Global In-House Centres (Captive)– Value strategies

During my initial time of setting up the Captive company in India, there were a lot of negative information shared with the decision makers. This made my work very tough as the inputs provided to them were speaking against the opening of the captive companies in India and keep the strategy of third party intact. A damaging report written by Sudin Apte of Forrester which clearly mentioned that captives would be a thing of past very soon as none of them are doing great. The issue was not the report, but the way the third party vendors presented this report to various stake holders. This report did mention the issues in front of most of the captives which was to a great extent true. Any company taking care of these issues had no reasons to feel otherwise.

Finally, when I started the captive company, I ensured that care was taken to address all these issues right from the start. I would detail out each of the the issues in subsequent blogs while would like to give the summary of each of them as per my knowledge.

a. Keeping the cost within control. Cost saving is not to be left for hard times, it is everyday and everyone’s job. It is to be noted that the primary reason for any captive to be opened in India is the cost advantage and it cannot be ignored.

b. Management buying in : Captive companies are located far away from parent companies and if special care is not taken to keep the relationship warm, even excellent values shown can become invisible to the headquarters.

c. Making a flexible organisation: Once the euphoria of cost dies down, delivery is what matters. Assuming that every captive delivers what is expected, it is very common scenario that peak and sudden requirements from parent organisation is not manageable by captives. This keeps them closer to third party vendors for ever and slowly dilutes the captive advantage.

d. Integration with the parent organisation: The next level of relationship is the complete integration. Standalone captives at times pose a threat to the same set of managers onsite who created them. Integration in true sense helps dispel this communication gap and ensures better output.

e. Focus on Value generation instead of cost reduction alone: Most of the captives cannot generate cost advantage for ever. This cost benefit has to transform to value generation which enhances the value of the captive instead of stagnating them.

f. Becoming the next step for entering into India market. This is a new phenomenon where captives become the starting point of entering into India for business. A large democracy like India is very lucrative for businesses to launch in this time.

Alok Kumar

Alok Kumar is Managing Partner of SRKay Consulting group, a private equity company, nurturing innovative ventures. Alok also serves on the board of ICCL (Indian Clearing Corporation Limited - A subsidiary of BSE- Bombay Stock Exchange) as an external advisor for technology and information security. Prior to this, Alok had been Managing Director of Sears IT & Management Services India Private Limited (SHI) since its inception in December 2009 and served in the same position till very recently. Having been in senior IT management positions in Fortune 500 companies, Alok has won several national and international awards. Alok is instrumental in planning and setting up SHI and thereafter growing it to a multi-locational thousand-plus people organization. Over the last five years, with his strategic vision, Alok helped SHI grow roots in India, develop and support technology applications and infrastructure across core mainframe, cutting edge e-Commerce and big data technologies. With his unique people-oriented transformational leadership style, Alok turned SHI into one of the most valued investments of Sears, garnering great ROIs, and creating value much beyond cost arbitrage. Under his tutelage, SHI has filed two patents and is recognized widely for its best practices in various areas, the latter, currently featured in Indian Institute of Management (IIM) case studies. SHI also became a CMMI Level 3, PCMM Level 3, and ISO 20000 certified organization. Alok is a widely acclaimed corporate leader in India today. He regularly participates and leads various forums as a keynote speaker and is an author of several books in different genres. Alok has several awards to his credit. He is particularly known in the industry for his people management skills and innovative ideas in improving the productivity of employees through unique people practices. He has been credited with the following industry awards: ¬ Emerging Leader of the Year award 2013 by IndiasGreatest.com ¬ Game Changer CEO of the Year 2013 (SHRM) ¬ CIO 100 - The Bold CIOs - 2008 (Reliance Infosolutions) ¬ CIO - Ones to Watch Award 2008 (Reliance Industries) ¬ Extended Manager Award - CIOL 2004 (Tata Teleservices) As an able leader of SHI, Alok got SHI recognized widely in the industry with the following several awards: ¬ CII Award for HR Best Practices in 2014 ¬ Global Excellence in Outsourcing Award - AIOP (Phoenix 2013) ¬ IT Innovation Award (Design & Engineering) - Computer Society of India 2012 ¬ Golden Company of the Year - Economic Times 2011-12 ¬ 7th Employer Branding Awards - World HRD Congress (Mumbai, India) 2013: • ‘Asia’s Best Employer’ Award • ‘Best HR Strategy’ in line with business • HR Leadership Award • Talent Management Award by Bloomberg TV India ¬ Employer Branding Awards - World HRD Congress (Singapore, Asia) 2013: • 7th rank in ‘Asia’s Best Employer’ award • Award for ‘Best HR Strategy’ in line with the business • HR Leadership Award Other recognitions: Alok had served on the distinguished panel of NASSCOM's GIC (Global In-house Centers) National Council members. The council members play a key role in major initiatives of the industry and include the torch bearers of IT industry as panel members. Books and Papers: Alok is an established author, with three books to his credit. Alok’s third and latest book, a novel, “The Spy from Unaula” is a 2015 publication. A handwriting analysis enthusiast, Alok collaborated with his wife Nandani on the book, “Handwriting Speaks” in 2006. “Value Sourcing – Future of IT Outsourcing” was co-authored with Keith Sherwell (currently CIO, Altice USA) and was released in 2013. Alok also researched and published two whitepapers: a. “Creating next generation captives” talks about the best practices that are helping generate higher value from the IT company captives.

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