participation

• Result

– Improved understanding

– Team confidence

– Team belongingness

– Effective networks

16IT Offshoring with Intention

5. Leveraging Workforce Diversity

• Cognitive Diversity

– Tech & Cust Expertise

– Conceptual models

– Networks

– Comms/Learning

• Motivational Diversity

– Incentive response

– “Triggers” and

interests

– Capacity/endurance

17IT Offshoring with Intention

• Result:

• Better sense-making , innovation (from convention into creativity)

• Balance of over-exuberance with sobriety

• Greater interchangeability of resources

“Collections of people with diverse perspectives and heuristics outperform

collections of people who rely on homogeneous perspectives and heuristics.”

Scott Page, The Difference (2007)

6. Teaching SMEs to Teach

• Capability building as management priority

– Shadowing, mentoring

– Job rotations into US by Hi-Pos

– “Teaching” in SME‟s Devel. plan, responsibilities

• Reflection / Storytelling, Documentation, Extrapolation,

Proactivity, Domain expertise

– Indian engagement leader in US

• Access to SMEs

• Translation (helped SMEs parse questions)

• Result:

– Greater capacity

– Engaged and motivated SMEs

18IT Offshoring with Intention

7. Publishing and Transferring Knowledge• Having KM disciplines/

consistency

– Content

• About the project

(Go-to for information about

workstreams, queues, clients)

• About the team

– KM Processes

• Tacit knowledge processes (e.g., Communities of practice, knowledge-

jams/elicitations)

• Collaboration using social media

• Result of easy access to knowledge

– Greater efficiency (reusing knowledge), greater consistency

19IT Offshoring with Intention

Deep Dive: Conversation

20

Interact

Ownership

Presence

Sense-making

Depth/Context

Act!

Stewardship

Retention

Interpretation

Application

Dialogue Principles*

1.Voice

2.Respect

3.Suspension

4.Listening

Isaacs, William, Dialogue and the Art of Thinking Together (1999), adapted by K Pugh

IT Offshoring with Intention

McKinsey on “Outsourcing” Innovation

21IT Offshoring with Intention