john yang, yidatec - taking advantage of china's multilingual capability

Taking Advantage of China’s Multi-lingual Capability: lingual Capability:

A Case Study

John YangMay 2010

For a flatter world

Topics

1 Background and Overview

2 Initial Technical Support Structure in Asia Pacific

4 Why Did We Choose Dalian and YIDATEC

The Reason of Our Decision of Moving Technical Support to China3

4

5 Captive VS. Outsourcing

6 Achievement After 1 Year of Operation

7 Lesson Learn Through The Process

For a flatter world


Company Overview

• Strength

F d d i 1980– Founded in 1980– 10th largest independent software company– 16,000 customers in 124 countries

Fi l 2009 f $1 87B– Fiscal 2009 revenues of $1.87B– Solid balance sheet

• Innovation, vision, and execution

– Pioneered concept of BSM– 94 software technology patents – Continued growth through internal innovation and

i itiacquisitions– Support for cloud computing, virtual, distributed, and

mainframe environmentsProven experience

For a flatter world

– Proven experience

Global Support Structure

Contact Centers

Level 2 Support CentersLevel 2 Support Centers

Dublin, Ireland

ppCo-located with R&D

Dalian, China

Lexington

DublinEgham

AmsterdamParis

B ijiDalianTel Hai

Houston

AustinPleasanton/Sunnyvale McLean / Herndon

Lexington Spain

Singapore

PuneShanghai

Beijing TokyoSeoul

Houston, TX, USA

g p

Sao PauloBuenos Aires

For a flatter world

MelbourneBuenos Aires

Topics



4 Why Did We Choose Dalian


4 Why Did We Choose Dalian




For a flatter world


The Initial Technical Support Structure in Asia Pacific

The support structure before support business outsourced:

Customers/Partners

Concerns:

Customers/Partners

Japan Korea Great China South Asia Australia & NZWeb / Email / Phone

Concerns:

›CCRs in APCC Provide Pure Language Translation Services Japanese/English

CCRs

AP Customer Contact Center(Melbourne)Korean/English

CCRs Mandarin/English

CCRs

English is common service language

Response

in English

›Little or No Technical Added-Value are Provided by CCRs

›Lack of Engineers with Solid Technical Background and Fluent J /K i A t li

Customer Support(Level 2)

English is common service language If Customer/Partner

Accepts EnglishTranslate / Dispatch

Japanese/Korean in AustraliaSingapore

TSAsChinaTSAs

AustraliaTSAs

KoreaTSAs

JapanTSAs

US/EMEATSAs

Escalate

For a flatter world

R&D(Level 3)

Reason’s to Off-shoring / Outsourcingg g

Source: Deloitte Consulting

Additional Considerations:1. Growing Market in Asia Pacific Region2. Long-term Cost sustainability

For a flatter world

2. Long term Cost sustainability

Topics



The Reason of Our Decision of Moving Technical







For a flatter world


Global Service Location Index – 2009

China becomes one of the best outsourcing destination of global service, especially in Asia Pacific region.

For a flatter world

Global Delivery Service Index

For a flatter world

HR Skills & Availability Score

For a flatter world

Availability of resources is the key to long-term cost sustainability

Cost Saving VS. HR Skill & Availability

For a flatter world

IDC Global Delivery Indexy

Source: IDC GDI-AP v2.0, May 2008

For a flatter world

Topics









For a flatter world


China Outsourcing Location OverviewCentral Location:

BeijingShanghaiSShenzhengHong Kong

Satellite Cities:TianjinSuzhouHangzhou

Dalian

Beijing

TianjinXi anCost Saving Location:▲Chengdu▲Wuhan▲Xi an Chengdu

ShanghaiWuhan

Suzhou

Xi an

Hangzhou

Multilingual Location:Dalian

Chengdu Wuhan

Hong Kong

Shenzhen

For a flatter world

Hong-Kong

Dalian Overview

Sendai Toyama

The most recognized location in the world that has a high availability not y

Tokyo Osaka Nagoya Hiroshima

world that has a high availability not only in language capable talents, but also in technology & language combined capable talents to service the

Dalian

• Low operation cost as a second-tier city

Gl b l 500 f H H bit ti

Fukuoka combined capable talents to service the APAC region.

• Global 500 for Human Habitation

• Mature IT industry

• Rich pool of Japanese/Korean & English capable resources

• International city with strong government support

• Established cooperation between local Universities and IT companies

• Great transportation access to the city (from Japan & Korea)

For a flatter world

p y ( p )

World Class Infrastructure“Global 500” for Human HabitationGlobal 500 for Human Habitation

Most Challenging Golf Course

For a flatter world

Dalian’s Outsourcing Industry Structure

1980’sGeneral software

1990’sStarting

Later 1990’sDramatic

Since 2000I t ti li d

For a flatter world

General software development

Starting outsourcing

Dramatic growth

Internationalized

Average monthly salary per “IT” related position

HR expenses in Daliang y y p p

Position RMB AUD (rate: 6.3)

University graduates 2,000 – 3,000 317– 476Software engineer (0.5-3 years exp.) 3,500 – 4,500 556– 714

Position RMB AUD (rate: 6 3)

Average monthly salary per “BPO” & Management related position

System engineer (3-5 years exp.) 6,000 – 9,000 952– 1,428Project manager (5-10 years exp.) 10,000 – 16,000 1,585 – 2,536


Call center operator (only Chinese, 1-2 yrs exp.) 2,500 – 3,200 397– 507Call center operator (English, 1-2 yrs exp.) 5,500 – 7,000 873– 1,111Call center oper. (Japanese or Korean, 1-2 yrs exp.) 4,000 – 5,500 634– 873p ( p , y p ) , ,Senior operator (English, 3+ yrs exp.) 6,500 – 8,500 1,032 – 1,349Senior operator (Japanese or Korean, 3+ yrs exp.) 6,500 – 8,500 1,032– 1,349Process Leader 7,000 – 10,000 1,111 – 1,585Operation Manager (fluent Japanese or Korean) 15,000 – 25,000 2,380 – 3,968Operation Manager (fluent English) 15,000 – 20,000 2,380 –3,175

Native speaker & employees

For a flatter world


Native English 7,500 – 10,000 1,090 – 1,585 Native Japanese/South Korean 6,500 – 15,000 1,032 – 2,380

The Reasons Why Choose Dalian

Why Dalian– Low Cost Location for APAC Technical Support

Center– Mature IT Environment with World-Class

Infrastructure – Rich Technical and Language Talent Pool– Established Cooperation between Local Established Cooperation between Local

Universities and IT Companies Which Can Satisfy Our Long-Term Talent Demand

– Local IT Vendors Have Extensive Experience pWorking with MNCs

– Local Vendor Can Provide Improved Services to Consolidate Our North Asian Customers and

For a flatter world

Partners– Position for Growth

Topics





4




For a flatter world


Captive VS. OutsourcinggThe comparison of main strategic and operational factors that usually facilitate organization’s decision in favor of third-party outsourcing or captive model.

Disadvantages• Longer build up period if building from scratch

Captive Center

Advantages:• Gain operational flexibility (quickly free up internal

3rd Party Outsourcing

• Higher risk due to initial investment• Administrative management can pose problems in a

unfamiliar location and environment• It takes time to gain access to the qualified local

resources (brand name recruitment channel

and ramp-up or ramp-down external resources)• No long-term commitment or large initial

investment• Access to specific technology or domain expertise

and best practices that are not available in-houseresources (brand name, recruitment channel, relations with Universities & College)

• Long decision cycles (most of time at global level)

Advantages:

and best practices that are not available in-house• Can focus on the core business

Disadvantages:• Less control and operational transparency

VS• Experience the saving first-handed• Retain key resources & knowledge• Control of all processes and operations• Gain local experience and develop local market• Easily integrated into internal orgnization

• Most of time don’t have control over project resource

• Cost saving can be minimal when using large service providers

• No driver for innovation and cost reduction

For a flatter world © Copyright 5/17/2010 Software, Inc.22

Easily integrated into internal orgnization No driver for innovation and cost reduction• Information security can be a issue when resource

and location are shared between projects

The Third Choice

After careful evaluation, decide to go with the Hybrid Staff augmentation / Outsourcing (BOT: Build Operate Transfer) engagement model with YIDATEC With the BOT model (BOT: Build-Operate-Transfer) engagement model with YIDATEC. With the BOT model was able to enjoy following key advantages:•Time, because the service provider is presumably more expert at assembling the infrastructure and obtaining local regulatory consents;g g y•Money, because the benefits of the new infrastructure can be enjoyed sooner, and there is no initial investment;•Effort, because the service provider is performing the effort (Setup, Recruitment, and all other administrative tasks)all other administrative tasks)•Flexibility, although has no intension to transfer the operation any time soon, the model does provide the flexibility to choose when needed•Minimal Risk, with the flexibility of the engagement model, can pull out with minimum

f ’loss if thing don’t work out•Partnership, through the project, not only built a service center, but also built long-lasting partnership with a strong local partner to help explore the local relations

For a flatter world

Why YIDATECy

Following are some of the key reasons for to choose Following are some of the key reasons for to choose a local vendor like YIDATEC:•YIDATEC is flexible and willing to provide BOT servicesg p•With over 1500 staffs, YIDATEC is large enough to “trust” and small enough to “care”•With stable financial backing and strong local governmental relation, YIDATEC can help to be better positioned in China. (The parent company of YIDATEC is one of the help to be better positioned in China. (The parent company of YIDATEC is one of the largest real estate company in China)•YIDATEC has strong experience serving Japan, and Korean customers, and has presents in Japan, and various locations in Chinapresents in Japan, and various locations in China•Mature QA and Training systems•Experience in technical supports rather than general ITO and BPO

For a flatter world

Topics





4




For a flatter world


Dalian Support Center• Initial Interest Started Sept 2007

– Approached Dalian High Tech Industrial Zone Foreign Investment Promotion BureauInvestment Promotion Bureau

– Spoke to Other Software Vendors/Suppliers

• RFP and Evaluation Started April 20087 Suppliers were Invited to Respond – 7 Suppliers were Invited to Respond

– 2 vendors Short- Listed– Contract awarded to YiDATEC on Oct 1, 2008

Office Fit Out and Staff Recruitment • Office Fit Out and Staff Recruitment – Successfully Completed in Very Short Time of 1.5 Months

• Staff Onboard and New Hire Training - 15th Nov, 2008

• Center Went Live – Jan 1st, 2009

• AP Technical Support Center10 L1 Technical Support Analysts

For a flatter world

– 10 L1 Technical Support Analysts– 11 L2 TSAs– 1 Support Managers

• Expected to Grow to About 30 Staff by End of 2010

Achievement of Dalian TSCPrimary Customer Supported in: Asia PacificLanguage Supported: Japanese, Korean, English and MandarinOperating Hours: TSC is 5X12 operation and weekend supportsFunctional Teams: About 22 Engineers in Customer Care Rep (L1) Team Technical Support Analyst (L2) Team QA Team and

DalianTSC

Functional Teams: About 22 Engineers in Customer Care Rep (L1) Team, Technical Support Analyst (L2) Team, QA Team and Training TeamOthers: Dalian TSC is also supporting some cases passed from U.S and EMEA

U.S. EMEA

Asia Asia Pacific

For a flatter world

The Restructured Technical Support in Asia Pacific

Customers/Partners

Japan Korea Great China South Asia Australia & NZ

issue technical response issue technical responseissue technical

Web / Email / Phone

› 10% Cost saving in the first 12 months of operation (Considering a new call center

Dalian TSC

Japanese (CCRs)

Korean (CCRs)

issue

English (CCRs)

p issue pissue response

Backup CCR(Japanese +Korean)

Front Line Customer Support

operation (Considering a new call center hardware & software investment)

› Improve & Maintain Customer Satisfaction at 90%

› Reduce Management Overhead and l it

(CCRs) (CCRs) (CCRs) (Japanese +Korean)

Mandarin is common service language, all the above Agents d l ith i M d i Chi i d ith ll il bl t

Japanese (TSAs)

Korean (TSAs)

English (TSAs)

Backup TSA(Japanese +Korean)

Level-1&2 Technical Support

complexity› Flexibility in resource management

escalation escalation escalation

can deal with cases in Mandarin, Chinese is covered with all available agents

R&D

For a flatter world

R&D(Level 3)

Topics





4




For a flatter world


Lesson Learned Through The Projectg j

Identify your goal early and know what you wantIdentify your goal early and know what you wantTry to be involved as much as possible during the initial stage of the operationTreat the offshore team as an extension of your own teamBe prepare to be involved in recruitment and trainingCommunication and customer service skills can still be a challenge

fDrive the customer satisfaction and process improvementFacility and infrastructures are excellent and latest in DalianA reliable and flexible local partner can be a great helpA reliable and flexible local partner can be a great help

For a flatter world

Thank YouThank You

For a flatter world

john yang, yidatec - taking advantage of china's multilingual capability

Business