Best practice makes perfect

Indian IT services giant Satyam is gaining ground on India’s big three tech giants. And the adoption of outsourcing by regional firms, as well as IT best practices, is helping it achieve this

  • E-Mail
By  Caroline Denslow Published  October 30, 2005

|~|Satyam1body.jpg|~|Despite being in its early stages, companies in Dubai are recognising the value of best practices especially in relation to ITIL, claims Satyam’s Ajith Menon.|~|Satyam Computer Services may have been placed fourth in relation to the big three Indian software companies — Tata Consulting, Infosys and Wipro — according to BusinessWeek, but the firm is finally catching up, it says. It is about to achieve US$1 billion in reve- nues this year and is winning more US$1million contracts from companies these days than it did two years ago. This year, it has bagged over 100 projects in the Middle East from companies such as the Dubai Chamber of Commerce, Umniah Telecom and Etihad Airways. IT Weekly meets Ajith Menon, director and head of operations for Satyam Middle East, Africa and Central Asia, to discuss IT best practices — its latest value proposition — and how firms in the region are adopting outsourcing as a business model. Are more companies in the Middle East adopting ITIL (IT Infrastructure Library)? Do they understand the concept behind ITIL or do they look at it more as just a trend? Anything and everything starts off by being buzzwords, companies then start becoming inquisitive, and vendors like us talk about it. If you look at the region and globally, the awareness on ITIL has really caught up. The moment you start talking about quality to IT department, immediately they’ll say, what about ITIL? The awareness is definitely there. The adoption of ITIL is still at the early stages but forward-looking organisations are definitely recognising the value of best practices being brought about by ITIL. Best practices are more about people and processes, rather than technology. So how can solutions providers like Satyam enable companies to successfully adopt concepts such as ITIL? Technology is just an enabler. If we talk about a financial implementation, what are you actually delivering? You are not delivering technology. Even in the purchasing process, what you want to achieve is a better way of making a purchase using the right controls. You want to make sure that any of the steps involved in the purchasing cycle definitely adds value. You are not deploying technology for the sake of having a computer program. You are implementing it because there is a reason for that particular application to be happening. You want to make sure that the element of every step in the purchasing process adds value, otherwise that step should not be there. That is what an enterprise resource planning (ERP), for instance, is going to deliver. It is not a technology. So in any of these things, what they basically require is an understanding of the business. What are the constraints? What is the environment? What is it they are operating on, and what is the right process for them? For us, what we can deliver is our ability to gain this kind of knowledge on projects and help by putting a knowledge management system in place, which we make sure is reusable when we go to another organisation. It shouldn’t be that if one person goes to a certain project he is the only one who knows all the processes there. It should be that other people who become involved in the same project knows the same thing as the other guy. As an organisation we make investments to make sure that what one guy has learned becomes what another guy learns as well. ||**|||~|Satyam2body.jpg|~|Many firms need to see processes is action before agreeing to offshore outsourcing.|~|For technology to work you need resources. Do you find in most cases that companies have enough resources to maintain projects that you have completed? There are two things. Earlier, I spoke about the importance of processes, the other important element for a project to be successful, we believe, is knowledge transfer. Obviously the in-house people are not experts. If they were experts they wouldn’t have come to us. There is a gap between where they are before the beginning of a project and where they will need to be. So we make sure that when we put a team together the user organisation’s team is intrinsically part of the whole project, that knowledge transfer happens, and that we are able to hold their hand during project implementation. So that by the time we complete the project they are capable of supporting their own organisation, that they can provide support post-implementation. A very important part of our overall methodology is knowledge transfer. Knowledge transfer is quite a tricky thing to pull off, especially because some people don’t stay in a company for long. When they leave, they take with them certain skills and knowledge that are vital to the organisation. How do you manage that? It’s a very important point that you have brought up. True, it is a challenge for user organisations, and it doesn’t just happen in this region, but it happens globally. People in user organisations feel that career options are limited within a user organisation. They think that if they move to an IT organisation they will have more options. Their growth path is clearer for them. That becomes a challenge to all user organisations and that is one of the reasons why most of the Fortune 500 companies look at outsourcing as a very critical component of their overall strategy. More and more companies are adopting outsourcing as a key part of their strategy because people want to focus on their core business. If a company is into manufacturing, for instance, it would like to focus on that. Having said that, however, certain organisations have not embraced the outsourcing philosophy, so how do you convince people like that? One is, at Satyam, we are always there to provide support if such situations arise. Number two we try to document a lot of things, so if somebody requires something, they can just pick up the project documentation and refer to that. Very often when a person, who plays a key role in a project, leaves a company the company gets in touch with us and ask us if they can get in touch with our people who were involved in the project. We allow that because we believe that it is a very important part of our customer relationship, to let them have access to people who have been involved in the project and let them understand certain things because not everything can be documented. What about offshore outsourcing, is that also a strategy that companies in the Middle East are adopting? It depends on the kind of projects. Certain kinds of projects lay themselves better for offshoring, such as software development kind of projects. For instance, we are working on a project with a client, which is one of the financial services companies in the region, where probably 80% of that project is done offshore because it is a software development project. If you are talking about an ERP implementation, probably 20% to 30% can be done offshore, not more. So it depends on what kind of project it is. And it is not just about who is willing to do it offshore, it is also dependent on the kind of the project and the right profile for offshoring. What profile is ideal for offshore outsourcing? Any software development or software maintenance kind of project lends itself very well to offshoring, and companies from this region are having these things done offshore. If there is a bit more resistance in this region than in other places — some organisations are not comfortable with offshoring because they have not seen it before — what we do is we take them to our offshore development centres and show them projects that organisations like the World Bank have with us. They then feel that if these companies can do it so can they. There is obviously a big risk on offshoring, especially with regards to confidentiality and those kinds of things, so we show them projects we do with the World Bank and say, ‘If you are concerned about confidentiality, then the World Bank will be more concerned about confidential data than you are, and yet it is a client of ours.’ Seeing is believing. You can discuss things conceptually but companies need to see things happening. Another important thing about offshoring is that organisations need to be mature before they decide to do things offshore. It’s not a one-way story. Organisations need to have their internal processes put together before they can actually look at offshoring. They are all used to seeing people sitting across the table and working. But what kind of visibility do they have about things happening at the backend? What kind of reviews happens there? There is an element of maturity required from the client in order for them to leverage on the benefits of offshoring. How do you evaluate the level of maturity of companies in this region? There are fewer companies here ready for offshoring. Not all organisations are mature, but then, there are also very, very mature organisations here that are ready and trying to develop themselves through offshoring. What gives people comfort is offshoring is no longer a question of whether it is right or is it necessary because they have seen that Fortune 1000 companies have some sort of offshoring strategy. The best 1000 companies in the world believe that that is the right way to do it. Obviously there is merit to it and it is working well. But doesn’t offshoring conflict with the region’s localisation goals? It is a matter of how you view the whole thing. What are we gaining from offshoring? If we state the premise that by offshoring they are actually saving money, let us assume that as a premise, then by saving money, organisations are creating wealth. That wealth can be redeployed and can generate employment. It’s not necessary that if you have a programmer vacancy that needs to be filled locally, and that by doing so would be generating employment. By saving that money probably they can create job deployments for ten people. It’s all about wealth creation and deployment of wealth that you create jobs. Not everything can be done offshore, but if you talk about any kind of services yes you can look at business process outsourcing or offshoring it. In fact, one of the reports say that by 2025 there will not be a single technical job left in the US. A lot of people who have gone to the US to find a good job a lot of them are willing to come back. There are now foreigners coming and working in India now. What can you say about Dubai’s initiative to become an outsourcing hub? We have seen the likes of the Dubai Outsourcing Zone being developed. Dubai has been very clear on what it wants to do. It is not, by any stretch of the imagination, for instance trying to compete with India. India’s strengths are different. Dubai’s strengths are different. I don’t think there is a conflict there. How many people does the UAE have? We’re talking about three million people. The entire three million is small compared to the whole of India’s IT population. But Dubai definitely has a mixed segment that it can address. For instance, if you want to serve the French-speaking market for a call centre for example, it will be more difficult to implement it in India than in Dubai because getting a French-speaking guy is a lot more difficult than getting a French-speaking guy in Dubai, since it has a lot of Lebanese people who speak French. These are the niche segments that Dubai can definitely leverage. I don’t think that Dubai, when it talks about outsourcing, it wants to be larger than India. It can never be, not because it doesn’t have the ability to do that, but because the population size does not allow it to. Dubai’s value proposition is different from India’s proposition, the scale is different. ||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code