Taking a Reality Check on Today’s Sofware Outsourcing Company Market

There are many verifiable facts about the global information
technology and business process outsourcing (ITO/BPO) market.
It is a multi-hundred billion dollar market. It is a growing market
in terms of the number and total volume of deals and the
number and size of service providers serving the market. If
through no other means, the magnitude of the outsourcing
market and its growth levels are verifiable by reviewing the
fi nancial performance levels of the publicly traded service
providers.
Whether or not outsourcing is “delivering on its promises” or
users of outsourcing are satisfied is more difficult - though by
no means impossible - to measure. Between the last quarter
of 2004 and the first quarter 2007 EquaTerra has conducted
eleven market studies that assessed buyers’ outsourcing usage
and satisfaction as well as their future outsourcing investment
plans.

The market assessments primarily focused on buyers that
had undertaken multiple process outsourcing and were of a
minimum size of $100M revenue or 1,000 employees, though
in most cases the studies focused on much larger organizations.
Most studies also included only respondents that were director
level or above and were involved in the outsourcing decision
making process. During that same time frame EquaTerra also
conducted 10 iterations of its quarterly EquaTerra BPO/ITO
Pulse surveys. In short, the studies have been numerous,
comprehensive, and targeted to respondents whose opinions
matter most when it comes to assessing the software outsourcing company
market.
Across all of these studies, buyer satisfaction with outsourcing
remained positive, or above the norm (i.e., buyers were always
more satisfi ed than dissatisfied), though there was room for
improvement:
• A 2005 study of 200 BPO users found that 96 percent were
moderately (55 percent) or highly satisfied (41 percent) with
their efforts.
• The same study found that 73 percent of BPO users felt that
efforts had enabled process improvement.
• A 2006 study of 289 ITO buyers found that 82 percent
ranked themselves as being satisfied or verysatisfi ed with
their efforts.
• A 2006 study of 200 buyers across seven BPO categories
found satisfaction levels ranging from 6.5 (call center/CRM)
to 7.8 (R&D/pharmawork) on a one to ten scale where one
was not at all satisfied and ten was very satisfied.

Two 2006 studies, one with 310 respondents and one with
113 respondents, assessed satisfaction levels in the following
fi ve functional outsourcing areas: IT, finance and accounting,
human resources, procurement and call center. One on a one
to fi ve scale, with one being not at all satisfied and five being
very satisfi ed, satisfaction levels ranged from 3.13 to 3.40. In
the study of 113 outsourcing users, satisfaction levels with the
outsourcing service providers employed averaged 3.48 on the
same one to fi ve scale.
• A critical 2007 study of multi-process HRO buyers assessed
whether the benefits sought from outsourcing had been
achieved. On a one to five scale, with one being benefits not
at all achieved and five being benefits fully achieved, response
levels ranged from 2.48 to 3.00.
There are differing opinions on the success in outsourcing. The
topic has provenripe for criticism among axegrinders, and those
opinions aside, most business people view outsourcing as one
of many tools available to improve performance and reduce
costs, but only if it is pursued under the right circumstances and
executed efficiently and effectively. This requires building an
effective outsourcing governance organization and designing a
relationship that delivers sustainable value. IT executives must
continually and proactively validate their outsourcing decisions.
These outsourcing buyers must evaluate their own situations,
and this report is designed for those looking for the market
perspective in broader outsourcing market trends and
lessons learned.
In many cases with EquaTerra clients, the business case and
organizational strategy will drive clients to conclude outsourcing
functions are critical to success. Outsourcing remains a strategic
tool among many of our clients. Yet, the internal requirements,
technology and provider community provide a constantly
changing environment that often requires modifying an
outsourcing arrangement to properly adjust for these
moving parts.
It is also just not EquaTerra research that finds that buyers are
generally achieving the benefits sought from outsourcing. A
market study of 226 commercial firm executives by PwC released
in May 2007 found executives “bullish” on IT outsourcing. In
this study, 87 percent of respondents indicated ITO delivered on
the business benefits originally sought. Ninety-one percent of
respondents planned to outsource again and felt ITO had become
““an essential business practice.” The fi ndings do not imply ITO is
easy to undertake or always the right solution for an IT problem
but certainly it indicates that ITO has become a common and
often benefi cial tool for CIOs and their organizations to employ.
The last three EquaTerra studies referenced above, however,
highlight that outsourcing satisfaction levels can improve,
especially in HRO. That said, the levels are still positive and
above average. It is also important to note that multi-process
outsourcing, as addressed in these surveys, is still a relatively
immature industry. In HRO, for example, EquaTerra estimates
that there have globally only been 75-100 HRO deals involving
fi ve or more of the 22 HR processes. This is a small percentage
of the potential buyers for HRO. In many respects these early
adopters and their service providers are still learning what
its takes to undertake outsourcing of this scale and scope
successfully and hence are experiencing lower satisfaction levels.
Many of these larger and more complex deals have also
occurred relatively recently. This is important because
satisfaction levels in the early stages of deals, for example, is
lower during the typical 12 to 24 month transition period than
it would be in the steady-state or later in the deal (see Figure 1
from the EquaTerra 2006 market study, sample size 310). This
is because transition is inevitably painful and buyers also often
have unrealistic expectations about immediate outsourcing
improvements. Buyers also often initially under-invest in
outsourcing governance. Later into engagements buyers
typically increase their governance investment which drives
performance improvement often because buyers have a better
understanding of what it takes to make outsourcing work well.
While the ITO market by most measures is more mature
than other types of outsourcing addressed in these research
efforts, ITO buyers and services providers are in a dynamic and
rapidly changing market that tests their abilities to continually
improve service quality. Hence, despite its maturity, the ITO
market does not have markedly higher satisfaction levels. ITO
has experienced the most “mega-deals” that are inherently
challenging to deliver successfully. ITO is the most globalized
general and administration outsourcing category and the
service provider market is the most dynamic. ITO efforts also
have to deal with a very rapidly changing IT hardware and
software environment (e.g., the Internet, “e-business,” ERP, Y2K,
open source and other IT life events of the past 10 years). The
terms of most ITO deals, for example, are longer than the
lifecycle of the underlying technology.
Another means to test outsourcing satisfaction is to determine
the future investment plans for current outsourcing users.
Here EquaTerra also fi nds the message positive on outsourcing
performance and bullish on its future. Across multiple market
studies, EquaTerra assessed future ITO and BPO investment

Approximately one third of buyers
surveyed planned to maintain their current levels of outsourcing.
Approximately 25 percent in each study planned to expand
outsourcing’s usage either in the same functional area currently
outsourced or in new functional areas or in new geographies,
divisions or business units. Less than two percent of respondents
indicated that their organizations planned to curtail or eliminate
their outsourcing efforts. Note that respondents in these studies
could select more than one response, which is why totals exceed
100 percent.
In aggregate, therefore, current outsourcing buyers are much
more likely to expand their outsourcing efforts rather than
maintain current levels and rarely were they planning to fully
bring work back in-house. This investment trend would seem to
clearly indicate most buyers are satisfi ed with the return on their
outsourcing investments.
The “curtail” or “eliminate” outsourcing response levels are much
lower than the third party research cited in Figure 1. Setting
aside potential issues with research quality on either side, there
are some other potential causes for the extreme variations.
One is that EquaTerra’s market research studies focus on larger
buyer organizations. As noted, respondents are typically from
organizations with more than $100M in revenue and typically are
from fi rms with $10B or more in revenue. Larger organizations
with larger outsourcing investments are typically more
experienced and more committed to their efforts. Similarly,
EquaTerra research studies focus on deals with greater scope in
terms of multi-process or multi-functional efforts often involving
multiple geographies and business units. While efforts of this
scale are more complex, they are also potentially more rewarding
and buyers are more dedicated to driving their success.
What matters most is that buyers ensure that they understand
the demographics of any market research effort when
determining how applicable it is to compare to their own
situation and effort. If a F100 outsourcing buyer is undertaking
a global, multi-process HRO deal it is of little value to know that,
for example, small cap buyers of modest offshore application
development efforts often terminate their projects before the
original completion date. Just as outsourcing success requires a
business plan tailored to buyers’ individual needs and situations,
so too must comparative efforts to understand market trends
and best practices. It is for this same reason that EquaTerra
often takes issue with classic outsourcing performance
benchmarking efforts; too often they are not comparing
like situations or make extrapolations based on underlying,
inaccurate or incomplete data. We will address issues with
performance benchmarking in a future EquaTerra Perspective.
In contrast, several recent research studies do not present
outsourcing as a viable approach (see Figure 3, next page). In
an attempt to help current and prospective outsourcing buyers
better understand the reality of current outsourcing market
trends, this Perspective aggregates EquaTerra market research
on ITO and BPO buyer satisfaction levels and future investment
plans. These fi ndings reinforce the EquaTerra position that,
despite its problems, outsourcing has been proven as a viable
business tool for enabling process improvement and cost
reduction.
How are Outsourcing Buyers Responding?
It is clear from the EquaTerra market research that most
outsourcing buyers are continuing to invest in and expand
their outsourcing efforts. Buyers also are becoming more
sophisticated in their efforts. This sophistication manifests itself
in several ways:
• Buyers are more likely to pursue multi-sourcing efforts
and spread work across multiple service providers and
engagements. In some cases, often in HRO, this is a result
of not being able to find a single service provider with
the capacity and desire to take on a “mega-deal.” More
often, though, it is recognition of the potential benefits
of multi-sourcing. These benefits are derived from using
specialist service providers for certain functions and
processes, deploying incrementally smaller but more
manageable deals, diversifying risk, and taking advantage
of a burgeoning market of qualified service providers. It
is important for buyers to recognize and weigh, however,
the increased cost and complexity of multi-sourcing both
in the sourcing process as well as ongoing outsourcing
governance.

How are Outsourcing Service Providers
Responding?
Leading ITO and BPO service providers today are reacting to the
outsourcing learnings that have occurred in the market over
the past several years. They are improving their deal pursuit
processes to better ensure they are not chasing after potentially
bad or unprofitable deals or clients. Executive management
at most firms have better insight into and involvement in
the pursuit of major deals. Leading providers are also better
managing their pursuit costs and focusing on the most
appealing opportunities.
The ITO market has been reinvented by the extensive use of
remote, lower cost resources. India-based service providers
have excelled through this model but multinational ITO
providers are rapidly expanding their own lower cost market
footprint. Both groups are expanding rapidly to emerging
service delivery locations like the Philippines, Central and South
America, Eastern and Central Europe, Russia, and China. While
the initial focus was on lower delivery costs via labor arbitrage,
the emphasis now is on exploiting the use of highly skilled
resources and creating truly global service delivery models.
Global ITO also had moved beyond application development
and maintenance to support commercial packaged application
services and most recently infrastructure and operations
services. So while the ITO service provider market is most
mature in the general and administration space, it is still very
dynamic and rapidly changing.

Major BPO service providers, particularly in the HRO space, are
still often struggling with capacity issues. This is in part of a
function of operating in a maturing market and highlights
the complex nature of deals that are being constructed. All
BPO service providers need to better sell and deliver more
standardized service offerings, emphasizing the value of
successfully delivering a service over the appeal of a more
complex and unique service that may prove more difficult to
successfully deliver profitably.
While multinational service providers’ continued expansion into
lower cost markets will help their margins, it also gives them
access to additional talent to address capacity constraint issues.
Western expansion by India-based service providers is helping to
support their efforts to move from the ITO space into the BPO
space, an effort most are succeeding at though still on a small
scale. Multinationals, however, need to continue to work to
improve their remote delivery capabilities while providers from
lower cost markets must continue to successfully manage rapid
growth levels and continue to build out their specifi c business
process and vertical industry capabilities.
The Advisor Perspective – Critical Points to
Consider
Buyers of outsourcing services need to determine if, when and
where BPO and ITO are suitable business tools to deploy in
their organizations and understand how these relationships are
likely to change over time. Keen focus is not only required on
building the outsourcing business case but also on ensuring the
skills, resources and commitment exists to successfully execute
on and then manage and govern the outsourcing effort.
Critical to outsourcing success for buyers is to understand
what has and has not worked for their peers. While every
outsourcing effort is unique, buyers can learn much from the
experiences of their predecessors. This is why it is important for
buyers to track and monitor success levels for outsourcing in
the market as well as monitor the nature of future investment
plans. Buyers must use caution, however, and ensure that
any market assessments they are reviewing are accurate and
applicable to their own circumstances.
Recognizing that while outsourcing satisfaction levels are
positive and the market continues to grow, buyers should still
identify typical problem areas in outsourcing and proactively
address them. Here are some common pitfalls that buyers
should strive to avoid:
• Outsourcing decision criteria and their relative importance
are poorly defi ned: If outsourcing goals are not clearly
defi ned, it is diffi cult to determine if they are ever met.
• Shortcuts are taken to expedite the deal: Buyers must take
the time and seek the advice and expertise needed to
build a business plan and identify and negotiate with the
appropriate service provider as well as plan for the transition
and governance work. Rushing the outsourcing courtship
can lead to a troubled marriage.
• The choice of the commercial model is disconnected from
change drivers: Contractual obligations, service levels
and pricing should drive the service provider towards the
desired outsourcing goals. For example, maximizing cost
reductions typically does not mix well with improving
service levels.
• The governance and retained organizations are poorly
designed and implemented: Buyers must begin to plan
early for the outsourcing transition and subsequent
governance efforts. Adequately staffi ng the retained and
governance organizations and deploying solid policies,
processes and procedures are critical to outsourcing
success.
• Unrealistic or poorly communicated expectations about
what changes will occur when outsourcing occurs: Buyers
must focus on change management and better manage
both user and executives’ expectations. Things are typically
worse, not better, during the early stages of an outsourcing
effort and buyers must prepare for this likelihood.
• The focus is on fi rst and second years’ savings rather than on
balancing short- and long-term benefi ts: While quick hits
are important, buyers must view the outsourcing process as
a journey and not as an event.
• Buyer and service providers are unable to manage change:
Because outsourcing is a journey, many unexpected events
will occur. Processes, trust, open communications, and
executive-level involvement and support on both sides are
critical to managing this change

IT Outsourcing Governance

THE NEED FOR GOVERNANCE IN OUTSOURCING

As technology has evolved and become increasingly pervasive, there isn’t a business function that isn’t in some way enabled by technology. The point at which business finds itself today is one of “IT is the business,” and vice versa. IT cannot be viewed any differently than the fundamental business processes on which the organization operates.

In fact, IT is now as integral a part of business as is financial reporting, manufacturing processes or even chairs and desks. In the coming years, it’s possible that the roles of CIO and COO will become one in the same, and IT capabilities will ultimately dissipate into the organization as
fundamental operating skills required by any executive. This complete integration of IT into the business causes information to become the driving force, not any specific technology.

To ensure that IT outsourcing companies — who operate with a tremendous amount of responsibility in our new age of compliance and oversight — are indeed working to further the interests of their partners and not just themselves, companies often create a framework within
which the outsourcing partner must perform. It’s within the bounds of this outsourcing governance framework that many relationships will either succeed or fail.

Since the 1980s, there’s been a great deal of discussion and posturing on both sides of the company-outsourcer fence regarding the structure of outsourcing governance. However, we’ve learned that all the rules in the world won’t ensure the successful deployment and management
of an outsourced relationship. Clearly, the need for effectively defined mechanics and service levels is important, but all those checks and balances are only as good as the cultural alignment of the two partners.

Symbyo Technologies has developed a fairly simple definition of cultural alignment through our years of providing outsourced information technology services to mid-market businesses. We believe that the recipients of services should be able to trust the motivations of the provider of those services. This sounds easy but is in reality, very hard to achieve.

Although it’s often misunderstood, outsourcing is not a new concept. The fi rst supply and demand relationship was effectively the outsourcing of a specifi c set of functions. When you purchase a packet of frozen peas at the grocery store, you have effectively outsourced the growing, harvesting, packaging and delivery of those vegetables. It’s just another case of demand aggregation equating to improved price-performance, predictability and quality of service. Or at least that’s what it should be.

Many have read the historical and projected statistics for failed outsourcing relationships, as well as the myriad of cited reasons. The bottom line is that IT outsourcing is a maturing industry that requires vendors and customers to recognize the fluid relationship dynamics required to drive a successful partnership.

The skills needed to manage an outsourcing vendor are most likely different from the skills required to run your current IT department. Obviously, the more complex your needs, the harder it is to ensure price-performance, predictability and quality of service on the part of the
outsourcer. That’s the primary reason for ensuring cultural alignment and a clear process of governance.

THE GOVERNANCE PROCESS
Toward the goal of creating a powerful outsourcing governance environment, we see three distinct phases in the lifecycle of building a trust-based relationship: selection of a vendor, establishment of the process and living within the ongoing partnership.

WHEN SELECTING A VENDOR
> Be informed on both sides. The process of governance needs to start at the selection phase. When selecting a vendor be sure to include criteria specifically targeted at governance. Also, work hard to understand your vendor’s business model. If they cannot convey how their business makes money, how could they possibly build a longterm, winning scenario for you? And if you believe your prospective outsourcing partner doesn’t understand your business, then keep
looking.

> Check your vendor’s references. Not the ones they want to give you but the ones they don’t want to give you — tell potential vendors you’d like to speak with ex-customers. Review the potential vendor’s recent press releases and look at the different stages of their customer
relationships: transitioning, steady state or contract term expiration.

Instead of asking for three references, ask for the complete customer list and select customers that you believe most closely match your profi le.

> Look in the mirror — objectively. Consider how your IT department is viewed internally. Is it a department of business-savvy IT professionals who are aligned to the primary objectives of your organization? If it’s not, is that what you’re looking to fi nd in an outsourcing partner?
Do parts of your team function more effectively than others? Understanding what you have is the lion’s share of defining what you need.

It’s also important to fully understand what your customer — the end user — wants from IT. Is IT viewed positively and as being successful in your company? Is IT a strategic enabler or a necessary evil? The answers to these questions are essential clues to finding the best outsourcing vendor for your needs, and not simply taking the recommendation of one company.

> Turn back to plan ahead. When considering how best to manage your outsourcing services vendor, you should revisit why you decided to, or why you are considering outsourcing in the fi rst place. This primary motivation should then be able to be tracked through all aspects of
governance.

Is your primary motivation strategic transformation? Or is it improved quality of service, cost containment, or a combination of the above? With these factors in mind, does your planned or current governance strategy support those objectives?

For example, if your primary motivation is strategic transformation, how are you going to measure the success of that transformation? When are you going to measure it? And what happens if your goals aren’t reached? These are all factors that play a role in creating a successful, long-term outsourcing relationship with realistic expectations and well-defined
metrics for measurement in place

the long-term. The outsourcing vendor’s approach to problem resolution must align with your business needs.

Cultural compatibility — Beyond understanding the nature of your business, your outsourcing partner must understand and be compatible with your corporate culture, regardless of the size of your company. The mechanics of governance are only as good as the cultural compatibility
between the customer and the vendor.

Resilience of communication — Another aspect of ensuring continued alignment is a multi-level communications framework. A successful communication structure is best served by multiple interaction points at varying levels of seniority between the client and the vendor.

Face-to-face meetings — As in any good relationship, there’s no substitute for frequent, face-to-face meetings. If the outsourcing partner isn’t geographically close, work out a schedule in advance for meetings and protect those dates. Video conferencing and collaborative online meetings can also go a long way toward fostering open, honest communications.

Senior leadership involvement – On both sides of the partnership the involvement of strong, senior leadership is paramount to a successful governance program. It’s only through this involvement that the needs of the business can align with the service delivery program. Both parties must communicate on a strategic, not cost-center basis.

Key functional users — Your outsourcing partner must possess a fundamental knowledge of your primary business processes that are supported by the enterprise systems your business uses, such as enterprise resource planning (ERP). Unquestionably, you’ll want to partner with an outsourcing fi rm that has a solid understanding of the functional aspects of these complex systems, and recognizes the strategic importance they hold for your business as well.
Advocacy — Does your outsourcing vendor have a separate management structure for customer advocacy in addition to internal operational execution? One person wearing many hats may sound good for economies of scale and price-performance, but it will cost you intimacy with your vendor.

Flexibility — A vendor needs to be able to react to the changing needs of customers. While most vendors are very flexible with regard to expansion of services, few are equally fl exible when it comes to accommodating change or reduction of services. This is a key factor to the longevity of a relationship.

As you work to establish your governance process, align on the principles behind specific goals. As with compliance, the best governance structures are built on principles and guidelines instead
of rules.

We believe the governance process should not just be focused on the quality of specific services, or the contract terms and conditions.

It should prevent value erosion, and the preservation of the end user experience. So, as you work to establish and maintain cultural alignment, don’t build a structure that motivates your outsourcer to merely satisfy the contract as opposed to satisfying the customer and
delivering value beyond the statistics.

That said, effective measurements are critical. But keep in mind that these programs need to exist to support the primary motivation for outsourcing, which in almost all cases will be to support the company’s business model and overall corporate goals.

Following are a number of mechanical and tactical aspects that you should consider wrapping within your governance process, and some questions you should be asking in each area:

Customer care model — Be sure to clearly articulate your expectations when it comes to customer care. How often will there be communication? How many customer managers will be assigned to your account? What kind of reporting structure will be in place? How flexible is the outsourcing partner in terms of adapting their structure and processes to your needs?

Service Level Agreements (SLAs) — The foundation of your services package will be the SLA. It should defi ne the process, service levels, checks and balances, and reporting mechanism for your IT outsourcing agreement. Ask how your SLA will be monitored, and if you have independent access to a dashboard or other monitoring system.

Typical SLAs consist of various availability or performance metrics. Also, consider the inclusion of softer SLA components such as number of end user complaints, effective escalation adherence, etc.

Quality of Service reporting (QoS) — What kinds of standards will your agreement be measured against? Are you able to defi ne your own metrics for QoS, or are they all established by the outsourcing vendor? What time frames are involved in the reporting process, and what kinds of problem resolution structures are in place?

Adherence to IT best practices — Ask your prospective provider if they adhere to IT best practices. If so, what’s the authoritative source for these practices? All too often, IT providers will claim they follow best practices when what they actually follow are the best practices they’ve
been able to develop internally, An example of an authoritative source of best practices is the IT Infrastructure Library (ITIL), a globally recognized series of documents that are used to aid the implementation of a bestpractices framework for IT Service Management.

Problem resolution — Has your prospective outsourcing partner developed clearly defi ned issue identifi cation, escalation, resolution and communication processes? Is the extent of your desired involvement in the problem resolution process understood and clearly documented?

In Symbyo’s experience, an exemplary problem management process (and the customer’s trust in the process) is a key driver allowing IT management to focus on “strategic” priorities. These processes should go beyond what’s normally included as part of your SLA, and are a key component of building and maintaining a harmonious relationship for

LIVING WITHIN THE PROCESS
The four critical components for living within the process are leadership, cost, flexibility and business metrics:

First and foremost, outsourcing elements of your IT infrastructure or operations doesn’t mean that the need for innovative leadership goes away. Too many businesses entering into outsourced relationships underestimate the on-going management commitment associated with governance. Ensuring the involvement of the same strong leaders who helped create the outsourcing agreement is critical to effective governance and the continued alignment of principles.

Secondly, since lowering the cost of delivering IT services is often a driver for outsourcing, the outsourcer must deliver services below the cost of what a company can do for itself, while still maintaining a profit. Obviously, the reason a vendor is able to provide improved price performance is demand aggregation and predictability of demand.

Major swings in demand present difficult business issues for the vendor to solve. And their ability to take change in stride should be taken into consideration when setting expectations or crafting the mechanism of governance.

Also, keep in mind that flexibility — along with customer intimacy and effective governance — is a two-way street. An integral part of cultural alignment is understanding the fact that you are effectively creating an extension of your own business within the outsourcer’s organization. If
you treat it as such you will get signifi cantly more value than approaching the transaction in an arm’s length manner.

Lastly, revisit your primary business objective for outsourcing on a frequent basis. Create a non-SLA based score card approach to monitoring those objectives and ensure that your business does not lose sight of the original motivation. Without metrics in place, after many
years into a relationship it’s easy to forget those objectives and trend towards a dysfunctional transactional approach.

SUMMARY

The cardinal sin of outsourcing governance is one of focusing entirely on the mechanics and the price. By doing that you’ll be missing the true potential of the relationship. So spend the time and effort required to ensure an effective governance process, but don’t lose sight of the fact that without cultural alignment with your vendor, you’ll only be creating ground rules for debate, not agreement.

At Symbyo, we believe that governance in and of itself will not align IT to the business. Strong business leadership at the head of the governance mechanism is key. You can view it in the same context of IT’s role within business. The governance process — like IT — is a power tool to be wielded by a competent business leader.

Global Delivery Model - Global Outsourcing

Global Delivery Model - Offshore Development Centers & Global Outsourcing

The Global Delivery Model (GDM), emerged as a disruptive force in the industry and led to the rise of offshore global outsourcing. Today, offshore global outsourcing has gained widespread acceptance as a crucial aspect of business strategy.

Enabled by the availability of highly-educated, technically-skilled and low-cost talent in emerging economies, the GDM has achieved broad acceptance through its ability to deliver lower costs, higher quality, and productivity.

Offshore outsourcing is at the core of the Global Delivery Model, which refers to the philosophy of:

• breaking pieces of work into logical components, and
• distributing these components geo-locationally, to perform them where it creates the maximum value.

Modular Global Sourcing: Next-generation global outsourcing services
Having realized the short-term benefits of project-oriented offshore global outsourcing, experienced practitioners are looking for ways to extract additional value from global outsourcing initiatives. To achieve this goal, companies are adopting sourcing models that shorten the time required to achieve steady-state operations through efficient outsourcing Project management

Modular Global Sourcing, the next generation of strategic services outsourcing, applies the fundamental concepts of modularization to business process and IT application and infrastructure services sourcing decision making, implementation and ongoing management. Developed by Symbyo to help enterprises at any maturity level realize the full benefits of global sourcing, it provides both a conceptual foundation and a set of actionable frameworks for business and IT leaders to:

• Think about offshore software outsourcing services at an enterprise-wide level to create alignment between business, operations and IT;
• Structure business and IT assets and their execution phases in a well-defined modular fashion to achieve flexibility; and
• Act on a global level using strategic global delivery to ensure predictability of cost, quality, risk, and meeting shared business objectives.

Modular Global Sourcing represents Symbyo vision for the future of offshore outsourcing. It is a model for enterprises to be in step with continuously changing business realities. As such, it represents a conceptual shift in thinking about IT and business process services outsourcing on a global scale. At the same time, it defines a set of actionable frameworks and steps that business and IT decision makers can undertake to put the concepts into practice to realize operational efficiencies and enable business innovation, regardless of their current level of sourcing maturity.

The Global Delivery Model is a great value multiplier
The cost arbitrage of the Global Delivery Model is about the lowest form of value that you get. Part of the savings allows you to invest in more quality time for the definition and design phase of the solution. This increases your odds of gaining a competitive advantage. Further, savings from Global Delivery Model (GDM) allows you to invest in pilot projects, which you couldn't have because of resource constraints. This adds to your competitive advantage as well.

Symbyo' Global Delivery Model (GDM) is driven by the highest process and quality standards in the world and using the best GDM Tools.

Symbyo Global Delivery Model offer you a twin value multipliers:

• Assurance of the best product quality, which cuts down costs of fixing defects, maintenance and hence, the TCO
• Advantages coming out of the continuous improvements, which keep improving all the key parameters.

Leveraging Global Delivery Model (GDM) also gives you access to the best global talent and access to years of experience stored in our knowledge management systems. This increases your chance of innovating.

And above all, the industry-benchmark Symbyo predictability lets you sleep well at night. What can be a greater value multiplier than that?

software Outsourcing Project Planning

It doesn't matter which industry you're in or project you're involved with, these 5 steps should be taken every time to properly plan your project:

Step 1: Set the Direction

Before you start out, set the direction for the project. Do this by clearly identifying the project vision, goals and deliverables. State the overall timeframes for delivery and clarify the amount of resource available. Determine what is "in scope" and "out of scope". Identify the benefits and costs in delivering the project and any milestones and constraints. Only once this is agreed with your Project Sponsor will you know what it is that you have to achieve.

Step 2: Task Selection

You're now ready to start planning. Identify the groups of tasks that need to be completed to build your project deliverables. Then for each group of tasks, breakdown those tasks into sub-tasks to create what is known as a "Work Breakdown Structure" (WBS). Your WBS is essentially a hierarchical list of tasks, in order. Assign start and end dates to each task, as well as task durations. Always add a little extra time (e.g. 10%) to your durations, providing you with contingency. Next add Milestones to your plan. These are tasks that represent major achievements along the way.

Step 3: Inter-linking

The next step is to add links (or dependencies) between project tasks. While there are a variety of link types, most Project Managers add "finish-to-start" links so that one task cannot start until another one finishes. To make your project achievable, only add links between tasks if there is a critical dependency between them. Remember, when one task slips, all tasks linked to it may slip as well. So use links wisely.

Step 4: Resource Assignment

Now comes the fun part, assigning resources. A "resource" may be a person, equipment, location or materials. Against each task in your plan, assign one or more resources required to complete it. As you assign resources, watch your resource utilization. In other words, make sure you don't over-assign a specific resource to multiple tasks, so that it’s impossible for that resource to complete everything assigned to it. Project Managment Software makes this easy for you, by telling you the resource utilization as you assign resources to projects.

Step 5: Baseline, Actuals and Reporting

With a fully completed project plan, you're now ready to save it as a "baseline", so that you can later compare your progress against it. Then start recording your actual progress against the plan. Every day, record the amount of time you've spent against each task. Also record the new planned start and finish dates, and monitor the overall project completion date. Report on progress as you go. By regularly updating the project plan with your progress, you can control the delivery of your project and meet those critical goals set.

Bridging the Gap between Offshore Outsourcing Strategies and Execution

Offshore Outsourcing now a day is no longer considered a tactic. High performing companies consider offshore outsourcing to be an important strategy required to gain the competitive edge needed to win in today’s aggressive markets. Usually those companies would have a well defined outsourcing strategy that is intended to align the actions of all individuals, teams and business units to achieve the corporate goals related to offshore outsourcing. But when it comes to execution they can run into trouble – especially during the significant times of business change that happened during the launch of the offshore outsourcing initiative. The reasons for this gap vary by organization, but typically include the following:

• There may be insufficient executive’s sponsorship for the offshore outsourcing strategies and the outsourcing initiatives, or an organizational culture that does embrace measurement – leading to insufficient measurement of the performance of the outsourcing projects initiates.
• Outsourcing strategies that are not communicated in a way that employees understand – so they don’t see how offshore outsourcing can benefit them and help there company grow while allowing them to maintain their jobs. Also middle management doesn’t know how to evaluate their business processes to find out which one is most suitable for outsourcing.
• It’s is unclear who is accountable for ensuring execution of the software outsourcing initiatives, projects and tasks.
• Incentives systems are not linked to strategy, so individual’s goals are not aligned with the company’s goals. Consequences and rewards for employee’s choices are inapt.

To close the gap between outsourcing strategies and execution, companies need to build strategic alignment across all levels of business. Symbyo Technologies offers IT Outsourcing Consulting services to help you bridge the gap between outsourcing strategy and execution and help your company align its outsourcing initiatives to your corporate goals.