Never Leave your IT development outsourcing unwatched

Outsourcing is a standard and a norm for almost all the companies globally. Those services which have clear control metrics like BPO and KPO operations are easy to manage because of the nature of transparency in the process itself.

This advantage of transparency does not exist in areas like IT development. Although there are proven standards on IT development lifecycle, the most famous of them being CMMI, most of the big IT service providers find enough loopholes to keep their future business opportunities intact by creating complexities in the developed systems, leaving little option for the customer, but to retain them for future maintenance of those systems.

 The magnitude of these small complexities can be mind boggling when it comes to impact on the company’s bottom line and future expansion.

In one of the companies I came across this issue, it was observed that the system design and development work was left completely to the service provider. Customer was only focused on getting end results, which they got without issues. In essence, there was no reason for customer to be dissatisfied.

There were several such systems developed by the vendor and delivered to the end user. It only started surfacing later that any change required in the system required more than normal time and vendor got money for the elongated time. Documentations were deliberately kept to minimum and changes were rarely updated. It was observed that system were designed so rigid, but within the defined scope that even smallest change required code to be changed at several places. This could have been done through simple configuration in a good developed environment.

To add to the cost to the customer, systems promptly required technical assistance which needed vendor to put full time staff to support. Non standard components used required even further expert intervention and higher billing. Integration to other system became equally complex and prone to errors. Over years, a small job became a difficult big job and changes complex and expensive.

Although, it was difficult to assess, it was clear that the vendor has created complex systems to suit their future business continuity with the customer.  

Later when this customer opted to start their own Captive IT unit in India, the team found complexities and lack of standardization which not only resulted in excess efforts and money by service providers but also became a major bottleneck in quick business changes. This indirect loss amounted to several millions in lost opportunities.

If not for the Captive unit team, customer would have never realized the issues due to lack of standardization, messaging platform and complex coding techniques and would have continued to grow their business with these constraints.

It is therefore very important to have excellent internal team to design, create standards and check the quality of codes given by the vendor every time any system is outsourced. Lack of control and setting standards would have far reaching costly impacts on the business.

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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