End of my Indian Odyssey

On Monday in Bangalore I visited a major international IT service provider that had established an Indian presence. It was an interesting contrast to the other service providers given its global presence. There was a different feel to this service provider that in the main felt related to the fact that it was initially a global organisation that brached into India as a mechanism to deliver lower cost services as opposed to an organisation that was born and bred in India. The experience was different. It felt much more like a visit to a service provider in Europe and less that one in India. In some ways the difference was felt most palpably in how they treated their staff. Over a lunch with a range of people from different levels in the organisation (and without any management
presence) I commented that they all seemed to be very smart people and could get a job with any company. Why then had they chosen this organisation? Career opportunities and high quality training was the common theme that came through. This was a fascinating insight that proves what many organisations, including my own, think at home and most especially given the quality of the people that I met during my visit to this organisation.

Having completed my visit to Bangalore I moved on to Pune where I visited two organisations. One in particular is worthy of mention as it was such as contrast to the organisations I visited. For the sake of clarity the other organisations I visited would be regarded as tier 1 or near tier 1 organisations. This organisation on the other hand was relatively new to delivering offshore IT services. While the people we met tried their best it was clear that in terms of almost all the criteria we were evaluating they were in a different league. For this discovery alone our visit was worthwhile.

A couple of other points from my trip this week are also worth noting:

1. IT Salaries in India are growing at 15% per annum and some Indian commentators feel that very soon it will be as cheap to deliver services from parts of Europe or the USA as India. India needs to decide how to respond to this.

2. The importance of a Disaster Recovery and BCP plan cannot be overstated. One service provider we talked to told us of a recent event where one of their offshore delivery centers experienced 900mm of rain in one day alone!

3. Visas continue to be a major issue for Indian vendors wishing to provide landed resources. Those that can provide locally based onshore resources clearly have an advantage in this environment.

4. The view of individual CIOs and position in the outsourcing contract can mean that previously outsourced services are insourced to a local or captive offshoring organisation at short notice and for no obvious reason.

In less than four hours I will be heading to the airport in Chennai to fly home. It has been an interesting trip covering 4 cities and 21,000kms. It is clear to me that European organisations cannot ignore the opportunities that Indian offshore service providers offer and need to find more effective ways of leveraging them. Likewise, Indian service providers need to figure out how to continue to provide cost effective services in a high inflation environment. I look forward to seeing how things develop.

Indian Odyssey Part II - Banaglore to Chennai and Back Again

Following my trip to Delhi I moved on to Bangalore for two days to complete my assessment of the first service provider and start my assessment of the second one. From Bangalore I then moved on to Chennai on the South West coast on Wednesday evening.

There are a couple of things from these visits that I thought worth sharing:

The power cuts I refered to in my previously blogs continued with nobody, including me, even blinking now when we temporarily lost light during meetings as the backup generators kicked in.

Physical Security is big business in these outsourcing centers. In all locations I have visited there is a thorough check at the entrance gate of the taxi I arrive in for bombs or similar material. This includes scanning the car, using mirrors to check underneath the body and opening every door and boot to examine the inside of the car. Incidentally this also happens at all the good hotels and while it feels unusual initially you become very accustomed to it.
Once inside the building you go through the usual sign in procedures, however they also take down the serial number of your laptop, ask you how many USB sticks you have and sometimes if you have any cameras. While on the face of it this security seems to make sense I am always surprised when I just walk straight out the door at the end of the day without any checks. This begs the question as to what the purpose of the entry check was as they have no idea if I have switched laptops or put data on the USB sticks!
Internally the buildings are divided into Offshore Delivery Centers (ODCs). Typically each ODC serves an individual client and in some cases an individual client project or programme if security requirements differ between projects. Physical access to the ODCs is determined by client requirements. The most stringent I have seen is the one where access to the ODC is based on a fingerprint scan, employees must leave their mobile phone with the security guard at the door to the ODC and once inside is unable to print anything, access the internet or send emails outside the client network. Secure indeed.

What we have seen in terms of retained client organisational models is also interesting. To date we have discussed at least 6 client retained organisational models and none are the same. The models have varied from 10:90 onshore/offshore ratios to 50:50, to clients having their own management staff in the offshore locations to ultra thin models where the client has a relatively thin vendor management organisation only. The choice of model is largely driven by the maturity of the relationship between the client and offshore provider, the complexity of the programmes being delivered and the client's risk appetite. Interestingly when we spoke to the client who had their own management staff co-located with the offshore provider they were convinced that the quality of the work delivered had improved significantly as a result.

The other thing that strikes you as you go from one provider to another is the number of well known organisations exploiting offshore IT services and the scale of the engagements which in some instances is in the 1000's. This is also reflected in the hotels which seem to survive largely on the presence of groups of business people visiting their offshore teams.

The final thing of note is the company cultures which were evident in each of the service providers we visited this week. Despite the obvious cultural difference we could clearly detect a difference in company culture between the two service providers we met. We will have to consider the consequence that these differences would have on service delivery.

It has been an interesting week with a huge amount of information absorbed and a detailed on the ground view of industry here emerging. I am currently back in Bangalore in preparation for a two day visit to the next service provider beginning Monday. I will blog again after that visit.

India Installment 1

Having arrived safely in India in over the weekend after a long but comfortable flight, grabbed a few hours sleep and taken a very quick tour of some of the sights of Delhi I visited the first of 4 IT Service providers I will visit on this trip.
My first impressions are of a vast, highly capable IT industry. IT companies are concentrated in dedicated IT parks. Everywhere you go in these parks you see the big IT names from IBM to Wipro to Dell. Yesterday I spent in Delhi, one of the many locations that this service provider operates from in India. Today I spent in Bangalore in another facility of the same organisation. Both IT parks and facilities were of a very high standard, though much building is still underway and the road infrastructure is stretched beyond capacity (driving by the way is not for the faint of heart over here and indicators seem to be rarely if ever used in favour of car horns). One interesting thing I discovered this evening was that there are frequent, purposeful power cuts all over India in an attempt to match supply and demand. I noticed the lights dimming several times during meetings yesterday but had put this down to motion sensors doing their job. Today I found out that this was actually the UPS devices kicking in and out. It must have happened 4 or 5 times during the day. Every company has their own generators and the IT business parks can typically run for 7 days in the event of a power outage. Given their importance there are also backup UPS devices for each generator.
Beyond facilities I have been very impressed with the calibre of people I met at all levels. Additionally, many of the stories I had been told around behaviours in terms of blind deference to more senior managers and always saying 'yes' have certainly been dispelled in terms of those I have met to date.
Tomorrow I am staying in Bangalore to start a 3 day visit (again split across two cities in India) to another service provider. Tomorrow night I move to Chennai to visit their second facility.
I'll post again after that visit.

Watch here for my Impressions on Offshore Indian Technology Service Providers

Next weekend I am heading to India for two weeks to visit four offshore technology service providers as part of a vendor evaluation process. I won't be able to provide specific details on what I see at each service provider as I am undertaking the visit for a client, however I will be able to provide you with my overall impression of the industry as I travel around India.

Watch here for my impressions on what I see - time and wifi permitting!