Leveraging Global Delivery Management Sanjiv Puri Managing Director ITC Infotech Ltd' 11 November 20

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Leveraging Global Delivery ManagementSanjiv
PuriManaging Director ITC Infotech Ltd.11
November 2008
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Presentation Agenda

• New forces driving Business
• Global Sourcing Manufacturing
• Growth phases of the Indian IT Industry
• Early Growth
• GDM
• GDM 2.0
• Foundation for Future
• A Case Study
• Fundamentals to be Addressed
• Optimal Sourcing Approach

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The New Forces Driving Business
Traditional Sources of Competitive Leverage
Globalization
Deregulation
Buyers
Suppliers
YOU
New Entrants
Substitutes
Competitors
Digitization
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Global Sourcing Trends

• World trade in services is significantly less
  than trade in manufacturing
• Only 10 of services enter international trade vs
  50 in manufacturing
• Estimated that by 2025, 80 of the worlds GDP
  will be sold across international borders
• Key Differentiator Ability to source, not own,
  resources globally
• Create and sustain the market of opportunities
• Good
• Fast
• Cheap

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Evolution of Global Delivery
Global Delivery
Global Sourcing
Local sourcing
Make Vs Buy
Division of labor, specialization
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Global Delivery System

• Drivers
• Cost Reduction opportunities
• Innovation and Expertise
• Reduced Time-to-Market
• Risk Mitigation
• Local Market Needs
• Enablers
• Modularity in manufacturing
• Standardization of product
• Information Communication Technology
• Global spread of Quality Managerial skills
• Lowering of trade barriers

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• Examples of Global Delivery Systems in
  Manufacturing

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Apparel
Global Sourcing Multiple Manufacturing
Locations Global Markets
Lining China
Fabric Italy
Tailoring East Europe, South Asia, China
Trims Hong Kong
Markets Europe, North America, Asia
Design UK
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World Car Fiat

• World Car a fully standardized family car
• Built on Global Sourcing and World Material Flow
  concept
• Blend of globalization, modularization and
  outsourcing in manufacturing

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World Car Fiat Palio
Assembly Plants Menas Gerais, Brazil Argentina Bi
elsko-Biala, Poland Morocco Bursa,
Turkey Rosslyn, SA India
Parts Sub-assembly Suppliers 100 Global
Suppliers 70 of Fiats purchase volume
Outsourced Logistics TNT Maintenance
Comau Painting PPG, TurinAuto
3PL
Shipped to 32 countries
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Dell Computers

• Factories Florida, North Carolina, Tennessee,
  Texas, Brazil, China, India, Ireland, Malaysia
  and Poland.

Component Sourcing from suppliers across the globe
Factories at 10 locations
Worldwide Sales
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Electronics Major using best expertise globally
Hungary - Mathematics
Kolkata - Physics
California - Aesthetics
Tampere, Helsinki Functional Design
Cambridge, UK Nano-science
Nokia Research Design Centers
Nokia has production units at Brazil, China,
Finland, UK, Hungary, India, Mexico, Romania,
South Korea. It sells its handsets worldwide.
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Global Sourcing Trends

• Some Methods used today in the Services
  industry..
• Statistical Process controls
• Workforce planning
• Metrics for performance measurement
• Correlation of financial and operational metrics
• Account health management
• are derived and adapted from methods
  traditionally used in Manufacturing
• But, what we need to replicate is also
  innovation in services to create new benchmarks
  in performance

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Growth Phases of the Indian IT Industry
Era of Global Delivery Management
Industry Maturity
Early Growth
Scale and Complexity
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Early Growth Up to Early 00

• Driven by Y2K and .com
• Focus on Staffing and Small Scale Projects
• Emergent awareness of Low Cost Geographies

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GDM

• Multi-shore delivery locations
• Process Maturity
• Focus on Efficiency Quality
• Service Expansion

Today, India accounts for 2/3rd of Global IT
Sourcing
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Key Enablers

• Large Skilled Human Resource Pool from Tier 1
  cities
• Strong tertiary education system (Engineering,
  Science, Math, etc.)
• English Language proficiency
• Declining cost of Communication
• Investments by IT Organizations in
• Processes, Methodologies and Tools
• CMM, ISO, Six Sigma, Lean, ITIL/ ITSM, etc.
• Training

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Key Characteristics

• Multi-shore deliveries using Follow-the-sun
  concept, using low-cost locations and man-power
• Small Projects to Large enterprise-wise projects
• Broad Service Mix
• Application Management Service, Package
  Implementation, Systems Integration, Consulting,
  BPO, KPO, Infrastructure Services

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Key Benefits

• Cost Savings
• Efficiency Gains
• Time-to-Solution
• Process
• Business Continuity
• Benchmarking against world-wide best practices
• Leverage local skills and cost structures

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Key Challenges

• Managing Global Delivery Environment
• Local regulatory environment, cultural
  differences, language, time zone differences
• Integration of resources to provide unified
  service
• Lack of industry-wise standardization
• Process, materials, configurations
• Managing Innovation
• Encourage innovative thinking
• Encourage process innovations

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Key Challenges (Contd)

• Increasing wage rates
• Cost Escalations
• Wages
• Infrastructure
• War for Talent
• Talent Acquisition
• Managing Attrition

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GDM 2.0
COST, EFFICIENCY
VALUE, EFFECTIVENESS, INNOVATION
Towards GDM 2.0

• Key Focus
• Cost to Value Arbitrage
• Solution effectiveness
• Innovation
• Business Outcomes aligned
• Continuous Improvements Non-linear Models
• SOA-Like
• Green IT

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GDM 2.0 Assembly of Service / Value Chain

• Virtualization
• Computing Power
• Networks
• Business Process Management
• Service Oriented Architecture (SOA)
• Software As A Service (SAAS)
• Strengthening of the Sourcing Phenomenon over
  Classic Outsourcing
• Green GDM

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GDM 2.0 An Integrated Delivery Approach
Flexible Relationship Structuring Options
Delivery Processes
Resourcing HR
Communication
Infrastructure Network
Governance
Strategic Investment Capability Commitment
Create shared strategic vision and jointly invest
to create partnership value beyond conventional
client-vendor engagements
Senior Management Focus
Security
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GDM 2.0 An ITC Infotech Case Study
The Client
A Global CPG Major
Application Management Services (AD, AM,
AT) Infrastructure Management Services, Package
Implementation
Its Requirement
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GDM 2.0 ITC Infotech Case Study (Contd)

• End-to-End ownership from solution
• management to roll out and production support
  across 42 countries
• Collaborating with the clients 4 regional
• IT hubs and regional IT teams
• Package implementations in 30 countries
• Joint ownership of solution roadmap

GDM Characteristics

• Assisting client in services consolidation
• Service commoditizing through building niche
  domain competent technology layer
• Leveraging Innovative techniques
• Dedicated domain experts at offshore
• Dynamic Resourcing Model

Moving Forward
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GDM 2.0 Fundamentals to be Addressed

• Clarity of Business objectives and sustainable
  value adds for customers
• Gear up for delivering commoditized services
• Superior domain knowledge and End-market Intimacy
• From a vendor-supplier relationship to
  partnerships with need-based deals structuring
• Have a sharp re-look at MANUFACTURING it has
  matured to last long

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Optimal Sourcing Approach
Benchmarking
Journey to world-class
Collaborative Transformational Approach
Transformation Roadmap
Partnership
Initial Lift and Shift
Target Future State
Transformation
Collaborative Solution Design
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