Advice for setting up an offshore or nearshore location

1. Selena Sol presents….. ADVICE FOR MANAGING OFFSHORE CENTERS for business managers looking for ideas and lessons learned selena@selenasol.com http://www.linkedin.com/pub/eric-tachibana/0/33/b53 http://www.slideshare.net/selenasol

2. This deck offers advice on best practices for setting up and managing an offshore/nearshore service center that provides technology, infrastructure, or operations support to a regional or global client base.

3. table of contents 1………………strategy: vision, value & differentiation 2……………………………….budget and book of works 3……………………………..…..organizational structure 4…………………………...……….financial management 5…………………………..………….delivery frameworks 6………………………………....population management 7………………....recruiting supply chain management 8…………………………….…………coaching & training 9…………………….……………..……leveraging culture

4. strategy: vision, value, & differentiation strategy| org structure | budgets & book of work | finance | delivery | pop mgmt | recruiting | coaching | culture DESIGN GOALS how to do it right A charter must guide ALL center activity. The charter is NOT a nice-to-have! • Defines clear, measurable, goals and vision & is the basis for continuous improvement • Provides a location-sensitive strategic roadmap for partnership and collaboration with other Development Centers • Is clear & suitable for use as an internal branding document RISKS what if you get it wrong Strategy must come FIRST or else…. • Center will not know what it is building • Growth will be tactical, sporadic, & guided solely by external pressures. • It will be hard to roll back misaligned growth & organizational structures • Cost & control inefficiencies • De-motivated & confused staff and partners CASE STUDY How we did it in XYZ • Charter • Defines vision, identity, values, & differentiation • Provides specific, near-term implementation goals • Goal post against which we constantly measure • Living document • Aggressively & repetitively marketed internally & externally ADVICE What we’ve learned • Partners drive the “what & why”. Local management drives “how” • Build momentum through leveraging quick, high-impact wins (e.g. org structure first, financials second, culture third) • Communicate internally & externally. Then communicate again through multiple channels. Then remind, from induction to exit • Incentivize strategically-aligned behavior from center staff and clients • Listen to team but don’t build the charter bottom-up. Be humble, but courageous in the face of resistance

5. organizational structure strategy | org structure | budgets & book of work | finance | delivery | pop mgmt | recruiting | coaching | culture DESIGN GOALS how to do it right Empower strong, local management. Staff augmentation is dangerous • Do not hire heavyweight process experts. Hire agile domain experts. Product is key to success • Local mgmt must maintain clear ownership & accountability of all product-line functions • Local mgmt must be accountable for product excellence AND center guidelines. • Without strong recruiting, PMO & strategic functions, center will not be sustainable • Earn “confidence & trust” from clients and respect global matrix-oriented culture RISKS what if you get it wrong Implement strong local management and reduce staff augmentation or else…. • Remote managers will micromanage • Management will not scale • We’ll lose our talent • We will fail to implement centre-wide best practices & ops will lack clarity, transparency & control • We’ll fail to provide a service & become a spillover location with a bunch of low-skill coding monkeys CASE STUDY How we did it in XYZ • Local team leads for all teams with accountability to both the center & global client requirements • Very strong mid-management layer to drive strategy down to staff level • Flat organizational structure ADVICE What we’ve learned • Do not bypass local team leads • Local team leads should be honest, accountable, & address risks and issues promptly and publicly. • Team leads should represent multiple clients to incentivize horizontal scale efficiencies • Travel restrictions must not hamstring knowledge transfer

6. budgets & book of work strategy | org structure | budgets & book of work |finance | delivery | pop mgmt | recruiting | coaching | culture DESIGN GOALS how to do it right Allocate budgets and book of works at a global, not regional, level • Ensure that center has a voice at the table in global budget & book of works discussions, especially at early stages • Book of work requires a single point of ownership for allocation of work • Make budgets and book of works a month-to-month, not year-to-year activity RISKS what if you get it wrong Budgets & book of works must be driven & allocated globally, NOT regionally or else… • Defensive ownership in the center as various regions compete to ring fence resources and deliverables • Center will become politicized by need to align with region that funds teams, initiatives, and work • Fragmented org structure – pressure from regional sponsors for private teams with dedicated leads • Difficult to implement shared service delivery teams, or center initiatives, as no single region will fund • Fragmented, redundant & short term deliveries CASE STUDY How we did it in XYZ • Still a work in progress. Some teams have global sponsors. Others are regionally funded & directed. • Currently working with our global partners to set up a more strategic funding and work prioritization approach. ADVICE What we’ve learned • Do not take funding and work whenever it is available. Choose carefully and remember that we are a resource for global projects

7. financial management strategy | org structure | budgets & book of work | finance | delivery | pop mgmt | recruiting | coaching | culture DESIGN GOALS how to do it right Once allocated globally, locally own & manage budgets & financials. Don’t rely on others for accounts • Empower managers with meaningful managerial accounting & budgets • Provide meaningful metrics that support strategic goals • Put in place month-by-month financial review and auditing process RISKS what if you get it wrong Financial controls must be locally rigorous or else…. • Loss of budgetary control & poor management • The center will be unable to do any strategic planning • Loss of ownership and accountability at the individual level CASE STUDY How we did it in XYZ Local Financial Controls • Financial trends are owned by managers and reviewed center-wide monthly. • Managers provided with financial advice & training • Audit points built into process to ensure that trends are identified and actioned ADVICE What we’ve learned • Local managers must accept responsibility for financial management & must be appraised on financial control • Provide financial training • Form strong partnerships with finance to generate raw data on which trending is based

8. delivery framework strategy | org structure | budgets & book of work | finance | delivery | pop mgmt | recruiting | coaching | culture DESIGN GOALS how to do it right • Delivery framework must be realistic and measurable • Delivery framework must not conflict directly with the delivery frameworks or expectations of clients • Hire good people then trust and empower them to do a good job • Delivery framework must drive continual quality improvement, corporate IT governance, and PM best practices • Delivery framework must recognize the diversity of project types, timelines & clients RISKS what if you get it wrong Delivery, quality, & governance must be managed by a clear & globally consistent & flexible framework or else… • Cannot improve against trends or communicate or report on successes outwards • Cannot benchmark centers against one another • Application of rigid structure across the diversity of contexts will hamstring locations CASE STUDY How we did it in XYZ • We have implemented ‘program X’ for quality mgmt & IT governance • Program X is highly flexible to support front-office realities but is firmly based in six sigma, COBIT, CMM, & ITIL global best practices • Program X supports unified & comparable metrics-based mgmt • Regular surveys conducted to measure satisfaction ADVICE What we’ve learned • Framework must not be heavy or process-laden • Framework must be living. We continually improve Program X. • Frequent and meaningful audits must be performed and results must be published publicly to share best practices and to remind staff what is expected of them • Technology infrastructure supporting delivery is worth the investment

9. population management strategy | org structure | budgets & book of work | finance | delivery | pop mgmt | recruiting | coaching | culture DESIGN GOALS how to do it right We must know who we are, what we are good at, and where we are going • Current core capabilities of center and staff should be known absolutely • Future states should be forecasted based on strong assumptions based on actuals • Growth from now to future should be well planned and communicated RISKS what if you get it wrong Manage population or else… • Centers grow rapidly. Implement the discipline of population management early, or you will lose control • You will not know where you are strong or weak & will not be able to enhance strengths or address weaknesses • Space capacity bottlenecks will be expensive and will constrict technology supply & customer support CASE STUDY How we did it in XYZ • The Service Center Capacity Planner ensures that we understand out current state and that our forecasts leverage actual historical trends. • Our People Inventory & Capability Audit tracks key personal information, capabilities, and lifecycle changes • The Seating Plan provides current, near-term and long-term projection of team placement ADVICE What we’ve learned • Implement regular, mandatory audits and provide feedback publicly in the form of plotted trend • Ensure quality data and force managers to act on, and plan against, information

10. recruiting supply chain management strategy | org structure | budgets & book of work | finance | delivery | pop mgmt | recruiting | coaching | culture DESIGN GOALS how to do it right Get the people wrong and everything else fails Rigorous, documented, metrics-driven process must drive recruitment from start to finish • Internal (employee referral program) recruitment is key • The market for talent is extremely competitive & firm must develop, invest in, and support its brand RISKS what if you get it wrong Implement an efficient, effective supply chain management process or else…. • Your credibility in the market (agencies and candidates) will be destroyed • You will burn out your internal review panel and interview resources CASE STUDY How we did it in XYZ • Structured, rigorous, metrics-driven recruitment process • Dedicated team to manage candidate flow & to implement screening process • Process supported by suite of key docs including: Pre RaR, RaR, & Pipeline report • Agencies & internal groups driven by metrics & vendors reviewed regularly ADVICE What we’ve learned • Build a dedicated recruitment team for candidate flow and candidate screening • Demand good job descriptions. Know your requirements before you go to market

11. coaching & training strategy | org structure | budgets & book of work | finance | delivery | pop mgmt | recruiting | coaching | culture DESIGN GOALS how to do it right Hire people for what they are worth but train them to be worth much more than we pay • Accept that team will require a great deal of training in the business • Technologists are motivated by learning and training is a key component of total compensation • Feedback loops must be designed in for control improvment • Job roles and performance measurements must be clear to all RISKS what if you get it wrong Build your people or else…. • Quickly lose credibility with your clients • Lose your staff, the best ones first • Fail to achieve IT governance objectives CASE STUDY How we did it in XYZ • The XYZ Service Center has several training and coaching programs • Brown Bag Program • ‘Black Bag’ Guerilla program • Formal domain training • Leadership & Business planning for Team leads • Mandatory compliance programs • Meatspace library • Regular staff satisfaction surveys ADVICE What we’ve learned • Get everyone trained, but make training a reward not an entitlement • Design training with delivery strings attached • Delegate responsibility for training as far down as you can go. But carefully shepherd the process top down • Measure effectiveness of training against metrics

12. leveraging culture strategy | org structure | budgets & book of work | finance | delivery | pop mgmt | recruiting | coaching | culture DESIGN GOALS how to do it right Create a culture that locks in your stars and helps individuals and teams achieve full potential • Praise and market individual and team successes • Culture is day-to-day not month-to-month • Definition of culture is an inclusive process. Do not define culture top down. RISKS what if you get it wrong Get culture right or else…. • People will leave, stars first CASE STUDY How we did it in XYZ • Events Committee Established • Center Open House • Hackathons • Corporate Social Responsibility program and volunteerism • Special interest groups and games • “Meet the managers” series • X-Box challenge ADVICE What we’ve learned • Events or other culture-oriented committees must align to center strategy. Events cannot become trivialized.