sudip banerjee, ceo, l&t infotech

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NASSCOM: India Leadership Forum 2009 Euro Vision: Is Fortress Europe opening up ? Sudip Banerjee

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NASSCOM: INDIA LEADERSHIP FORUM 2009 Re-shaping the Global Economy, Session 1B: Euro Vision: Is Fortress Europe opening up?

TRANSCRIPT

Page 1: Sudip Banerjee, CEO, L&T Infotech

NASSCOM: India Leadership Forum 2009

Euro Vision: Is Fortress Europe

opening up ?

Sudip Banerjee

Page 2: Sudip Banerjee, CEO, L&T Infotech

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Fortress Europe crumbling down !!!

Page 3: Sudip Banerjee, CEO, L&T Infotech

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Key Characteristics/Stereotypes

3

EU single market – but 27 different member states ! Language Barriers Cultural Barriers Lack of Outsourcing Maturity Local Presence and Infrastructure Pricing pressures and Currency fluctuations Skills shortages Protectionism – might increase Unique Business Practices across the countries; no standardization Labour laws fairly strict and rigid

Page 4: Sudip Banerjee, CEO, L&T Infotech

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Composition of Continental Europe Market

Continental Europe is not a homogeneous market ... but a mix of different

markets !

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Largely packaged product centric Local templates across countries. Several disparate tax rates and

currencies

Page 5: Sudip Banerjee, CEO, L&T Infotech

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Specific Requirements for doing business in Continental Europe

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Page 6: Sudip Banerjee, CEO, L&T Infotech

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Perception of Global vendorsStrong

Relationships

Cultural alignmentAs the vendors have local presence for years, they are more aligned with the specific cultural needs of clients

Offshore coordination

This is one area where clients perceive global vendors to be weak.

Cost competitiveness

Typically, the total price to clients for the same project has been seen to be 30% - 100% more for global vendors as compared to offshore providers

Language skills Clients are more comfortable with global vendors in specific cases where language skills play a major part

Transparency and access

Global vendors are perceived to be opaque about their costs and delivery, offering very little direct access to offshore resources

Str

on

g

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Weak

Clients have strong relationships with these vendors, as they have been working together for years and thus better understand customers

Page 7: Sudip Banerjee, CEO, L&T Infotech

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Perception of Indian vendorsS

tron

gW

eak

Onsite/offshore co-ordination

Cost transparencyIndian vendors are perceived to be more open about their pricing structure, and they generally price lower for the total offering vis-à-vis global peers

Language/Cultural alignment

For services involving a high degree of language and cultural sensitivity, Indian vendors score lower in terms of client perception

Management attention

Top management at Indian vendors is perceived to be very approachable, which gives clients a sense of satisfaction in terms of service assurance

Operating modelsCustomers believe that the operating, delivery and engagement model of Indian vendors is more efficient for global sourcing

Pressure on availability of senior talent

At times, clients have perceived a lack of availability of senior talent on projects which may be due to wage inflation, and resource crunch in India

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Generally their experiences have been positive. Initially they believed the marketing hype, then some disillusionment, but they found the alternatives not up to the mark either. For large engagements mantra for success has been – ‘local engagement managers supported by offshore teams’.

Clients have experienced strong offshore/onsite coordination from Indian vendors – something missing to varying degrees at global vendors

Page 8: Sudip Banerjee, CEO, L&T Infotech

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Management Attention

Strong top management focus and presence right from the start of deal pursuit is becoming an unwritten expectation

Transparency

A key issue clients have faced with global players is that of transparency, in terms of actual cost and resources being allocated to them

They therefore expect a high level of resource and cost transparency, and a billable ‘front office’ or heavy overhead simply does not meet their expectations

Flexibility

As typical Development and ERP implementation project workloads vary over time, clients expect their selected providers to be flexible in terms of resource allocation, to a maximum extent possible

A Core-Flex model of resourcing is becoming a clear expectation

Access to resources

Customers today want direct access to offshore resources, and the associated data/details on their qualifications, experience, resource usage etc.

Some customers have put strict filters in place to ensure that only employees with a certain minimum level of experience work on their account

Expectation from Indian vendors

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Risk Mitigation Models

Different models for risk mitigation like ‘No cure, no play’

Page 9: Sudip Banerjee, CEO, L&T Infotech

99

Previous Perception The demand for resources can

be met within Europe; global sourcing didn’t exist.

Offshoring is a passing phase and the advantages are not sustainable.

Multiple languages within Europe, pose a challenge.

The unique business and cultural nuances of Europe act as deterrent to offshoring.

A lot of attempts at sourcing through countries in the Baltic region (Latvia, Lithuania, Estonia) has not really succeeded. Higher attrition and lack of availability of high end skills.

Emerging Outlook There is resource crunch in

Europe and can be met through Global Sourcing.

Global Sourcing is an emerging trend and will further expand, enhancing near shore capabilities.

Number of people being trained with Language skills.

Success stories at a variety of organizations within Europe, which depict cultural fit.

Embracing India at sourcing because of availability of talent and quality skills.

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However, change in overall perception is allowing Indian vendors to enter and explore opportunities in Continental Europe !

Change in overall perception