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First time outsourcing, a new path to success

india Updated: Jul 24, 2007 02:19 IST
Ganesh Natarajan
Ganesh Natarajan
Hindustan Times
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Impact of external factors like the rising exchange rate of rupee against all global currencies on the exports sector of the economy has begun to show in the top and bottomlines of the IT industry.

But the confidence of industry CEOs is high about the vast global opportunity that global offshore outsourcing still presents and efforts are on in most significant companies to weather the currency storm and increase focus on profitable business development and execution through innovative ways.

Innovation in this industry consists of two opposite yet complementary thrusts. Looking inwards where many tactical moves are possible including training and preparing the new generation of industry entrants to participate in global IT and BPO projects, developing multi-skilled work force to enhance deployment-flexibility, and a sharper focus on operational excellence.

On the customer acquisition front, while the traditional focus on large volume applications support and development deals continues and expertise across a range of enterprise package software implementation, migration, hosting and support is intensified, the big white space of first time outsourcing customers is another significant opportunity that can fill revenue and profit gaps in the medium term.

In the last article in this column, the key concerns that many CEOs and CIOs have expressed — loss of control on applications, fear of sub-optimal cost and quality benefits, and the difficulty of managing suppliers with high process quality standards and different cultures, have been mentioned as potential stumbling blocks in any attempt to get the thousands of firms — global and domestic, to take the plunge into outsourcing.

Our own recent successes at Zensar have shown that the approach and methodology to this segment needs to be designed with care. But once the difference in approach and a truly collaborative outsourcing methodology is developed and understood, the fruits of new partnerships are indeed sweet.

Engagement at senior levels in the vision and execution of outsourcing, something that even larger companies have sometimes failed to do as they develop an attitude of piecemeal or tactical outsourcing, is one key differentiator that presents both a challenge and an opportunity.

Workshops to articulate the specific firm benefits for the firm can lead to a robust applications portfolio analysis for outsourcing and ensure that the four key factors that have to be managed for success. These are the business processes to be optimised, the technology both for existing applications and for management of the new outsourced processes, the ongoing engagement of key leaders and managers in maximising the benefits garnered from outsourcing and the preparation of a facilitating organisation culture to enable all participants to willingly and effectively play their role in the transition to the new ways of working.

There is often a fear that smaller firms will be more difficult to sell to as well as support and the time required to achieve success with first time outsourcers could probably be more profitably invested in a renewed thrust on large deals. As the industry expands, it is sometimes the breaking of these paradigms that can give as much joy and success as continuing to tread the beaten path.

(The writer is Vice Chairman of Nasscom and Deputy Chairman and MD of Zensar Technologies)