global software development – industry...
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1 Copyright © 2011 Tata Consultancy Services Limited
Global Software Development – Industry Perspectives Kathiravan Palaniappan Country Manager - Denmark 10 Sep 2012
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Market Trends - IT Services Outsourcing
§ The worldwide market for IT Services is growing – Technology intensity is going up
across verticals – Emergence of new technologies
§ The proportion of outsourced IT Services is growing – Shorter shelf-life of technology – Greater need for variablizing costs
§ Global sourcing has become a mainstream option
0 100 200 300 400 500 600 700 800 900 1000
2007 2011 2015
IT Spend in USD Bln
58
60
62
64
66
68
70
72
1 2
Global sourcing IT Spend in USD Bln
2011 2012
5 yr CAGR 4.7%
5 yr CAGR 2.8%
Source: Gartner, Nasscom
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Evolution of Global Software Development (GSD)
Strategic Inputs
Solution Design
Solution Delivery
Increasing requirement and impact of industry domain knowledge
Scal
ing
of V
endo
r Cap
abili
ties
Scaling of Customer Demands
Application maintenance Facilities management Contact centers Help desks Skills
Application development Product customization Infrastructure deployment Integration and testing
Tools
Functional speci!cations Software speci!cations IS architecture Component design
Process
Programs Projects Modules Skills
Support
Process reengineering Product assessment Business case de!nition Change management
Knowledge
Relationship Maturity
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Global Software Development Sourcing
Single Country
In sourcing Selective sourcing
Strategic sourcing Value Based
Multi-Country
In-house/ Captive
Single Function
Broad Scope
Value Sharing
Offshore Near Shore Vendor Location
Vendors
Client Geography
Sourcing Spectrum
Single Supplier
On Shore
Multiple Suppliers
Strategic Partners Prime Sub
Multi-site
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The global software development full of uncertainties…
Selecting the right model is the key to success
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Global Software Development (GSD) Considerations
§ Outsourcing Model § Delivery location & Setup § Team Experience § Commercial Models § Culture/Language considerations § Technology considerations § Collaboration tools § Governance & Project Management procedures § Risk and Security
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Outsourcing Operating Models
Staff Augmentation
Managed Outsourcing
Out Tasking
Full Outsourcing
Outsourcing Maturity
Cust
omer
In
volv
emen
t High
Low
High Low
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Delivery Organization Setup
LOCATION OF CENTERS
GOVERNANCE MODEL
TRANSITION MODEL
STAFFING MODEL
PRICING MODEL
SOURCING MODEL
IN-FLIGHT PROJECTS
Continue to Logical
Completion
Transfer Project/Contract
LOCAL SUPPORT
Local Country Support
Consolidate by Language/Region
Staff Augmentation
TCS facilities
Cust. facilities
New Locations
Shared Services
Geo Aligned
Big Bang
Phased by Geo
Phased by Function / Tech
T & M
Fixed Capacity
Fixed Price
Single Vendor
In-house
Prime - Sub
TCS
Lateral Hiring
Rehire Staff
Rehire Contractors
Global Delivery
Organization
OFFSHORE LEVERAGE
60:40 80:20 90:10
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Evolving Commercial Models
T&M
Fixed Price
IT Outcome
Based
Business Outcome
Based
Gen 1
Gen 3
Next Gen
Gen 2
Typical Current
State
Typical Proposed Model
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Multi-sourcing and co-sourcing Setup – challenge or Advantage?
Global Program Delivery
Vendor B Vendor A
Captive Centers In-House IT
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TCS experience
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Tata Consultancy Services (TCS) Pioneer and Leader in IT Services and Offshoring services
§ 22+ years Operations in all Nordic countries, represented through 5 offices, Partner to over 75 Nordic clients with 4.500 consultants
§ Ranked #1 in Customer Satisfaction for the Nordic Region in 2010, 2011 & 2012
Global TCS Presence TCS in Nordic Region
§ FY 2012 (March) revenue US$ 10,17 billion
§ 97% of annual revenues from repeated customer business
§ Global Presence with 183 offices in 43 countries and 242.000 employees
§ Largest - Software R&D center in India
§ Ranked as a leader in Application Outsourcing by leading Analysts
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Cultural Sensitization Development A Cultural Diversity Sensitization Program will go a Long Way to help Bridge the Cultural Divide
American
Sensitization Requires Developing an Understanding of Each Cultures…
Indian(1)
… Which Will help to shift Perceptions, Communication, Work Styles
• Context, e.g., Environment • Behavior/Attitudes • Communication Style • Work Orientation
Developing an appreciation for the “differences” and de"ning work style guidelines improves the effectiveness of personal communication and work#ow efficiency.
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Global Software Development – Multi-site Delivery
Change Request
High-level
Specs
Impact Analysis Test Plan
Design, Develop, Bug Fix
Unit & System
Test UAT Roll-out
Customer Onsite China India
Customer Onsite Team
Lead @China
China
Team
India Team
Lead @India
Lead @Mexico
Mexico Team
Mexico
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Service Delivery Trends – Our take on the Future
Service Orientation Service Consolidation
Service Evolution Departure State
• Platform based solutions • Includes BPO / IT / IS • Technology becomes irrelevant
• SaaS based solutions • Includes IT / iS
Vertical Evolution (E2E Solutions)
Horizontal Evolution (Commoditized Utility Services)
• Application Support as-a-Service • App Development as-a-Service
• Assurance as-a-Service
• Analytics as-a-Service
• PMO as-a-Service
Siloed Specialization (Niche Services)
• BPR/BPI Services • Predictive Analysis
• EA Services
• Performance Tuning
• R&D Services
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Additional Slides