Strenthening Team Effectiveness

Teams bring together individuals with diverse perspectives, experiences, and backgrounds. Working inclusively and collaboratively allows us to deliver unique insights and greater value to our clients. Teamwork also spurs continuous innovation to help grow and strengthen our business.

In an outsourced environment, this proves even more challenging with dispersed resources impacted by time and geographical constraints.

We know that teams and groups fluctuate between different stages of development before becoming fully highly functioning; however, needs of individual members’ on the team similarly can change, impacting individual and overall team effectiveness.

According to Marcus Buckingham and Curt Coffman, these individual needs include:
1. Understanding the expectations of their performance;
2. Understanding how others on the team perceive their contributions;
3. Feeling a comfortable fit between personal and team values;
4. Knowing what learning and growth opportunities exist.

If all these needs are met by the team and leader, it increases the odds that individual team members are highly engaged with a reoccurring sense of achievement. If some, but not all, of these needs are met, we can expect these team members’ engagement levels and productivity to decrease over time.

As a leader, how can you ensure your team has a strong foundation? Focus on helping individuals fulfill needs #1 and #2 through regular feedback discussions… this will make it easier for individuals to fulfill needs #3 and #4.

while it is easy to deal with resources onsite and present in front of you, it becomes important to visit offshore locations where most resources are or if you have few one-off resources outside allow them come over to a common meeting place once in a while to establish that rapport with you and the broader team members and provide a forum to accomplish the above.

Actively taking steps to strengthen the effectiveness your team will result in an organizations overall ability to meet, and exceed, clients’ expectations better and faster.

Why not take the first step today?

Surviving with virtual teams in outsourced environs – Part I

The last decade has changed entirely the world of IT. Rapid outsourcing has created new opportunities and challenges with the ever increasing workforce that has gone virtual.

During one of the routine Project Managers meeting that I preside over, I was talking to a project managers d was asking them how things were going with their projects. One of them said that he had just been assigned a project where almost everyone on the team was remote “There’s just no way to manage the project properly – he chimed. For those that cannot adapt to this environs it makes it really challenging to survive leave alone being successful.

This is a fairly common sentiment. lets understand some approaches that will help to make those projects successful.

Before we start, let’s have a little sober taste of reality. In the global economy that we all now work in–and with the constant pressure to do more with less–virtual teams are a reality. Whether it is outsourcing work, leveraging internal expertise that exists in other offices, supporting remote workers or any of a hundred different variations, if a project manager cannot successfully deliver projects where at least some of the resources are working virtually, then that project manager won’t have a job for very long.

At the most basic level, challenges with managing virtual teams come down to communications. Because the team members aren’t all in the same place, there are more barriers to communication–resulting in communication delays, a lack of clarity in what is being communicated and the potential for communication loss. Technology also plays its part, some use poor technology or none at all expect everything to go seamless. There are cultural issues to deal with as well.

In recent years, there have been tremendous advances in enterprise-level project portfolio management (PPM) tools that include many features for collaboration and communication to try and overcome these barriers. But ironically, they can actually add to the problems if not utilized properly. This occurs when team members and/or the project manager rely on the tool to overcome all of the communication challenges for them and become less communicative outside of the tool (“I’ve entered the update into the PPM tool so I don’t have to do anything else…”).

In theory, the benefits of virtual teams should greatly outweigh the negatives–access to better expertise than is available on site, lower cost resources that help the project stay on budget, etc. However, communication problems can completely eliminate those benefits very quickly, and that’s what makes managing virtual teams so difficult–the downside appears very quickly whenever a mistake is made.

Success with virtual teams really can be as simple as ensuring effective communication; but creating an environment where that occurs consistently is the challenge. To me, there are a series of steps that have to be undertaken to ensure that the environment is right:

1. Build a strong sense of team. A common problem with virtual teams is a failure to view virtual team members as just as important a part of the team as the person sitting next to you. From the outset, it is vital that all team members feel that they are a part of a team of equals, all of whom are needed for the project to succeed.

2. Ensure that the person initiating communication understands that it is their job to break down the communication barriers. Too often, the person providing the communication–a team member providing an update, a project manager communicating a change, etc.–relies on the recipient of the communication to overcome the communication barriers.

3. Validate that messages have been received and processed correctly. Assumptions can be the death of any project, and with virtual teams validation requires a more conscious effort–you won’t bump into the team member at the water cooler to check that they understood.

4. Use technology appropriately. Modern PPM tools are tremendously powerful tools, but they are only as good as the people using them and the data that they contain. If people don’t understand how to use the tools effectively, then they quickly become additional barriers to communication.

5. Remain focused on the positives and eliminate any finger pointing. When teams are geographically dispersed, it becomes easier to play the blame game because people are not always able to defend themselves and personal relationships aren’t always as strong. This never helps the project to deliver and must be avoided at all costs.

Surviving with virtual teams in outsourced environs – Part II

In my last post I covered most of the tips and techniques to adapt, lets look at some more additional tips to succeed.

1. Build a strong sense of team – bringing all team members together
It’s human nature to build the strongest relationships with the people that you spend the most time with simply because you get to know them better. Relationships are more important than ever now with the new realities in workplace with lot of gadgetry and the influence of millennials. When a colleague is simply a voice at the end of the phone or a name in the e-mail directory, it’s difficult to be as invested in their success as the person sitting next to you whose hobbies and kids’ names you know. Use every opportunity to know better and get insights from others as well where feasible.

In a project, it is vitally important to build a high-performing team where each team member feels as though they do have a responsibility to each of their colleagues on the team, where they feel that they are letting their colleague down if they are late or perform badly. That means that each team member has to be “real” to every other team member.

In a perfect world, I will try and hold a project kickoff meeting with all resources onsite so that the project starts with a strong foundation of people getting to know one another. But in reality, that isn’t always possible. What I will always try and do is create an environment where everyone views their colleagues on the team as complete people, not just resources responsible for tasks. There needs to be awareness of cultural differences and respect for people’s privacy, but there are a number of ways that this can be achieved.

I do think that it’s important to try and incorporate both voice and video in these initial kickoffs. With modern technology video conferencing, Skype, webcams are readily available and it’s always nice to put a face to a voice—again, it helps to create a sense that the person is more “real”. Of course the kickoff is just the first step in overcoming the communication challenges that can exist with virtual teams, and as we continue this article next time we’ll look at the remaining steps as well as bringing everything together as a cohesive project management approach.

Break down the barriers
It’s impossible to avoid communication barriers when you have virtual teams–physical distances remove the option of face-to-face communications, time differences may limit options for telephone conversations and language barriers may make direct communication virtually impossible. However, those barriers don’t need to create problems for the team, and I always work on the premise that it is the responsibility of the person initiating the communication to ensure that the barriers don’t prevent understanding of the message.

We do this all of the time in our daily lives–we talk to our children differently than we talk to our spouses, we speak differently with friends than with colleagues, we use different styles in formal versus informal communications, etc. With virtual teams, we need to apply this same approach to our colleagues, consciously attempting to provide messages in a format that the recipient will be able to understand with the minimum of “translation”. At the simplest level, that may actually be language translation–the person originating the message should ensure that the message is translated into the language of the person who receives the message, but in many cases the need is more subtle.

Consider a situation where the project manager needs to communicate a change to a virtual team. The change isn’t occurring in a vacuum–it’s come about as the result of various discussions, it has a knock on impact elsewhere on the project and potentially beyond the project, and it may have been approved only after consideration of a number of alternatives. While a virtual team may have some awareness of that, they likely won’t have as complete a picture as the team members who are co-located with the project manager–so the project manager needs to make sure that he or she communicates not only the change itself, but also enough background information to allow for the change to be understood and accepted.

Validate messages
The physical communication of messages is only part of the solution–the other key element is to validate that the message has been received and processed appropriately. This is something that happens automatically when teams are working in the same place–a simple “Did that e-mail make sense?” or “Did you have any questions about that change request?” is all that’s needed.

When team members are virtual, validation requires more conscious effort–and it also needs to be done in a way that is constructive rather than inadvertently belittling. I know of a virtual team member who got very upset when asked if he understood a change that had been introduced; he felt that the project manager was suggesting that he was too stupid to understand it (although that may well be evidence of failings in building a strong sense of team up front).

Validation really comes down to testing assumptions that are made, and there are a number of ways that this can occur. With a team that I have worked with quite a lot, I can get away with using simple voting buttons in e-mails–an underused piece of functionality that allows for basic feedback such as confirmation of comprehension or a request for further explanation. With issues that are more complicated, I will only use push-type communication methods like e-mail to provide backup material and will address the issue in a status meeting allowing for immediate discussion and indirect confirmation that the message has been understood (“How do you think that might affect you?” for example).

In some cases, validation can be built into the project portfolio management (PPM) tool, especially when communication is from the team to the project manager. An easy example is to have the project manager review and approve task updates that are provided by the team, but in this case all tasks should be reviewed–not just those from virtual team members that could cause a sense of double standards. The validation also has to be meaningful–if the project manager approves everything automatically, then the validation fails.

Appropriate technology use
Building on the concept of building validation into PPM tools, these tools now offer tremendous support for the management of virtual teams. Many include powerful collaboration tools or are capable of integrating with an organization’s existing collaboration software, providing a consistent platform for virtual teams to work together and share information. The problems start when project managers assume that the tool is capable of doing everything and that all users will embrace the tools in the same way. Just because tools offer collaboration tools doesn’t mean that people will maximize the benefits that those tools offer–we can all think of organizations that use tools like Microsoft SharePoint as nothing more than a directory structure.

The project manager needs to work with his or her team to agree on how the different features of PPM and similar software will be used for this specific project, and needs to monitor for compliance with that usage. In some cases, there may need to be further training and support provided to individuals to help them to become comfortable with the tool, and this can also be a way for team members to strengthen relationships with one another. I have often been in a situation where one office is more familiar with a particular tool than another, and I can then ask a team member who is more comfortable using the tool to act as guide and coach for virtual team members to help them in developing their skills with the tool. Frequently, the virtual team contains the expert users on such tools and end up teaching the “home” team on how to make the most of the tool.

Remain focused on positives
One of the biggest challenges with virtual teams occurs when things start to go wrong on a project. Because virtual relationships between team members are often not as strong as the relationships with people who are co-located, cliques can quickly develop resulting in people “taking sides” and pointing blame at others. This most obviously shows itself when the virtual team is from a vendor, but it also happens when everyone is with the same organization. Often the remote workers feel as though they are the victims because they don’t have immediate access to the project manager or key stakeholders, and they therefore don’t feel as though their positions are given fair representation.

It is vitally important that the project manager helps teams to stay focused on resolving problems and not pointing fingers at one another; he or she must clearly be seen to be objective, never allowing any suspicion that one group is being favored over another. While the steps described above and in the last article will help to create such an environment, there is still the potential for difficulties when problems arise. The PM must lead by example and act swiftly to correct any inappropriate behavior. During such stressful times, the barriers to communication may be greater, so the PM should focus on the best possible means of communication–telephone over e-mail, and ideally with voice and video to ensure that body language is also communicated and the potential for misunderstanding is minimized.

Conclusion
From what we saw in the last two posts it is no more apt to say this is “impossible” to be successful with a virtual team, virtual teams were becoming the norm so PMs would have to be able to manage them if they wanted to continue managing projects. Virtual teams have been a reality for many PMs for many years, but it is fair to say that they are still intimidating for many PMs and are viewed as somehow “different”. A quick browse of job boards reinforces that sense–many ask for experience with virtual teams if they are going to be used as if it is a different skillset than traditional project management.

lets also remember that fact that it does a disservice to those people who work virtually. Success with virtual teams comes from an ability to focus on effective communication and building teams with strong bonds between the team members–not always simple to do, but also not something that is fundamentally different from any other form of project management. If a PM finds that “impossible”, then I suggest that they look at their own skill set before anything else!

Backsourcing..

Backsourcing as definied by Wikipedia is the process of bringing jobs previously outsourced back under the roof of the company to be performed internally.

Backsourcing has been increasingly discussed as companies decide to cease outsourcing operations, whether because of the issues outsourcing agreements encounter, because of pressure to bring jobs back to their home country, or simply because it has stopped being efficient to outsource a given task outside of a company. Backsourcing is sometimes substituted and confused with “in-sourcing”, however in-sourcing simply refers to conducting certain activities in-house (whether or not by a third party),while backsourcing refers to bringing previously outsourced activities back in-house.

There is a phenomenon called the “paradox of choice.” It argues that though we want many options, in the face of a large number of possibilities we tend to make decisions more impulsively, or not at all. In other words, too much choice prompts us to be reactive rather than strategic. And that can be the case when faced with the decision to outsource, in-house, or contract for some tasks while outsourcing others, and everything in between.

According to recent reports, backsourcing — also known as insourcing — has been increasing over the last four years. The best-known examples include such companies such as General Motors, JP Morgan Chase and American Airlines.
Computer Economics recently released its survey report, “IT Outsourcing Statistics: 2013/2014” which shows a trend towards a decline in outsourcing.
According to these statistics, outsourcing is down from an average 11.9% in 2012 to 10.6% in 2013. http://www.computereconomics.com

There was a time when outsourcing was the standard go-to answer. For about 15 years, 90% of businesses in North America favoured outsourcing first and foremost — albeit, it was its perceived cost-saving factor that drove the trend.

But as every technologist knows, in our industry change is the only constant. Today, outsourcing is no longer the obvious or simple solution. It has become far more complex given the explosion of mixed sourcing models, such as staff augmentation, managed services, out-tasking, project-based consulting and cloud service providers. Some firms felt the total lose of control which held them ransom to business and exposed them in front of their competitors. E.g. a large company in mid west could not launch their life saving production platform due to delays by their outsourcing provider and went into bankruptcy while their competitor had insourcing arrangement to fill the gap.

That said, outsourcing of IT is still predicted to continue to be a major part of IT budgets. Certainly, outsourcing can be a magic bullet in some cases. But in others –not so much. every firm needs a different type of outsourcing model, this is perhaps the bane, many firms make the mistake of choosing a wrong model or going with just single model merely looking at the cost savings.

More and more IT leaders say they are learning this fact the hard way – hence, the rise in backsourcing. A Forrester study conducted last year shows 32% of 1,000 IT professionals who had been using third-party service providers plan on ending the relationships and bringing the work back in-house.
The main reasons listed for their change of heart include:

1.Poor quality of service.
2.Savings were not as high as expected.
3.Geo political disturbances
4.Outsourcers were lagging behind in technology.
5.Their companies had grown to the point where in-house made more sense
6.Poor management by outsourced partner or decline in performance use to M&A activity

Interestingly, a 2012 Deloitte survey of 111 decision-makers shows 79% of those who backsourced were “happy” with the results. The rest were neutral – adding up to a dissatisfaction rate of zero, which is rare. Also note that back sourcing has strong leadership given the stakes are high in bringing it back.

Reversing the decision to outsource can be professionally uncomfortable for the sourcing initiative’s leaders, and the dismantling of relevant in-house capabilities often makes in-sourcing infeasible in many cases and cost prohibitive as well. Their point drives home the need to think strategically, and long-term, in the face of an elastic list of options. Flexibility for IT is now as critical a factor as cost. Certainly, in the short term, outsourcing may appear more affordable but the key question in our hyper-competitive fast-changing market must be, Does it make business performance better?’ Does it make you a better competitor?

Again, the need for agility for and within business are driving the IT trends whether it involves insourcing, the development of “rogue applications” by the business without governance or building an in-house IT service bureau for the organization.

Lately companies are realizing how the cost factor has moved up from where they started earlier. rapid outsourcing meant the hubs had to deal with high cost of wages besides geo-political situations that hindered its growth. Competitors also meant dropping quality in the outsourcing hubs which in turn reflected in performance for the clients.

Backsourcing starts where failure of outsourcing begins mostly. while some companies have selectively backsourced others have gone for 100%. The situation is not dire but there is a possibility it can come become if the same trend continues with lack of adequate ROI on outsourcing besides of course all the hindrances it poses.

Improving productivity – the vital tips

Improving productivity is one of major challenges that leaders face today. This is more so in a outsourced environment with challenges of remote workforce puts pressure on the clients to get their money’s worth. This is a wonderful compilation to utilize.

Here are the top 11 tips — from CIOs, IT executives, productivity and leadership experts and project managers — for getting the most out of your IT team.

1. Set goals — and be “Agile.” “Be Agile in your goal setting,” says Zubin Irani, cofounder & CEO, cPrime, a project management consulting company. “Have the team set goals for the quarter — and break the work into smaller chunks that they can then self-assign and manage.”

2. Communicate goals, expectations and roles from the get-go. “Provide your team with background information and the strategic vision behind [each] project, activity, task, etc.,” says Hussein Yahfoufi vice president, Technology & Corporate Services, OneRoof Energy, a solar finance provider. “Not only does providing more background and information motivate employees more, [it makes them] feel more engaged.”
“Everyone on the team should know what the target is that they are shooting for and what success looks like at the end of their journey,” adds Tony McClain, executive partner and client advisor, Geneca, a custom software developer.

“They must be crystal clear on the part they play in [the project] and how they will help the team get to the finish line,” McClain says. “It is critically important that every member of the team know and understand what they are a part of and why they exist as it relates to your organization.”
3. Provide tools and and infrastructure that promote collaboration and efficiency. “This is basically the cardinal rule for any IT manager,” says Wes Wright, CIO, Seattle Children’s Hospital. “Even the best team is only as effective as its resources and systems that they use day to day,” he says. “If you want to get the most out of your IT team, invest in the proper tools. Deploy incredibly secure, yet user-intuitive solutions that will cut down on manual hours and improve accuracy in identifying network problems.”
“Implement a structure that gives shared visibility and metrics to development and IT teams, so the health of an application [or project] is easily viewed by both teams once operational, and issues can be resolved more rapidly,” says Andi Gutmans, CEO, Zend, which helps companies develop and deliver mobile and Web apps rapidly.

“Having technology resources that allow communication across branch offices/locations when working on a cross-office project is a must,” adds Aaron Weiss, director of Marketing, HP LaserJet and Enterprise Solutions. “IT managers and CIOs [should be able to easily] share project status reports or information updates … via cloud document management systems that allow teams to easily provide updates to the status document.”

Furthermore, “CIOs can improve the organization’s efficiency by implementing a platform-agnostic solution to let users sync important work files and access them from any device, anywhere, anytime,” notes Ross Piper, vice president of Enterprise Strategy at Dropbox.

4. Streamline workflow — and reduce unnecessary tasks. “Teams want to deliver big things and sometimes we just need to eliminate the barriers,” says Charles Galda, CIO, IT Technology Centers and Services, GE Capital. “We have a program called TAP (Technology Accelerating Productivity) that gives simple tips on how to use technology better, from finding the best time for a global meeting across time zones, to getting travel logistics to Outlook seamlessly,” he says.

“We have another initiative to continually review manager approvals, notifications, etc., so we know when they no longer add value and can be eliminated. Eliminating unnecessary steps keeps employee momentum moving forward, making us faster and more agile in responding to customers,”
Furthermore, ask yourself — and have your department heads ask themselves, “Is every form, report, status update, email, memo and meeting really necessary?” says Steven A. Lowe, Founder/CEO, Innovator LLC, which provides custom software development, IT consulting and IT staffing.

“If a task to be done does not obviously and directly contribute to the goal at hand, see if it can be simplified or omitted,” Lowe says. And “ask the team for suggestions on ways to streamline the processes and what still-necessary tasks could be done by others.”

5. Hold regular team meetings — but beware the excessive meeting trap. “This is an opportunity to share the departmental vision with the team and get everyone on the same page,” notes Mazin Abou-Seido, director of Information Technology at Halogen Software. “We’ve found that by sharing the big picture [at monthly and quarterly meetings] it gives the entire team a better understanding of what we’re trying to accomplish and encourages everyone to work together to achieve common goals.”
Just be careful about falling into the excessive meeting trap. Schedule regular team or department meetings for either once a week or once a month, and make sure that the day and time are reserved on everyone’s calendar.

6. Reduce reporting and don’t micromanage. “You hired smart, talented people because they could get the job done. Now let them do it,” says Jonathan Bruskin, principal consultant and program management lead, Excella Consulting. “Micromanagement and oversight can kill creativity and morale,” he notes. “CIOs, execs and PMs [can] increase their teams’ productivity by communicating goals and clearing administrative obstacles.”
Also, “reduce the amount of reporting they need to do, so that they can focus on getting work done,” advises Christian Buckley, director of Product Evangelism at Metalogix, which provides content infrastructure software. “If more than 10 percent of their day is spent reporting on the work they are doing, something is fundamentally wrong,” he says. “Constantly review and refine reporting to keep your metrics optimized.”

7. Provide real-time feedback — both positive and negative. “Immediately and publicly recognize team members for accomplishments,” says Halley Bock, CEO and president of Fierce, Inc., which provides leadership development and training. “Conversely, address issues or areas that need improvement privately, and immediately. Real-time performance feedback empowers individuals to take ownership of their work, builds trust and lets them know where they stand at all times.”

8. Turn off distractions. “Block out working times department-wide where instant messenger is turned off and meetings are avoided,” says Nathan Gilmore, cofounder, TeamGantt, a provider of Web-based Gantt chart software. “Having hours at a time of uninterrupted work can cause team productivity to soar.”
9. Implement a smart pay-for-performance program. “At Halogen our employees set goals every quarter that tie into larger company objectives,” says Abou-Seido. “As part of our pay-for-performance program, individual employee goals are tied to our Management by Objectives (MBO) program, which offers quarterly bonuses for achieving the set goals,” he says.

“In addition to individual goals, team members also have shared goals, which encourage collaboration and teamwork. Employees work with their managers to set their goals, and, as such, are engaged in the process and highly motivated to achieve them,” says Abou-Seido.

10. Offer development opportunities. “Give employees a chance to step up and take on a new challenge or increased responsibilities,” says Bock. “Not only does the individual benefit from the development opportunity, it shows the entire team that there are learning and advancement opportunities available,” she says. It also illustrates that as a leader, you’re willing to take chances, and that you trust employees will try their best to be successful.”

11. Nourish them. Literally. There’s a reason companies like Google offer employees free food. “Make sure to keep your team well snacked,” says Ginny Hunter, happiness trailblazer at Groopt, a provider of Seb design and communication tools.

“Sometimes we all just need a little snack break, whether it’s a piece of fruit or an espresso, to keep us going through the day,” Hunter says. And “it is much more convenient [and productive] to be able to grab something in the office instead of walking down the street.

SCAM – the new buzz in Indian IT industry growth

Wait its not a bad word after all.

SCAM – a acronym for Social Networking, Cloud, Analytics and Mobile computing is emerging as new sectors fueling growth.

The realms of social networking, cloud, analytics, and mobile computing are converging, and will present growth opportunities for market players in India as well as change the way computing is carried out in 2014. The four market segments will account for 89 percent of growth in global technology spend next year, predicted research firm IDC, which said IT expenditure will climb 5 percent to US$2.1 trillion in 2014.

Collectively dubbed SCAM among India’s ICT community, social networking, cloud, analytics, and mobile computing will be a big focus area for organizations next year. Consumers are accessing personal and work information via mobile devices, and companies are looking for tools function across the SCAM areas, noted The Economic Times.

Gartner’s India research director, Naveen Mishra says that “Companies will rejig portfolios around SCAM…the business opportunity [in this space] is becoming real and bigger due to adoption of smartphones and mobile Internet usage.” The market researcher forecast the SCAM sectors to worth US$104 billion worldwide, accounting for 25 percent of overall business software revenue by 2017.

Both large and smaller enterprises would look to outsource IT services providers to help them extract value from the convergence of mobile, cloud, social media, data analytics.

The anticipated demand will present opportunities for Indian market players which are buying stake with Western firms to create industry-specific big data analytics tools and help its customers better tap data analytics.

Specifically Large companies are in a better position to seize the opportunity. The small companies are too focused on old models [and] can look at partnerships with analytics or cloud firms to tap into the opportunity.”

Can Indian outsourcing hit $300 Billion by 2020?

Indian IT’s ambition to hit $300 billion in revenues by 2020 could be a tad over-ambitious, analysts and industry consultants believe, as for one it entails an average growth rate that is higher than the upper end of the range Nasscom’s forecast.

As global firms undergo rapid changes, with accelerated adoption of emerging technologies and business models, the Indian companies’ preponderance on IT outsourcing means they need to ramp up offerings in the new areas while continuing to keep their bread-and-butter work. Vendor executives, industry analysts and customers indicate a better spending environment in CY14 as reflected in Nasscom’s higher IT services and BPO exports growth estimate of 13-15 %. Most of this growth acceleration is likely to come from application modernization and emerging technologies (also called digital technologies). While 13-15 % growth in FY15 appears realistic, the sustainable growth rate over FY14-20 is likely to be somewhere closer to the lower end of the range. In other words, the industry is unlikely to hit the $300-billion mark in that time frame, unless it accelerates significantly.

IT has potential to reach $221 billion

The core of the business, services , is unlikely to look the same in the next seven years, and a focus on intellectual property, especially in digital technologies, could be the key to success. Indian companies in general are widely believed to invest a lot less in their R&D in comparison with those in the West, even within the services business. KPMG estimated that the industry could potentially reach $221 billion in revenue by 2020, a gap of $79 billion to the Nasscom target.

Not everyone agrees that the target is unachievable, Nasscom has been getting it predictions right for the last many years. So given their track record, the IT industry should be able to achieve $300 billion revenues by 2020. In the near term, buffeted by two years of very slow growth, the Indian IT industry is concentrating on winning re-bid contracts, as global corporations continue to look for cost-cutting options and offshore more work. The Indian companies are also adding business in managing computer systems and storage networks, called infrastructure management in the industry.

They run the risk of not investing enough in digital technologies and high-end consulting, an area where companies such as Accenture are more self-assured. The Indian services industry being still ill-equipped for the digital transformation wave that is about to be unleashed on organizations as they try to fulfill the customer engagement lifecycle. The rise of Big data, social media, and other emerging digital initiatives need a good look to capitalize.

Most Indian centric service providers are still focused on back-end services around F&A and HR and ERP services. There is huge need to make changes to their business model and invest in things like building consulting, there is such an opportunity open, but it is not easy for India pure play firms, some have failed in this endeavor earlier. If they can compete with the Big 3 in US and in Europe crossing 300B by 2020 is not a huge milestone.

The are some headwinds like political instability, threat of taxation, inflation, rising wages, Visa issues, upgrading education system to get more employable variety of IT pros which pose bottlenecks as well to achieve this ambitious growth.

Outsourcing analytics

Outsourcing analytics can offer huge benefits for client — but requires a carefully constructed relationship. The last decade has seen large amounts of data gathering in various forms be it loyalty programs or otherwise and companies are looking to monetize this huge data store via various means. Data is money and in most cases has a shelf life. The companies that have data are looking for various means to run analytics, help disseminate data either for themselves or for their clients. Selling insights instead of just selling data is another big emerging business with top dollars. Companies have invested hiring resources just to run their analytics 24/7 and in order to reduce costs are looking for outsourcing partners. There are lots of good examples of front-runners that have been doing this for a while but the big surge seems to be around the corner.

The surge of interest in big data has led to growing demand for analytics teams. Having big data capabilities can help companies become more efficient and improve overall competitiveness. Companies with superior data analytics capabilities have found ways to build long-term advantages. FedEx Corp., for example, has for years used its team of analytics professionals to create and maintain a competitive advantage through enhanced revenues and lower costs. One of the factors that has helped Wal-Mart Stores Inc. become one of the world’s largest and most successful retailers is the strength of its analytics. The ability to cross sell or up-sell is ably aided by analytics.

Assembling analytics teams, however, is difficult. For one thing, many companies lack the in-house knowledge and experience needed to put together an analytics team. Technologies are still emerging. What’s more, the labor market for analytics professionals has grown increasingly tight. The shortage of analysts — particularly those capable of developing and leading world-class teams that can enable a company to create a competitive advantage from its data and analytics — is driving organizations to consider outsourcing their analytics activities. However, choosing analytics providers and structuring effective working relationships that deliver value require managers to have a clear understanding of what they’re looking for and the potential risks involved.

Analytics is the latest in a string of activities companies are outsourcing to business process organizations (BPOs). As the telecommunications boom that began in the late 1990s led to improving communications with emerging markets, Fortune 500 companies began shifting call centers offshore to locations such as India and the Philippines to take advantage of less expensive labor. India, Philippines and some more Latin American countries are especially attractive because of its large English-speaking population and highly educated labor force. Once call centers were established to handle customer service and telesales, companies began identifying other activities that might be suitable for outsourcing or offshoring: IT services, computer programming, legal research, application processing and accounting.

Analytics was a late arrival to the business-process-outsourcing menu of services; companies that tasted success with other areas of outsourcing have been more successful in moving analytics offshore slowly and steadily.

This isn’t to say outsourcing analytics isn’t done at all today. “A number of well-known Fortune 500 companies outsource and offshore at least some of their analytics. It’s safe to say that outsourcing analytics will grow in the future. The shortage of analytics talent — “particularly those capable of developing and leading world-class teams that can enable a company to create a competitive advantage from its data and analytics” — is putting outsourcing on the agenda. The enormous cost advantage will eventually accelerate

Outsourcing analytics can be a wise strategy, too, as long as managers “have a clear understanding of what they’re looking for and the potential risks involved. For the MIT SMR report, Bell and Fogarty studied four multinational companies that used one or more offshore analytics outsourcers, as well as four analytics outsourcers operating in India. Through their research, they discovered differences in how analytically challenged and analytically sophisticated companies approach outsourcing. Regardless, care and management of the relationship with the selected analytics outsourcer will determine success or failure. “Outsourcing analytics requires a carefully constructed relationship, and the negotiation and evolution of this relationship needs to clarify who does what, who owns what and how each party can use the information it has,” they said.

In conclusion, future looks bright for outsourcing companies to tap into this market. From today’s smaller margins mainly due to early adopters playing carefully and outsourcers trying to grab market and entrench they, this market is poised to change. With heavy investments into Big data there is a market share for everyone that is ready to dive in with his or her credentials. Outsourcing companies investing in people, process and technology stand to gain the biggest in this sphere.

Understanding Indian culture – Quick tips

You perhaps cannot escape being tied to outsourced environment in some form or fashion, and for those that are fully engaged with outsourcing partners dealing with resources with multiple vendors in various countries it makes it pertinent to learn and understand the culture of the country where your resources are.

I will provide some insights and collateral on some of the outsourcing hubs in my next series of blog. lets start with Indian sub continent which happens to be one of the largest outsourcing hubs today.

handshake

To be inter-culturally competent doesn’t mean you are an authority in the values and beliefs of every culture. What it means is that you hold a deep respect for cultural differences and are eager to learn, and willing to accept that there are many ways of viewing the world.

Consider these tips while working in a Multi-Cultural Team:

Be Flexible (“blessed are the flexible for they cannot be bent out of shape!”)
Understand & Respect Different Cultures
Build Working Relationships Based on Different Work Values.
Beware of Generalizations – Cultures are Changing/Globalizing
Equal/Fair Treatment for all Team Members
Convey Your Desire to Be Sensitive to Another’s Culture – Early in the Relationship
Do Not Impose Your Own Values/Expectations on Others
Culture Cannot Be An Excuse for Poor Communication/Misunderstanding

Here are some good guides to learn more on this subject.

Internet: Centre for Intercultural Learning, An excellent site providing a local perspective on most issues.

http://www.intercultures.ca/cil-cai/country_insights-en.asp

An interesting publication produced by the United States Peace Corps that is a mix of personal experiences, cross-cultural training, and a host of ideas to help in establishing and expanding a global mindset. You may download this 256 page book (3.7Mb) for free, or download just the chapters you want.
Culture Shock Guides A well written book series (each on a different region or country).

Culture Matters http://www.peacecorps.gov/wws/publications/culture

Read: The World is Flat Thomas L. Friedman – provides in depth understanding of globalization in the 21st century.

Read a Local Newspaper or Magazine Many of these are available at no cost on the internet.